The Economic Value of Shale Natural Gas in Ohio (original) (raw)
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Agricultural and Resource Economics Review , 2015
We investigate local economic impacts of shale gas development using the natural experiment of the discontinuity in regulation caused by New York's 2008 moratorium on fracking. Using county-and zip-code-level data for 2001–2013 to examine differences in New York and Pennsylvania counties before and after the moratorium, we ind that shale gas development has a positive local impact on employment and wages in the natural resource, mining, and construction sectors and an offsetting reduction in employment in the manufacturing sector. Overall, we ind no statistically signiiicant local effects on total employment or on wages. Over the past decade, the technological advancements of hydraulic fracturing and horizontal drilling have led to the economic feasibility and rapid growth of natural gas production using shale and other unconventional sources. Hydraulic fracturing (" fracking ") is the process of injecting pressurized luids into shale gas deposits to create a network of cracks in the formations at 5,000 to 10,000 feet below the earth's surface. These cracks release natural gas trapped in the underground shale formations, allowing it to low into wells at the surface. More than 99 percent of the fracking luid is water; the remainder is a combination of sand and chemicals (Higginbotham et al. 2010).
2014
Overall we found a community unprepared for the sudden overwhelming presence of the industry, with few tools to manage, let alone plan for, growth and change. One official argued that the industry "parachuted in and we chased them around. " That sentiment was repeated by many of the officials we interviewed. The benefits came with costs and impacts, with demonstrable changes in a number of areas: Employment grew in drilling-related sectors. Employment in natural resources and mining, although a small share of the overall economy, grew by 376% between 2005 and 2012. Overall employment grew by 4.7% during this period, while employment statewide increased by only 0.5%. Unemployment fell, for a time. Tioga County unemployment dipped below the state average between 2010 and 2012, the height of the boom, and industry employment helped cushion county residents from the worst effects of the Great Recession. The industry moved on, and unemployment grew, once again rising above the state as a whole. Residents benefited economically. Income earned by Tioga County residents from higher rents, signing bonuses, and royalties grew between 2005
The Economics of Shale Gas Development
In the past decade, innovations in hydraulic fracturing and horizontal drilling have fueled a boom in the production of natural gas (as well as oil) from geological formations—primarily deep shales—in which hydrocarbon production was previously unprofitable. Impacts on US fossil fuel production and the US economy more broadly have been transformative, even in the first decade. The boom has been accompanied by concerns about negative externalities, including impacts to air, water, and quality of life in producing regions. We describe the economic benefits of the shale gas boom, including direct market impacts and positive externalities, providing back-of-the-envelope estimates of their magnitude. This article also summarizes the current science and economics literatures on negative externalities. We conclude that the likely scope of economic benefits is extraordinarily large and that continued research on the magnitude of negative externalities is necessary to inform risk-mitigating policies.
Abundant Shale Gas Resources: Some Implications for Energy Policy
2010
According to recent assessments, the United States has considerably more recoverable natural gas in shale formations than was previously thought. Such a development raises the possibility of a shift in U.S. energy consumption toward natural gas. To examine how the apparent abundance of natural gas might affect U.S. energy markets and the role of natural gas in climate policy, we model five scenariosreflecting different perspectives on natural gas availability, the availability of competing resources, and climate policy-through 2030. We find that more abundant natural gas supplies result in greater natural gas use in most sectors of the economy. We further find that natural gas could serve as a bridge fuel to a low-carbon future, but only if appropriate low-carbon policies are in place.
