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Frack Baby Frack
Shocker: Shale Supports American Families

Fracking isn’t just helping to boost the energy security of the United States—it’s also raising wages and home prices for people living in shale-rich parts of the country. As the FT reports, a new study is helping quantify just how helpful the shale boom has been to the communities most affected by drilling:

Increased oil and gas production in the US is on average worth a net $1,900 per year to households in the areas where activity is highest, according to the first research to break down the impact of the shale boom on individual areas. […]

The US economists have attempted to pin those down for the first time by comparing counties in shale regions with higher levels of oil and gas production, reflecting the more productive reserves in the rocks under their feet, with counties with lower production.

On average, counties with more production have household wages that are 8 per cent higher and house prices that are 6 per cent higher than in areas with less activity.

Here in the U.S., landowners are afforded mineral rights. That means that, unless these rights were severed and sold off prior to one’s purchase of a parcel of land, one owns everything buried underneath the ground, not just what’s on the surface. Many Americans might take that for granted, but it’s something of an outlier globally, and these mineral rights have helped overcome local Not-In-My-Back-Yard (NIMBY) opposition to the controversial drilling practice. They are, in other words, one of the key reasons why shale has been thus far a uniquely American success story.

But it’s not only the landowners living directly atop productive shale reserves that benefit financially from the interest of oil and gas companies. Entire communities are enjoying the ripple effects of the shale boom—households in North Dakota’s Bakken shale region are more than $9,000 better off per year as a result of fracking.

The shale revolution can bring with it plenty of disruption: noisy rigs, pipeline construction, and an influx of freight traffic by truck and train don’t exactly sound appealing. But money talks, and the parts of the country that have undergone this significant change in lifestyle during the decade that shale has taken off are also, on average, better off financially than those that aren’t.

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  • ——————————

    “Shocker”??

    For who?…those living under stones?….

    • Observe&Report

      I think they’re being sarcastic.

    • Disappeared4x

      TAI’s blogpost model demands an enticing title, within the relevant category, and a solid opening.
      This one seems to be the writer’s take-away from a news report.

      Could be sarcasm, as O&R noted.

      Could be writer’s reaction the FT connected dots previously noted by TAI.

      Maybe the writer is a recent college grad…still adjusting to life on the outside.

      • ——————————

        Yeah, methinks you and O&R are correct on the sarcasm angle.

        I know there is definitely no one here in Texas who is “shocked” about shale’s effects on the economy….

  • Joey Junger

    I don’t trust long-term predictive models (and even a lot of short-term ones are shaky), so does anyone with the background in this field honestly know or have any idea if Americans are going to be able to continue with their present consumption habits, using these alternatives to foreign oil imports to maintain their living standard? And if so, for how long? I’ve heard people say peak oil is a sham, but James Howard Kunstler strikes me as an even-keeled, intelligent guy, and one of the few people in the mainstream who is capable of even talking about reality (not just in terms of resource scarcity, but identity politics, race, Islam, etc.), which makes me think he might be right. This boom is great, but when does it go bust? And if it does, what comes next?

    • texasjimbo

      Whatever the actual facts are, what seems to be universal about predictions of resource depletion is that they underestimate the amount of that resource that will be available by several magnitude.

    • rpabate

      Before there was “peak oil” there was “peak coal”. Stanley William Jevons, who Joseph Schumpeter lauded for his brilliant conceptions and profound insights, warned the British in 1865 not to become too comfortable with their rising standard of living made possible by the Industrial Revolution because, with the future exhaustion of coal, their improving lifestyle would come crashing down.

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