Last week the Environmental Protection Agency released a study that concluded that hydraulic fracturing, so-called “fracking” of oil and natural gas wells, does not contaminate drinking water, except in extremely unusual cases involving improper drilling techniques. The study should reduce the concerns of some of the technique’s vocal critics whose fears have led to restrictions on its use.
The EPA study reviewed the results from thousands of wells and found few faults with the drilling technique. When problems occurred, they stemmed from improperly sealed wells, which can affect any oil or gas well and not just those that utilize hydraulic fracturing.
More evidence about the costs and benefits of fracking appears in the forthcoming summer issue of Regulation. The Barnett shale area splits the Dallas–Forth Worth area in half; all of the wells are in the western part of the metro area. Because many other factors are constant within the metro area, this geological accident allows researchers to determine whether shale development produces net benefits and thus increases housing values. Read the full study here.
In Texas the value of oil and gas rights is part of the local property tax base. Thus localities receive tax revenues from oil and gas development and can finance local public amenities without increasing property taxes. Over the entire 1997–2013 period, houses in the shale ZIP codes in the Dallas–Fort Worth area appreciated 5 to 6 percentage points more than houses in non-shale ZIP codes. These results suggest that improved local finances have more than offset whatever disamenities result from shale development for the typical homeowner. “Fracking” is just another drilling technique, and needs to not be regulated in any special way beyond that of normal oil and gas drilling.