the Costs and Benefits of Natural Gas Development in Greene County, Pennsylvania: A Case Study
2014
Located in the southwestern corner of Pennsylvania, Greene County is no stranger to extractive industries, with a long history of coal mining, conventional gas drilling, and, most recently, unconventional gas drilling. Greene County had more than 500 unconventional gas wells drilled between 2006 and 2012 (nearly one gas well per square mile), 8% of the state total. This "modern gold rush" has brought with it both benefits and costs. This report documents the impacts that gas drilling has had on the county economy, roads, housing, social services, schools, and hospitals. The report is part of a larger Multi-State Shale Research Collaborative examination of the social costs of gas drilling in rural communities (other case studies focus on Tioga County, Pennsylvania, Carroll County, Ohio, and Wetzel County, West Virginia). Interviews were conducted with local officials and experts to understand how gas drilling has impacted Greene County communities, services, and local government. We supplemented qualitative interviews with data collection and analysis where possible. What did our research reveal? Greene County enjoyed some of the promised benefits of gas development, but those benefits came with costs to individuals and the community. The county experienced a significant increase in jobs, new income for residents, and increased sales activity for local businesses. At the same time, industry growth increased heavy truck traffic, safety concerns, and road damage; made housing hard to find and increased rents; and stressed social services, police, and local officials, all of which played catch up after the sudden spike in activity. Our findings: • An influx of out-of-state oil and gas workers drove up rents and further exacerbated an already existing housing shortage in the county. Rents, stagnant in the rest of Pennsylvania during and after the recession, increased by 7% to 12% (at the 20th, 50th, and 80th percentile of the rental cost distribution), with the biggest hike at the higher end of the market. Anecdotal reports claimed much higher increases-a doubling or tripling of rents-in specific cases. Higher rents benefited landlords but put a financial strain on renters, including low-income seniors on fixed incomes. For some county residents, higher rents were cushioned by higher incomes; indicative of this, the share of county residents paying more than 30% of their income in rent rose by less in Greene County (14%) during the drilling boom, a period of recession and slow recovery nationally, than over the same period in the rest of Pennsylvania (30%). • The shortage of affordable housing exacerbated by the oil and gas boom led to more children being split from parents and higher demand for foster care services. Some low-income families unable to secure adequate housing were separated, and children were put into the foster care system. Since 2009-10, the number of children in foster care due to "inadequate housing" has been between 30% and 40%, compared to 15% right before the boom began (in 2008-09). The increased cost of foster care has put a financial strain on Greene County Human Services. I. Executive Summary 2 MEASURING THE COSTS AND BENEFITS OF NATURAL GAS DEVELOPMENT IN GREENE COUNTY, PENNSYLVANIA: A CASE STUDY • Crime increased in conjunction with drilling, according to interviews, and data for Cumberland Township, the municipality with the largest number of drilling permits from 2006-12, and data over a longer period for Greene County. The township received nearly double the number of calls in 2011 (3,086) compared to 2008 (1,549), with a small drop off in 2012. Pennsylvania State Police data show a 31% increase in "serious crimes" in Greene County from 1999-2001 to 2010-12, compared to a 6% decline statewide. • Greene County's high school drop-out rate rose above the statewide average during the height of the gas boom (2009-2012). Anecdotal evidence suggests that some high school students dropped out of school to take advantage of new, higher-paying industry jobs in the county. Social service staff reported seeing more young men without high school diplomas seeking services because they have been recently laid off by companies moving elsewhere. • Emergency room visits to Greene's one hospital increased by more than 50% from the first part of the 2000s to 2010-12. A hospital official said this resulted not from drilling but from a 2005 hospital takeover by a for-profit corporation that improved services and the hospital's reputation. Another local health expert said that anywhere from one-third to two-thirds of the increase could be the result of the health and safety impacts of drilling. Across the board, it is clear that the county was unprepared for the impacts of drilling and had few tools available to manage the boom. Almost all local sources perceived drilling to have come out of nowhere with only a short lag time from the arrival of the land men to intense extraction activity. The activity, and the impacts, were on multiple fronts, affecting different county agencies and various municipalities simultaneously. The cumulative impact was, at times, overwhelming to the local officials and human service professionals on the front lines. For areas yet to experience a shale extraction boom, a clear lesson from Greene County is that more must be done by states and localities to prepare and respond better-to anticipate impacts, to have tools in place to avoid or mitigate impacts, to receive advanced and regular information from drillers on their plans, and to access resources to address infrastructure and human service needs in a predictable and timely way. An untold part of the Greene County story concerns the future. The county's history of extraction has left behind a legacy of environmental damage and poverty. Acknowledging its promising economic beginning, the growth in shale gas development makes the county more dependent on resource extraction, and vulnerable to a decline as swift as its rise. "Every program I have is impacted by housing-foster, drug and alcohol, disability, mental health."
