The Economics of Shale Gas Development

Charles Mason, Lucija A. Muehlenbachs and Sheila M. Olmstead

No 198980, Energy: Resources and Markets from Fondazione Eni Enrico Mattei (FEEM)

Abstract: In the past decade, innovations in hydraulic fracturing and horizontal drilling have fueled a boom in the production of natural gas (as well as oil) from geological formations – primarily deep shales – in which hydrocarbon production was previously unprofitable. Impacts on U.S. fossil fuel production and the U.S. economy more broadly have been transformative, even in the first decade. The boom has been accompanied by concerns about negative externalities, including impacts to air, water, and quality of life in producing regions. We describe the economic benefits of the shale gas boom, including direct market impacts and positive externalities, providing back-of-the-envelope estimates of their magnitude. The paper also summarizes the current science and economics literatures on negative externalities. We conclude that the likely scope of economic benefits is extraordinarily large, and that continued research on the magnitude of negative externalities is necessary to inform risk-mitigating policies.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 41
Date: 2015-03-02
References: Add references at CitEc
Citations: View citations in EconPapers (51)

Downloads: (external link)
https://ageconsearch.umn.edu/record/198980/files/NDL2015-017.pdf (application/pdf)

Related works:
Journal Article: The Economics of Shale Gas Development (2015)
Working Paper: The Economics of Shale Gas Development (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:feemer:198980

DOI: 10.22004/ag.econ.198980

Access Statistics for this paper

More papers in Energy: Resources and Markets from Fondazione Eni Enrico Mattei (FEEM) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().