Lucija Muehlenbachs

Shale gas development impacts on surface water quality in Pennsylvania

Concern has been raised in the scientific literature about the environmental implications of extracting natural gas from deep shale formations, and published studies suggest that shale gas development may affect local groundwater quality. The potential for surface water quality degradation has been discussed in prior work, although no empirical analysis of this issue has been published. The potential for large-scale surface water quality degradation has affected regulatory approaches to shale gas development in some US states, despite the dearth of evidence. This paper conducts a large-scale examination of the extent to which shale gas development activities affect surface water quality. Focusing on the Marcellus Shale in Pennsylvania, we estimate the effect of shale gas wells and the release of treated shale gas waste by permitted treatment facilities on observed downstream concentrations of chloride (Cl−) and total suspended solids (TSS), controlling for other factors. Results suggest that (i) the treatment of shale gas waste by treatment plants in a watershed raises downstream Cl− concentrations but not TSS concentrations, and (ii) the presence of shale gas wells in a watershed raises downstream TSS concentrations but not Cl− concentrations. These results can inform future voluntary measures taken by shale gas operators and policy approaches taken by regulators to protect surface water quality as the scale of this economically important activity increases.

Shale Gas Development and Property Values: Differences Across Drinking Water Sources

While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a triple-difference estimator and exploit the public water service area boundary in Washington County, Pennsylvania to identify the housing capitalization of groundwater risk, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.

Increased traffic accident rates associated with shale gas drilling in Pennsylvania.

OBJECTIVES We examined the association between shale gas drilling and motor vehicle accident rates in Pennsylvania. METHODS Using publicly available data on all reported vehicle crashes in Pennsylvania, we compared accident rates in counties with and without shale gas drilling, in periods with and without intermittent drilling (using data from 2005 to 2012). Counties with drilling were matched to non-drilling counties with similar population and traffic in the pre-drilling period. RESULTS Heavily drilled counties in the north experienced 15-23% higher vehicle crash rates in 2010-2012 and 61-65% higher heavy truck crash rates in 2011-2012 than control counties. We estimated 5-23% increases in crash rates when comparing months with drilling and months without, but did not find significant effects on fatalities and major injury crashes. Heavily drilled counties in the southwest showed 45-47% higher rates of fatal and major injury crashes in 2012 than control counties, but monthly comparisons of drilling activity showed no significant differences associated with drilling. CONCLUSIONS Vehicle accidents have measurably increased in conjunction with shale gas drilling.

Characterization and Analysis of Liquid Waste from Marcellus Shale Gas Development

Hydraulic fracturing of shale for gas production in Pennsylvania generates large quantities of wastewater, the composition of which has been inadequately characterized. We compiled a unique data set from state-required wastewater generator reports filed in 2009-2011. The resulting data set, comprising 160 samples of flowback, produced water, and drilling wastes, analyzed for 84 different chemicals, is the most comprehensive available to date for Marcellus Shale wastewater. We analyzed the data set using the Kaplan-Meier method to deal with the high prevalence of nondetects for some analytes, and compared wastewater characteristics with permitted effluent limits and ambient monitoring limits and capacity. Major-ion concentrations suggested that most wastewater samples originated from dilution of brines, although some of our samples were more concentrated than any Marcellus brines previously reported. One problematic aspect of this wastewater was the very high concentrations of soluble constituents such as chloride, which are poorly removed by wastewater treatment plants; the vast majority of samples exceeded relevant water quality thresholds, generally by 2-3 orders of magnitude. We also examine the capacity of regional regulatory monitoring to assess and control these risks.

A Dynamic Model of Cleanup: Estimating Sunk Costs in Oil and Gas Production

The environmental remediation required to permanently decommission most industrial projects is an expensive, irreversible investment. Real options literature shows that temporary closure has value under uncertainty. However, even if there is no intention to restart operations, there is an incentive to label a closure as “temporary” to avoid having to remediate ongoing or future environmental externalities. I estimate a dynamic discrete choice model of closure under price and quantity uncertainty to evaluate the likelihood of reactivation. The model reveals that the option to temporarily close is being widely used to avoid environmental remediation of oil and gas wells in Canada.

How Do Natural Gas Prices Affect Electricity Consumers and the Environment

Between 2008 and 2012, the delivered price of natural gas to the U.S. power sector fell 60 percent. This paper addresses, in theory and in practice, the effects of this negative price shock on electricity consumers and the environment. We demonstrate with a simple model that the larger the effects of gas prices on consumer welfare, the smaller the effects on pollution emissions and the smaller the increase in profits of existing natural gas–fired generators. Using detailed data on electricity prices, fuel consumption, and fuel prices from 2001 to 2012, we confirm this hypothesis. Regions that experience greater reductions in pollution emissions experience smaller reductions in electricity prices and consumer welfare.

Shale Gas Development and the Costs of Groundwater Contamination Risk

While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a difference-in-differences estimator with additional controls for house fixed effects and the boundary of the public water service area in Washington County, Pennsylvania to identify the capitalization of groundwater contamination risk in property values, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases property values. However, groundwater contamination concerns fully offset those gains by reducing property values up to 26 percent.

Strategic Release of News at the EPA

Using advances in text analysis, we examine the content and timing of 21,493 press releases issued by the U.S. Environmental Protection Agency (EPA) between 1994 and 2009. Press releases announcing enforcement actions or regulatory changes were issued more often on Fridays and before holidays, a time when news has the least impact on media coverage and financial markets. Changing the timing of press releases may increase deterrence through awareness of regulation and market reaction to environmental news. We find no evidence of regulatory capture. We compare text analysis techniques that allow data collection from sources previously too expensive to access.

Using Expert Judgment to Assess Adaptive Capacity to Climate Change: Evidence From a Conjoint Choice Survey

We use conjoint choice questions to ask public health and climate change experts, contacted at professional meetings in 2003 and 2004, which of two hypothetical countries, A or B, they deem to have the higher adaptive capacity to certain effects of climate change on human health. These hypothetical countries are described by a vector of seven attributes, including per capita income, inequality in the distribution of income, measures of the health status of the population, the health care system, and access to information. Probit models indicate that our respondents regard per capita income, inequality in the distribution of income, universal health care coverage, and high access to information as important determinants of adaptive capacity. A universal-coverage health care system and a high level of access to information are judged to be equivalent to

Price Regulation and Environmental Externalities: Evidence from Methane Leaks

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