The Extractive Industries and Society
It's been just over a decade since Unconventional Oil and Gas development began in earnest in the Marcellus Shale, a dense shale formation that, along with the deeper and larger Utica Shale, covers much of the mid-Atlantic United States. Since January 2008, approximately 15,939 wells have been drilled and fracked at 5674 sites across these shales. This decennial documents the pace, scale, and stages of actual development and takes stock of the social science on impacts to communities, people, policies, and culture. We have divided this article into the following sections that are categorized both geographically and thematically: Pennsylvania: Heart of the Marcellus Shale Play, focuses on the plethora of social science research that has occurred on impacts to Pennsylvania communities, health, economics, and agricultural production; West Virginia and Ohio: Legacies of Extraction discusses research on the overlapping historical legacies of extractive industries in the region and details results of original research examining perceived impacts to residents amid complex historical natural resource lineages; and New York: Fracking, Culture and Politics examines how the regulatory process to develop the Marcellus Shale affected both the state and nation's culture, politics, and policy as one of the most densely populated regions of the US came to grips with hosting the modern-day Oil and Gas Industry. We conclude with a discussion of emerging research opportunities and directions as a new generation of social scientists document future development in the Marcellus and Utica Shales. This decennial documents the pace, scale, and stages of actual development and takes stock of the social science on impacts to communities, people, policies, and culture. We have divided this article into the following sections that are categorized both geographically and thematically: Pennsylvania: Heart of the Marcellus Shale Play, focuses on the plethora of social science research that has occurred on impacts to Pennsylvania communities, health, economics, and agricultural production; West Virginia and Ohio: Legacies of Extraction discusses research on the overlapping historical legacies of extractive industries in the region and details results of original research examining perceived impacts to residents amid complex historical natural resource lineages; and New York: Fracking, Culture and Politics examines how the regulatory process to develop the Marcellus Shale affected both the
Cumulative environmental and employment impacts of the shale gas boom
Nature Sustainability, 2019
Natural gas has become the largest fuel source for electricity generation in the United States and accounts for a third of energy production and consumption. However, the environmental and socioeconomic impacts across the supply chain and over the boom-and-bust cycle have not been comprehensively characterized. To provide insight for long-term decision making for energy transitions, we estimate the cumulative impacts of the shale gas boom in the Appalachian basin from 2004 to 2016 on air quality, climate change, and employment. We find that air quality
In communities experiencing shale gas development, the local media are an important information source on potential impacts of development; their coverage generates and spreads social representations of this issue. We examine representations of natural gas development through a content analysis of six regional newspapers in the northern United States (n = 1,958 articles) – two each in Ohio, New York, and Pennsylvania. Previous research showed similarities between the New York and Pennsylvania newspapers; differences emerged in nearby Ohio’s coverage. In Ohio, similar percentages of articles mentioned economic impacts as in Pennsylvania and New York, but significantly fewer articles mentioned environmental or social impacts. Furthermore, valence of economic and social impacts was notably more positive in Ohio. This analysis highlights nuances inherent in regional discourse about shale gas development. In turn, these differences have implications for: (1) how politicians, journalists, activists, and researchers can better communicate about shale gas development, (2) policy/regulation of development, and (3) future research on social representations of emergent forms of energy extraction. We suggest the need, in social science research on energy development, to examine societal-level (not merely individual) influences on perceptions and to account for nuances inherent in regional variation – infrequently manifest in national sample studies.