By Jerrold Parker
New research shows that hydraulic fracturing (fracking) activity has a negative effect on property values, especially of land and homes closest to active wells and those not connected to a public water supply.
There have been numerous adverse impacts to fracking drilling published in recent years, especially as fracking activity increases and more people are affected by it. According to a report from the Natural Resources Defense Council on a study from the National Bureau of Economic Research, properties closest to a fracking well or those depending upon groundwater for its water source are likely to see a drop in value over time, a direct result of that fracking activity.
To gather evidence for this report, study teams from the Resources for the Future and Duke University assessed the sale of about 19,000 properties in Washington County, Pa., in a five-year period. They found that property values dropped so much as a result of the fracking activity on or near the plot of land for sale that any gains from the lease of that land to fracking drillers or the alleged gains to local economic development were a wash.
Property owners and a skeptical public are led to believe that fracking activity is a boon to a struggling local economy. Nowhere is that more true than in Washington County, Pa., where the scars of a dying bituminous coal industry still has a mark on the region. For decades there, the economy has been in freefall and the public was desperate for a way out of that doldrum.
An unsure public was sold on the idea that fracking drilling will boost domestic energy production and that activity at well sites would lead to new, well-paying jobs that could be a future for many in the area. This pitch was made across Pennsylvania and several other states where thousands of fracking wells have been opened in recent years.
The public was not told about the negative impacts of fracking drilling and have been forced to learn of them as more wells open. There has already been ample evidence to show that fracking drilling has a negative effect on the environment and public health. Although state and federal regulators have been slow to react to this evidence, the impact at the ground level has been undeniable. Now comes evidence of another negative impact.
The study on property values found that fracking wells on or near a lot for sale “lead to a large and significant reduction in property values.” Further, “these reductions offset any gains to owners of groundwater-dependent properties from lease payments or improved local economic conditions and may even lead to a net drop in prices,” according to the report citing the study.
The effect of one fracking well could extend as much as 2,000 meters from it, affecting all property values in that radius.
The impact is not seen with properties connected to a public water supply, however. The study found that the economic gains locally were seen in a housing market boost in Washington County, Pa., specifically among homes that were connected to municipal water, not a groundwater well. The property values for those homes were mostly affected by the perceived risk of groundwater contamination, showing that as much as the public wants to believe fracking is a boon to the economy, they’re not willing to risk a bet on its effect on the local environment.