This post is co-authored with Giovanna Michelon, Christian Leuz, and Pietro Bonetti
Fracking – hailed by some as the greatest recent advance in energy production, criticised by others for the threat it poses to local life – continues to divide opinion.
The term fracking refers to the high-pressure injection of water mixed with fluid chemical additives – including friction reducers, gels and acids – and “propping agents” such as sand to create fractures in deep rock formations such as shale, allowing oil or gas to flow out.
Tens of thousands of hydraulic fracturing wells have been drilled across the US, generating huge benefits for its energy industry and economy: yet the practice remains globally controversial. It is not permitted in numerous other countries, such as France, Germany, Ireland and, since 2019, the UK.
While some see fracking as the most important change in the energy sector since the introduction of nuclear energy more than 50 years ago, others raise health and environmental concerns: in particular, the threat fracking could pose to our water.
Starting in 2010, many US states began to regulate fracking, obliging operators to disclose the substances used in their fluid mix. As economists, we were curious to see whether mandatory disclosures of what’s in fracturing fluids made the practice cleaner, or reduced potential water contamination.
To do that, we needed to compare the environmental impact from fracking before and after the new disclosure rules. We assembled a database that put together existing measurements of surface water quality with the location of fracking wells, and analysed changes in surface water quality around new wells over an 11-year period.
We noticed some strong associations, but also discovered that these associations had not been previously documented. Deciding to study the link between new hydraulic fracturing wells and surface water quality, we were able to provide evidence for a relationship between the two.