Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis (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).
How Shale Gas Extraction Affects Drilling Localities: Lessons for regional and city policy makers
In countries around the world, the public debate over the prospect of high volume hydraulic fracturing for shale gas has revolved around its environmental impacts, while taking as a given that exploitation of this newly available natural gas asset will produce significant economic benefits for local and regional economies. In this paper the authors use multiple methods, including a case study of the Marcellus Shale gas ‘play’ in the USA, to examine how the economic costs and benefits of high volume hydraulic fracturing have been assessed. They argue that the economic impact models, which have been used to project potential benefits and job creation, provide only a fraction of the information needed to understand the consequences of drilling for the regions in which it occurs. The paper also examines some of the challenges local communities face in responding to the costs posed by shale gas extraction. The authors’ analysis indicates that, while shale gas development may increase jobs and tax revenues in the predominantly rural regions where drilling occurs, it can also impose significant short- and long-term costs. To fully assess the economic effects of hydraulic fracturing, local and regional policy makers need to understand the boom-bust cycle that characterises natural gas development. This cycle has implications for local costs and benefits short term, and for the longer-term economic development prospects of localities in drilling regions.
2015
Unconventional oil and gas extraction efforts have raised the specter of the resource curse in affected communities, as has been demonstrated in other industries or geographies. Yet because these developments in unconventional extraction industries are so new, data for analysis is limited. This study examines recent activity in the Eagle Ford Shale area of South Texas with a time-series cross-sectional (TSCS) approach using data collected from 14 actively producing counties over a four year period from 2008-2011. Results indicate that the number of completed oil and gas wells has had a positive impact on per-capita income to-date. Previ-ous research suggests that communities in South Texas have the opportunity to overcome the resource curse, but that it will require good local governance and thoughtful long-term plan-ning.
Local Employment Impact from Competing Energy Sources: Shale Gas versus Wind Generation in Texas
Energy Economics, 2015
The rapid development of both wind power and of shale gas has been receiving significant attention both in the media and among policy makers. Since these are competing sources of electricity generation, it is informative to investigate their relative merits regarding local job creation. We use a panel econometric model to estimate the historical job-creating performance of wind versus that of shale oil and gas. The model is estimated using monthly county level data from Texas from 2001 to 2011. Both first-difference and GMM methods show that shale-related activity has brought strong employment to Texas. For example, based on the 5482 new directional/fractured wells drilled in Texas in 2011, the estimates imply that between 25,000 and 125,000 net jobs were created in that year alone. We did not, however, find a corresponding impact on wages. Our estimations did not identify a non-negligible impact from the wind industry on either local employment or wages.
Economic Impact of the Eagle Ford Shale Business Opportunities and the New Normal
In contrast to earlier reports, this latest study covers three years of activities, from 2014 to 2016, and includes an assessment on business opportunities in the Eagle Ford Shale during the “boom” period, from 2009 to 2014. Since 2010, the region has experienced not only important positive growth but also the effects of declining oil prices since late 2014. Most recently, it is experiencing a renewed activity due to the increase in prices since early 2016. The number of rigs in the area grew from a low of 36 by June 2016 to 80 by March 2017, more than double in less than a year. With prices around $50 per barrel, it is expected that the Eagle Ford Shale (EFS) will continue its growth in the near future. The study assesses the economic impacts of the shale including direct, indirect, and induced impacts in the 21 counties directly and indirectly involved in production. The study also looked for businesses opportunities in the area during the period 2009-2014 and highlights important growth in non-oil industries such as poultry and egg production, seasoning and dressing manufacturing, breweries, and grain farming, among others.
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
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.
Quantitative Effects of the Shale Oil Revolution
Social Science Research Network, 2015
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