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Fracking and My Community’s Socioeconomic Stability: Will My Boomtown Go Bust?

with Susan Christopherson, Ph.D. Professor, Cornell University, Department of City and Regional Planning

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The U.S. conversation surrounding recent oil and gas development through hydraulic fracturing (“fracking”) and newer technologies like horizontal drilling frequently centers around risks to the environment—to water and air—and to public health. At the national level, these risks are juxtaposed against the promise of jobs and energy independence.

fracking-posterOne of a series of posts discussing critical questions highlighted in the Fracking Informational Toolkit, a resource for active citizens in communities facing decisions on fracking.

However, at the regional and local levels, a host of socioeconomic factors complicates a comparison of costs and benefits. A close look at these factors indicates that there isn’t a simple choice between the environmental costs and economic benefits. Some of these factors affect communities beyond those places where oil and gas extraction is happening. Communities where related industrial processes, like sand mining and wastewater treatment and disposal, are located also experience impacts, and these communities are sometimes hundreds of miles away from the drilling sites.

At UCS’s recent Branscomb Forum, Science, Democracy, and Community Decisions on Fracking, working group participants discussed these socioeconomic risks: How will shale energy development affect a community’s landscape and quality of life? How will the character of neighborhoods change? More generally, who will benefit and over what period of time? What will be the costs to a community’s social fabric as well as to its long term economic sustainability? Will those who bear the costs share in the benefits?

While the long-term answers to these questions remain uncertain, some things are known:

Boom-bust cycles

rhyolite

Rhyolite, Nevada, sprang up in 1906 as a bustling gold mining town. By 1907, however, a downturn in the economy caused the collapse of mining investments, and by 1911 all the mines had closed. By 1916, the last residents had left. Photo: Tahoenathan/Wikipedia

The history of natural resource extraction in the United States is filled with stories of boomtowns and ghost towns. Time and again, the attraction of wealth based on natural resource extraction has brought dramatic economic and population growth only to be followed by a sharp decline when the resources were depleted. Although experts have been studying these cycles for a long time, comparative data across communities in the current shale energy boom is limited. This makes planning for a post-fracking future difficult for both communities and policy makers.

The short-term economic benefits from hydraulic fracturing can be substantial. Industry workers receive good salaries in a sluggish economy. Local industries like retail, entertainment, and construction also enjoy modest job growth. In addition, area landowners who receive leasing royalties have extra money to spend. Some money from all these sources flows into the regional economy. In 2010, for example, while much of the country struggled with high unemployment after the widespread 2008 financial crisis, Williston, North Dakota, reported an unemployment rate of zero percent, a number unheard of elsewhere across the nation. The state of North Dakota overall has also benefitted from the hydraulic fracturing boom in the Western part of the state with a 3 percent unemployment rate and $1.6 billion budget surplus in 2012.

Even in the short term, however, states and communities must carefully consider whether costs outweigh benefits. While shale energy development brings in jobs and revenue, it also increases the cost of living, through rising housing, retail, and public services costs. Regional communities that do not have any drilling may also bear costs from air and noise pollution caused by truck traffic, without the ability to offset them through added revenue. Moreover, many of the highest-paying skilled jobs promised to communities in Ohio, Pennsylvania, and elsewhere are filled by itinerant out-of-state oil and gas professionals from Oklahoma and Texas—a sobering fact for local residents attracted by the oft-repeated promise of jobs. A University of Michigan report found that local residents got the lower paying jobs and these at already existing wells rather than new ones, where highly skilled out-of-state workers were employed.

Industrialization of the landscape

In addition to the industrialization that occurs at well sites, including noise and air pollution from operations that sometimes run 24/7, other industrial markers affect the character of communities and residents’ quality of life. The clearing of land, building of new roads, and “man camps” built to house temporary workers all affect communities. But of particular note is the heavy volume of truck traffic.

According to the Occupational Safety and Health Administration (OSHA), exposure to airborne silica presents a health hazard to workers during some hydraulic fracturing operations. In this image, courtesy of OSHA, silica dust rises from delivery trucks.

