ON FRACTURED GROUNDS: THE ECONOMIC VIABILITY OF PLANNING AS A LOCAL REGULATORY TOOL FOR HYDRAULIC FRACTURING

Last year, I studied and wrote a Masters thesis on the impacts of stricter local regulation of the oil and gas industry through the use of zoning setbacks. In 2015, and again in 2019, the US Chamber of Commerce asked and answered the question: what happens if there was a nation wide ban on fracking?

Their answer was apocalyptic. Industries would fall. Entire state economies would collapse. The energy markets as we know them would cease to exist. Daily household electricity bills would skyrocket. America’s economic leverage on the global stage would crumble. Unemployment on unprecedented levels. No fracking ban should ever be considered.

It became a timely topic towards the end, as our classrooms shuttered and students rushed back to their homes as the Covid-19 pandemic reached a crescendo. Oil prices tumbled and fracking screeched to a halt across the country. As the economy faltered precipitously towards recession levels, counties that relied on resource extraction gasped for air.

As I look back on my research, I would like to revise my conclusions and recommendations from mild encouragement for states to diversify their economies to strongly urge a sure transition away from reliance on oil and fracking in order to create resilient workforces that will weather future disasters — disasters that will only become more frequent.

A timeline of major events in fracking, leading to our mass exodus from Columbia University.

Executive Summary

While no standard guideline exist as a recommended minimal setback distance for oil and gas drilling, previous studies have indicated that a setback of 600ft from residences is adequate for preserving air quality and public health, and some states, such as Colorado, have adopted setbacks of 350ft to 1000ft, depending on building type.

Source: Bizjournals,TimesCall, Environmental Health News, Denton Record Chronicle, The Hill,

The issue of how much setback distance is appropriate is hotly contested as more state legislatures consider adopting bills that expand setback distance; more recently, California has considered a 2,500ft setback on unconventional oil and gas wells from public facilities, dwellings, and schools. Colorado’s State Department of Public Health and Environment have reported that adverse effects from the chemicals used in drilling could cause health problems for people as far as 2000ft away. Furthermore, a separate study by the Environmental Health Project, a nonprofit in Southwest Pennsylvania, which found that 89% of a panel of environmental and public health experts agree that a minimum setback of 1 mile to 1.25 mile between unconventional wells and human activity is appropriate. In a review of existing local laws governing oil and gas fracking within the two states, we found that drilling in PA is governed by the state through a 300ft uniform setback from water sources, while Texas does not have standardized statewide setbacks, but has imposed a ban on fracking bans. Because what can be considered as an appropriate minimum setback distance can vary from state to state, this study examines various setbacks ranging from 100ft to 2miles.

The research conducted in this study centered on three main questions:

• Do regulations have an effect on the distribution of unconventional wells?
• Is the existing distribution of unconventional wells purely based on geological factors, or do socio-economic factors contribute to location and density of fracking?
• What are the economic consequences with respect to overall employment if stricter regulations were enforced?

I mapped the major Shale & Sedimentary basins in the US

Hypothetical buffers tested at 5 distances

Findings are as follows:

1. An examination of fracking across all states in America shows that fracking clusters in states with no state mandated minimum setbacks such as Texas; within unregulated states, wells are significantly clustered in counties without local laws on fracking.
2. In Texas, there is evidence to suggest that there is a statistically significant relationship between race, median income, and the proximity of oil wells to public drinking water. Regression results show that the distance between unconventional wells and drinking wells tend to be higher in communities with greater percentages of nonwhite. Higher well densities are also associated with higher median incomes.
3. While higher incomes correlate to better health outcomes in Texas, communities with more non-white race tend to suffer poorer than average health. Conversely, as the proximity of unconventional wells to public drinking wells increase, so do poor health outcomes.
4. Communities with less access to local sources of public drinking water tend to be located in drought prone areas of Texas, and have a high proportion of nonwhite population. These same counties also bear the burden of high fracking density, water usage for fracking, and poor health.
5. The presence or increase in fracking activities is minimally, if at all, associated with increase in employment outside of the NAICS sector, and represents less than 2% of the labor occupations for fours states examined (NY, TX, PA, IL). An increase in wells is not found to have a significant impact on employment. Employment and wages are more affected by the crude oil and gas market price volatility than by regulations.

