H. Allen Klaiber

Unconventional shale gas activity has presented both challenges and opportunities for conservation. The unique nature of horizontal drilling used in shale exploration allows for a reduction in the footprint of shale-related activity in the landscape. However, existing policies regulating shale activity across the Northeast, particularly in Pennsylvania, largely miss an opportunity to encourage such consolidation, which would result in substantial ecosystem conservation. Using satellite land cover data for the years 2006 and 2011 combined with data on shale drilling activity in Pennsylvania, we show that a consolidation of wells to underutilized well pads would have resulted in a forest conservation gain of over 112,838 acres between 2006 and 2015. While likely an overestimate, this suggests that small changes in policy such as moving toward a quantity-based market mechanism to regulate the number of well pads would result in substantial conservation gains.

Klaiber, H.A.,  Gopalakrishnan, S., and Hasan, Syed, ‘Missing the forest for the trees: balancing shale exploration and conservation goals through policy’, 2016, forthcoming, CONSERVATION LETTERS, DOI: 10.1111/conl.12238. http://onlinelibrary.wiley.com/doi/10.1111/conl.12238/full

Presentation at IAMO 2014 Symposium, "The rise of the 'emerging economies': Towards functioning agricultural markets and trade relations", Halle, Germany, June 25-27, 2014

Profitable extraction of previously inaccessible shale gas reserves has led to rapid expansion of shale exploration across the United States. While there is much enthusiasm surrounding the benefits from this source of energy as a potential path to energy independence, very little is known about the environmental risks associated with this exploration activity. In this paper, we present one of the first empirical studies to measure the impact of early shale exploration as capitalized into surrounding property values. Our dataset combines real estate data, shale well data and land use data in Washington County, Pennsylvania from 2008 to mid-2010 to estimate the impact of shale activity on nearby housing values using a Box-Cox hedonic specification. We find that households are adversely impacted by shale gas exploration activity, but this impact depends on the proximity and intensity of shale activity and is largely transitory in duration. While the magnitude of the overall effect of an additional shale well within one mile from the property is modest (-0.8%) this impact is heterogeneous. The effect is larger for households located close to major highways and sourced with private well water. The impacts are larger and more persistent for properties surrounded by agricultural lands.

Gopalakrishnan, S., & Klaiber, H. A. (2014). Is the shale energy boom a bust for nearby residents? Evidence from housing values in Pennsylvania. American Journal of Agricultural Economics, 96(1), 43-66. http://ajae.oxfordjournals.org/content/96/1/43.short