Trucks carrying equipment, water, sand, chemicals, pipes, wastewater, and other materials to and from drilling sites, as well as to disposal wells, add to congestion, the risk of traffic accidents, and road degradation. Depending on the depth of a well, up to 1,500 truckloads per well may be necessary to provide inputs and carry out waste. The costs to communities to maintain roads not built for industrial use may be substantial. Many of the trucks carry chemicals and other hazardous materials, creating additional risks associated with traffic accidents.

In Bradford County, Pennsylvania, for example, where by 2009 more than half the residents had leased their land to oil and gas companies, traffic fatalities increased 25 percent between 2008 and 2009. Truck traffic also contributes to noise pollution and air pollution. Overall, truck traffic associated with unconventional natural gas development was considered by residents of Bradford County as “the most constant source of aggravation, stress, and fear.”

Strains on public services

The rapid pace at which shale energy development brings new people into communities often outpaces local efforts to prepare an effective response. Such development leads to increased demand for housing, police, emergency services, building permit applications, and other social services.

Image courtesy State of Oklahoma.

For example, an increased need for emergency services arises from the population influx, traffic and drilling accidents, and in order to respond to environmental spills and other hazards. With an influx of population also comes an increase in crime, placing additional strain on the state and local police, hospitals, and other first responders. In addition to traffic accidents, police have to respond to bar fights, drunken driving, and drug abuse. Housing costs also rise, and the inability of supply to meet demand leads to new workers living in temporary “man camps.” Anecdotal reports have also suggested that women in these communities may face risks from violence, but more research is needed to better understand the existence, nature, and scope of these risks.

Communities may find that the need for administrative capacity, equipment, and outside expertise to cope with these issues exceeds their expectations and budgets.

Long-term outcomes

To better understand long term socioeconomic risks of shale energy development, experts need more comparative data across communities that go through the process of extraction and depletion. However, while longer term outcomes remain uncertain in their specifics, two broad elements are clear. First, some segments of the population will benefit more than others: Landowners leasing mineral rights and some businesses will benefit. Renters, landowners without mineral rights, and businesses in competing industries may lose. Second, when wells have been depleted, businesses and workers connected to the industry will leave, jobs and revenue will depart with them, and the local economy will shrink.

What policy makers and communities can do

In addition to helping experts better understand short-term and long-term risks, comparative data on socioeconomic risks can also help policy makers and citizens better quantify and assess the costs and benefits and make decisions about shale energy development  in their communities based on evidence rather than anecdotes, promises, or fears.

A starting point for gathering more information and building up the evidence necessary to make good decisions is the UCS toolkit Science, Democracy, and Fracking: A Guide for Community Residents and Policy Makers Facing Decisions over Hydraulic Fracturing. In it you will find concrete suggestions on what information you will need, what kinds of questions to ask, and what relationships to build.

Posted in: Fossil Fuels, Science and Democracy Tags: , , , , ,

About the author: Susan Christopherson is an economic geographer whose research and teaching focus on economic development, urban labor markets, and location patterns in service industries, particularly the media industries. Her research includes both international and U.S.-policy-oriented projects. Her international research includes studies in Canada, Mexico, China, Germany, and Jordan as well as multi-country studies. In the past three years she has completed studies on advanced manufacturing in New York’s Southern Tier, the photonics industry in Rochester, the role of universities and colleges in revitalizing the upstate New York economy, and production trends affecting media industries in New York City. She has written more than 50 articles and 25 policy reports on topics in economic geography and economic development. Her current projects include studies of phoenix industries in old industrial regions and a comprehensive economic impact analysis of natural gas drilling in the Marcellus Shale in New York and Pennsylvania. Christopherson received her Ph.D. from the University of California-Berkeley.

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  • Richard

    Points well made!

    The Nez Perce Indians in Idaho recently convinced a judge to issue an injunction against the transportation of heavy equipment bound for the tar sands oil field in Alberta across their reservation. Their argument: the trucks were causing undue damage to the roads and surrounding environment. As an independent nation under treaties signed with the US government the judge ruled that that Nez Perce have the right to protect their land in this way. At least until more thorough studies are completed.

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