Study Finds Costly Tradeoffs to Economic Benefits of Shale Boom
A new study by Carnegie Mellon University finds that in the Pennsylvania, Ohio, West Virginia region, the economic boost from shale gas drilling has been less than the cost of premature deaths caused by pollution from the industry.
The study, published last month in the journal Nature Sustainability, found that between 2004 and 2016 shale development created a regional economic boost of $21 billion dollars, compared with $23 billion in the costs related to the 1,200 to 4,600 premature deaths linked to air pollution from the industry.
Lead author Erin Mayfield, a postdoctoral fellow at Princeton University, who studied the shale gas boom while a doctoral student at Carnegie Mellon, wanted to build on the growing body of economic, environmental and health research to create a cost-benefit analysis of the gas industry over time.
"These are largely unexplored areas, and really unaccounted for in public and private decision making," Mayfield said. She wanted to look at cumulative impacts, both positive and negative, of the industry. "So, who are winners and who are losers?"
Rural vs. Urban
The answer was pretty clear, according to study co-author Nick Muller, associate professor of Economics, Engineering, and Public Policy at Carnegie Mellon. [Another co-author, Jared Cohon, is on the board of directors for The Heinz Endowments, which is a funder of The Allegheny Front.]
“We show that the biggest employment effects are in outlying rural areas. And not surprisingly, those communities have benefited in some ways from this,” Muller said. “The natural gas extraction activity, however, where we find the greatest concentration of premature mortality from the local air pollution is in both the Pittsburgh metropolitan area and also the bigger cities to the east where that air pollution eventually flows.”
The study found that 54% of shale related jobs were in rural areas (and an additional 31% in rural-urban mixed areas), while 76% of premature deaths associated with the gas industry occurred in urban areas.
A closer look at the study
The study looked at “job-years,” defined as a full- or part-time job over a single year, not a long term job or career, created by or related to the industry. The shale industry supported 469,000 job-years over the twelve year study period.
The peak year, 2014, meant 74,000 shale related jobs in the tri-state region, but also the highest estimated premature mortality.
“For every three industry jobs in a year, someone in our region had life cut short for a year,” said Matthew Mehalik, director of the Breathe Project in Pittsburgh.
Using data from the National Emissions Inventory (NEI), it also estimated premature deaths related to pollution associated with gas wells, compressor stations, and other infrastructure, including fine particulate matter (PM2.5), nitrogen oxides (NOx), and volatile organic compound (VOC) emissions.
In 2014, emissions from shale gas activity accounted for 10% of NOx emissions reported by all industries reporting to NEI in the tri-state region. Emissions of PM2.5 and VOC emissions were considered marginal, at less than 2%.
Using air modeling tools, the researchers tracked where the pollution would go geographically, and looked at the populations that would be impacted. "And then we use epidemiological studies to link the exposure level to adverse or increases in mortality," Muller said. "And then we monetize those with standard techniques that EPA uses that convert mortality risks to dollar damage."
Response from industry
In a statement, Marcellus Shale Coalition president David Spigelmyer said all energy sources create impacts and tradeoffs, and "natural gas is unquestionably enhancing our environment and air quality, boosting job creation and making America more secure."
He also pointed to the benefits to consumers from "the availability of low-cost, affordable and clean-burning American natural gas."
The study found that climate impacts from natural gas development in the region cost $34 billion during the study period, which is more than either the employment benefits or the air pollution impacts. Muller said the climate impacts are "a significant contributor to the overall social cost from gas extraction in the region."
The study found that natural gas related sources in Pennsylvania, Ohio and West Virginia accounted for 10% of all U.S. methane emissions, and 9% of the carbon dioxide emissions across the entire U.S. natural gas sector.
Natural gas is often touted as better for the climate than coal. Muller said this movement from coal to natural gas for power generation likely generates some benefits, but "there [are] still significant climate change damages associated with its use."
"This study highlights the need for more discussion about why we’re signing up to do more with this industry," said Mehalik, referring to the petrochemical plant being built by Shell in Beaver County, north of Pittsburgh. It will use the ethane in natural gas to make raw material for the plastics industry.
Carnegie Mellon’s Nick Muller hopes the study provides information policymakers need to evaluate the costs and benefits of the natural gas industry. "Our job in this paper was to present the tradeoff, not to conclude what to do about the tradeoff," he said.