The benefits of hydraulic fracturing on a national scale are well-known: lower energy prices, greater energy security, and reduced greenhouse gas emissions. Yet there have been concerns that adverse health and social impacts outweigh these benefits for communities where drilling occurs.
Now, a new study out of the University of Chicago indicates that the average local benefits of fracking outweigh the costs.
The study examined local impacts in nine different shale regions across the United States. The costs of fracking were measured by various quality of life factors, such as truck traffic, criminal activity, noise and air pollution from drilling activities, and perceptions about negative health effects.
The study found these costs are outweighed by fracking’s benefits, which total $1,200 to $1,900 per year for the average household.
These benefits include a 6 percent increase in average income, driven by increases in wage and royalty payments, a 10 percent rise in employment, and a 6 percent surge in housing prices. On the cost side, fracking reduces a typical household’s quality of life by about $1,000 to $1,600 annually—discounting the increase in household income.
The study also observed that each region is affected differently, with some benefiting more than others. For example, the estimated effect on housing prices was greater in North Dakota’s Bakken shale and Pennsylvania’s Marcellus shale than in other regions. This heterogeneity reflects variation in how large fracking activity is relative to the local economy, as well as differences in local housing markets. Despite the heterogeneity, the overall data is clear: for local communities, the benefits of fracking outweigh its costs.