Fracking counties experience more prosperity and violent crime, study says

By Karen Kidd | Feb 15, 2017

MONTOURSVILLE – Pennsylvania counties experiencing a boom in fracking also see increases in employment, salaries and violent crime, a shale networking organization said in a recent newsletter.

"In the last decade, hydraulic fracturing, or fracking, has helped deliver lower energy prices, enhanced energy security, and lowered air pollution and greenhouse gas emissions," Shale Directories said in its January 27 newsletter. "But there have been concerns over negative health and social impacts outweighing the economic benefits for local communities where such drilling takes place."

A study published by the University of Chicago in December suggests there are economic benefits in Pennsylvania where fracking is common, the newsletter said.

"The benefits include a 6 percent increase in average income, driven by rises in wages and royalty payments, a 10 percent increase in employment, and a 6 percent increase in housing prices," the newsletter said. "On the costs side, fracking reduces the typical household’s quality of life by about $1,000 to $1,600 annually—excluding the increase in household income."

The Marcellus Shale has been underneath what is now Pennsylvania for eons, but the extraction of natural gas began only relatively recently.

Shale Directories, founded in 2009 and formerly known as "PAGasDirectory," hosts directories in Pennsylvania's Marcellus shale plays, as well as five other major shale plays in the U.S. - Utica, Permian Basin, Eagle Ford, Bakken and Niobrara. 

The study, "The Local Economic and Welfare Consequences of Hydraulic Fracturing," released by the University of Chicago in December, found that Pennsylvania counties with high fracking potential saw increases in income, employment and salaries as well as oil and natural gas production.

The study also found that local governments in high fracking counties saw revenue increases that were greater than expenditures. However, the study also found that quality of life decreased in those high fracking counties, where reported violent crime increased.

The study also concluded that the average local benefits of fracking outweighed the costs, though it left the final judgment open for further research and the environmental and health effects after years of fracking.

The study's authors were MIT doctoral student Alexander W. Bartik; Princeton University researcher Janet Currie; University of Chicago Milton Friedman economics professor Michael Greenstone; and MIT Sloan School of Management George P. Shultz professor of applied economics and Center for Energy and Environmental Policy research director Christopher R. Knittel.

Currie and Greenstone previously participated in a 2014 study that found fracking is bad for babies.

"Our estimates are based on the knowledge that communities currently have," Greenstone, who also is director of the Energy Policy Institute in Chicago, was quoted as saying in the newsletter. "So, for example, if new information emerges that indicates that there are larger negative local health effects than is currently believed, this would likely lead to declines in housing prices and overall welfare impacts. But based on what is currently known, the average community that has allowed fracking has enjoyed substantial net benefits."

The study found that effects vary by fracking region, with some areas experiences more benefits than other. An example cited in the newsletter was home prices in North Dakota's Bakken shale play, which reportedly increased in values higher than those reported in Pennsylvania’s Marcellus shale play.

"There appears to be a good deal of heterogeneity in the estimates across the nine shale regions in our sample," Bartik was quoted as saying in the newsletter. "These differences reflect both variations in how large fracking activity is relative to the local economy, as well as differences in local housing markets. In future research, we’re working on understanding this heterogeneity better."

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