No Fracking Way: An Empirical Look at Why New York Towns Banned Shale Development
- Author(s): Caroline Cecot
- Date Posted: 2017
- Law & Economics #: 17-41
- Availability: Full text (most recent) on SSRN
Across the United States, local governments and states have adopted measures to restrict shale development that uses high-volume hydraulic fracturing and horizontal drilling (collectively, fracking) within their borders, hindering a national energy policy that relies on continued access to natural gas trapped within shale formations. This Article empirically examines the determinants of these local anti-fracking measures by analyzing the behavior of New York towns from 2010 through the end of 2013.
Before New York’s highest court recognized a town’s authority to ban fracking and before the state officially banned fracking, more than a hundred shale-rich New York towns adopted bans or moratoria on fracking. The results show that towns most likely to adopt bans were those whose residents were most vulnerable to potential water contamination and those with little history of prior oil-and-gas development. Moratoria adoption, in contrast, was predicted largely by residents’ environmental and political preferences.
The results support state efforts to reduce local opposition by facilitating responsible shale development that incorporates feedback from local governments to develop a comprehensive system of risk-based regulations, liability standards, and insurance mandates. These regulations, standards, and mandates would interact to create incentives for optimal activity levels, acceptable risk-taking, and comprehensive environmental protection against all categories of harms to water from shale development.