By Ed Crooks

Increased oil and gas production in the US is on average worth a net $1,900 per year to households in the areas where activity is highest, according to the first research to break down the impact of the shale boom on individual areas.

The study by leading US economists helps support the case for countries and communities allowing shale oil and gas production.

However, the benefits are not universally distributed. Some areas have been made worse off by shale production, and within an area some lose while others gain.

While the gains in terms of higher wages, royalty payments and house prices appear to outweigh the costs including higher crime, disruption from industrial operations and possible water and air pollution, some people suffer more from the negative effects than they gain.

Michael Greenstone, director of the University of Chicago’s Energy Policy Institute and a co-author of the study, said the research “could be useful for deciding where and where not to exploit shale resources in the ground”.

The boom in US oil and gas production caused by advances in the techniques of hydraulic fracturing, or fracking, and horizontal drilling has created hundreds of billions of dollars in additional output and hundreds of thousands of jobs.

The advances have made it possible to extract resources from shale rocks that would not previously produce at commercially viable rates.

Continue reading at the Financial Times…

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