By Isaac Orr
Anti-fracking activists erroneously claim hydraulic fracturing, also known as “fracking,” is the cause of a whole host of ills, from flaming faucets, as infamously shown in the movie Gasland, to contaminated water. One of the most common arguments against fracking is it lowers property values. In support of this claim, activists often cite a study published in American Economic Review that found fracking can increase or decrease property values, with some properties’ values decreasing as a result of perceived fracking-related threats to groundwater.
Despite the widespread use of this allegation, the Environmental Protection Agency concluded in its massive, multi-million-dollar study fracking-linked water contamination is rare relative to the number of wells drilled, Colorado regulators also concluded the infamous flaming faucet scene from Gasland is a complete fraud.
There is no hard data supporting the claim fracking presents a widespread danger to water supplies, which means if anyone is guilty of causing property values to fall because of perceived problems with well water, it’s the anti-frackers. The blood is clearly on their hands.
Real estate markets, like all markets, are heavily influenced by people’s willingness to pay a certain price for a good or service. In market economies, perceived value and actual value are tied very closely together, especially when it comes to land, which means there is no easy, one-size-fits-all formula for calculating the value of real estate without dealing with issues related to perceived value.
When a potential property buyer is influenced by anti-fracking fearmongering, even if it is scientifically baseless, they are less likely to want to buy property near fracking operations. This problem is compounded by a phenomenon called the “negativity bias,” which suggests people are more likely to be influenced by negative information than neutral or positive information. This explains a number of societal issues, including why campaign season becomes an insufferable marathon of negative advertising.
Anti-fracking activists understand and exploit negativity bias daily, and their ends-justify-the-means campaign to ban fracking has real-world collateral damage: falling property values.
These pseudoscientific accounts are amplified by the fact many people have little scientific training, which makes it possible for dihydrogen monoxide, also known as water, to sound incredibly scary. Dihydrogen monoxide is so scary-sounding, in fact, people jump at the opportunity to sign petitions to ban this life-sustaining substance.
Is it possible for fracking to negatively affect property values in specific circumstances? Absolutely. There are specific instances in which oil and natural gas development can have negative impacts on water quality, such as when leaky well casings allow methane to infiltrate drinking-water resources or spills of wastewater or chemicals at the surface contaminate water supplies. The question is not, however, whether it is possible for something to go wrong when fracking occurs; it is a question of how widespread and serious the impacts are and what measures can be taken to prevent or remediate damages.
Ultimately, this debate should boil down to scientific truth. How likely is it water supplies will be negatively impacted by fracking? What protections can be put in place to ensure potential property buyers that their health and safety will not be put at risk?
If environmental groups really wanted to protect people and the value of their property, they would be better off conducting testing to determine if water supplies have been compromised. They would also ensure these reports are widely available to the public so potential property buyers could rest easy. Instead, they spend their money scaring people, ultimately driving down property values in areas where fracking is present.