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Fracking, Coal, and Air Quality

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  • Reid Johnsen
  • Jacob LaRiviere
  • Hendrik Wolff

Abstract

This paper estimates indirect benefits of improved air quality induced by hydraulic fracturing, or “fracking” in the continental United States. The recent increase in natural gas supply led to displacement of coal-fired electricity by cleaner natural gas-fired generation. Using detailed spatial panel data comprising the near universe of air quality monitors merged with US power plant locations, we find that coal generation decreased by 28% attributable to lower natural gas prices. Using an IV identification strategy to isolate fracking’s impact on natural gas prices, we identify a 4% decrease in average PM2.5 levels due to decreased coal generation. These benefits vary geographically; air pollution levels decreased most in parts of Alabama by 35%. Back of the envelope calculations imply accumulated health benefits of roughly $17 billion annually.

Suggested Citation

  • Reid Johnsen & Jacob LaRiviere & Hendrik Wolff, 2019. "Fracking, Coal, and Air Quality," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(5), pages 1001-1037.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/704888
    DOI: 10.1086/704888
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    Cited by:

    1. Adler, David B. & Jha, Akshaya & Severnini, Edson, 2020. "Considering the nuclear option: Hidden benefits and social costs of nuclear power in the U.S. since 1970," Resource and Energy Economics, Elsevier, vol. 59(C).
    2. Linn, Joshua & Holt, Christopher, 2023. "Targeted Regulation for Reducing High-Ozone Events," RFF Working Paper Series 23-02, Resources for the Future.
    3. Nathaly M Rivera & Cristobal Ruiz Tagle, Elisheba Spiller, 2021. "The Health Benefits of Solar Power Generation: Evidence from Chile," Working Papers, Department of Economics 2021_04, University of São Paulo (FEA-USP).
    4. Blundell, Wesley & Kokoza, Anatolii, 2022. "Natural gas flaring, respiratory health, and distributional effects," Journal of Public Economics, Elsevier, vol. 208(C).
    5. Brett Watson & Ian Lange & Joshua Linn, 2023. "Coal demand, market forces, and U.S. coal mine closures," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 35-57, January.
    6. Rivera, Nathaly M. & Loveridge, Scott, 2022. "Coal-to-gas fuel switching and its effects on housing prices," Energy Economics, Elsevier, vol. 106(C).
    7. Hayashida, Sherilyn & La Croix, Sumner & Coffman, Makena, 2021. "Understanding changes in electric vehicle policies in the U.S. states, 2010–2018," Transport Policy, Elsevier, vol. 103(C), pages 211-223.
    8. Mueller, Rose M., 2022. "Surface coal mining and public health disparities: Evidence from Appalachia," Resources Policy, Elsevier, vol. 76(C).
    9. Yan, Jingchi, 2021. "The impact of climate policy on fossil fuel consumption: Evidence from the Regional Greenhouse Gas Initiative (RGGI)," Energy Economics, Elsevier, vol. 100(C).
    10. Seung Min Kim & Kenneth Gillingham, 2024. "Air Pollution and Solar Energy: Evidence from Wildfires," CESifo Working Paper Series 10948, CESifo.

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