Environmental Hazards and Local Investment: A Half-Century of Evidence from Abandoned Oil and Gas Wells

Max Harleman, Jeremy Weber and Daniel Berkowitz

Journal of the Association of Environmental and Resource Economists, 2022, vol. 9, issue 4, 721 - 753

Abstract: The United States may have more than 1 million abandoned oil and gas wells that were never properly decommissioned (plugged) and that may be leaking harmful liquids and gases. Exploiting the quasi-random assignment of well plugging in a large county in Pennsylvania, we find that over half a century—and in some cases over a century—the two acres around unplugged wells had roughly half as much building as around plugged wells. Further analysis suggests less local investment rather than shifting within a locality. Forgone investment, in turn, depressed property values by 12%.

Date: 2022
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