Researchers studied property values in 36 Pennsylvania counties and seven New York counties from 1994 to 2012, mapping "sales against the locations of shale-gas wells" and comparing "homes connected to public drinking-water systems to homes with private wells," McMahon writes. "Properties with private wells suffered a loss in value compared to properties connected to a municipal water system, they found, offsetting gains in value from mineral-rights royalties. The loss varied with distance from the nearest shale-gas well. At 1.5 kilometers, properties with private wells sold for about 10 percent less."
"Within 1 km of shale gas wells, properties with private drinking water wells dropped 22 percent in value. Properties connected to public water suffered no losses, but also showed no net gains," McMahon writes. Lucija Muehlenbachs, an assistant professor at the University of Calgary, told him, “If you get closer, if you look at the properties that are only 1 km from a shale-gas well, then for the ones that are on groundwater we see a 22 percent loss in property values, and for the ones that have access to pipe water, there’s zero gain, so essentially all of the positive benefits get wiped out by these negative externalities of having this well pad nearby.” Negative externalities include truck traffic, noise, light, and air pollution.
"At distances greater than 2 km from shale gas wells — what Muehlenbachs calls the vicinity level — the researchers found a net increase in property values that declines over time — evidence of a small boom-bust cycle at the vicinity level," McMahon writes. (Read more)