Social costs from proximity to hydraulic fracturing in New York State

Abstract

The study reports data from an economic choice experiment to determine the likely welfare impacts of hydraulic fracturing, in this case using natural gas extracted by hydraulic fracturing for household electricity. Data were collected from an Internet survey of 515 residents of New York State. The welfare analysis indicated that on average households incur a welfare loss from in-state hydraulic fracturing as the source of their electricity. The evidence suggests that households in shale counties bear more costs from HF electricity than households out of shale counties. The average welfare loss is substantive, estimated at 40–46% of average household electric bills in shale counties and 16–20% of bills in counties without shale. The evidence also suggests that relative proximity to HF well sites also increases cost borne by households.