A surprising finding was that the places that used the most water also coincided with areas of high drought in Texas

By creating buffers around public drinking wells and other groundwater wells, we were able to estimate the amount of fracked wells lost should larger setbacks for both states be enforced. Our findings are as follows:

• At 100ft, there is no change to the existing number of unconventional wells in Texas while Pennsylvania will lose 4 wells
• At ¼ mile setback, both Texas and Pennsylvania will see a 0.5% reduction in wells
• At ½ mile setback, Texas will see a 1.5% reduction in wells while Pennsylvania will see a 2.8% reduction
• At 1 mile setback, Texas will see a 4.7% reduction in wells while Pennsylvania will see a 10.6% reduction
• At 2 mile setback, Texas will see a 12.9% reduction in wells while Pennsylvania will see a 38.4% reduction

Effects of progressive buffers on fracking wells in PA

Effects of progressive buffers on fracking wells in TX

The results reflect both the differences in the existing placement of unconventional wells as well as the size difference between the two states. Proportionally speaking, the total land area of Pennsylvania is 17% that of Texas. From the results above, this study suggests that existing setbacks in both states can be extended to up to 1320ft (¼ mile) from groundwater wells or public drinking wells with only a marginal reduction in unconventional wells, and even a ½ mile setback would not significantly reduce existing wells. The degree of impact to unconventional well reduction will vary depending on the size of the state, whether or not oil and gas wells are closer to urban centers, and the frequency of groundwater sources per county. However, we can see for state legislatures contemplating stricter regulations for the oil and gas industry, that even a 2 mile setback would not constitute a “de facto ban” on fracking.

Further studies should also look into water usage patterns of regions that are drought prone but have high oil well densities, to see what systems are in place to offset the heavy usage of local water sources. Furthermore, a wider range of social costs should be examined with respect to the presence of fracking, such as infrastructure spending, air quality, child mortality rates, mental health outcomes, and noise levels.

Data aggregated from 2018 5-year ACS

While states stand to benefit from impact and severance tax windfalls from fracking in the short term, past analysis of shale boom-bust cycles and even recent current events in steep oil price drop offs have shown that relying on sources such as oil and gas are unreliable and unsustainable sources for continued long-term economic development of local communities. As such, stricter regulations for hydraulic fracturing is recommended to decrease local and state dependency on the industry, and to alleviate social costs, such as health outcomes, imposed on vulnerable communities.

List of Equations

These models use data for all counties in Texas, and only applies to Texas.

Equation 1

1.1 Wd=0+1log(N) + 2 log(D) + 3 log(I) +₄T

1.2 Wd=0+1log(N) + 2 log(D) + 3 log(I) +₄ log(T)

Wd = (Well density) Hydraulically fractured wells per acre per County

N = Percentage of Population that identifies as a race other than “White” per County

D = Population Density (people per acre)

I = Median Income per County

T = Percent of voters who voted for the Republican Candidate in 2016 Presidential Election per County

Equation 2

2.1 P=0+1N + 2 log(D) +3 I+₄T

2.2 P=0+1N + 2 log(D) +3 log(I)+₄T

2.3 P=0+1N + 2 log(D) +3 log(I)+₄ log(T)

P = Average distance of nearest public drinking well from fracked oil/gas well (feet)

N = Percentage of Population that identifies as a race other than “White” per County

D = Population Density (people per acre)

I = Median Income per County

T = Percent of voters who voted for the Republican Candidate in 2016 Presidential Election per County

Equation 3

3.1 log(H)=0+1Wd + 2 W + 3 P +₄ log(N) +₅ log(I) +₆log(C) +₇log(L)

3.2 log(H)=0+1W + 2 log(I) + 3 log(C) +₄ log(L)

3.3 log(H)=0+1log(I) + 2 log(C) + 3 log(L)

H = The percentage of adults that report poor or fair health per County

Wd = (Well density) Hydraulically fractured wells per acre per County

W = Total number of fracked wells per County

P = Average distance of nearest public drinking well from fracked oil/gas well (feet)

N = Percentage of Population that identifies as a race other than “White” per County

I = Median Income per County

C = Percentage of Children in Poverty per County

L = Number of households with severe housing problems per County

A shift share analysis was also conducted for both TX and PA as part of the larger study. Please contact me for more information on this study.