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What Can We Learn about Shale Gas Development from Land Values? Opportunities, Challenges, and Evidence from Texas and Pennsylvania

Author

Listed:
  • Weber, Jeremy G.
  • Hitaj, Claudia

Abstract

We study farm real estate values in the Barnett shale (Texas) and the northeastern part of the Marcellus shale (Pennsylvania and New York). We find that shale gas development caused appreciation in real estate values in both areas but the effect was much larger for the Marcellus, suggesting broader ownership of oil and gas rights by surface owners. In both regions, the greatest appreciation occurred when land was leased for drilling, not when drilling and production boomed. We find evidence that effects vary by farm type, which may reflect correlation between farm type and ownership of oil and gas rights.

Suggested Citation

  • Weber, Jeremy G. & Hitaj, Claudia, 2015. "What Can We Learn about Shale Gas Development from Land Values? Opportunities, Challenges, and Evidence from Texas and Pennsylvania," Agricultural and Resource Economics Review, Cambridge University Press, vol. 44(2), pages 40-58, August.
    • Handle: RePEc:cup:agrerw:v:44:y:2015:i:02:p:40-58_01
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    Citations

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    Cited by:

    1. Hitaj, Claudia & Suttles, Shellye, "undated". "Trends in U.S. Agriculture's Consumption and Production of Energy: Renewable Power, Shale Energy, and Cellulosic Biomass," Economic Information Bulletin 262140, United States Department of Agriculture, Economic Research Service.
    2. Hitaj, Claudia & Weber, Jeremy & Erickson, Ken, 2018. "Ownership of Oil and Gas Rights: Implications for U.S. Farm Income and Wealth," Economic Information Bulletin 276228, United States Department of Agriculture, Economic Research Service.
    3. Hitaj, Claudia & Weber, Jeremy G. & Hopkins, Jeffrey W. & Erickson, Kenneth W., "undated". "Ownership of Oil and Gas Rights and Farm Sector Income and Wealth," 2018 Annual Meeting, August 5-7, Washington, D.C. 274316, Agricultural and Applied Economics Association.
    4. Katie Jo Black & Shawn J. McCoy & Jeremy G. Weber, 2018. "When Externalities Are Taxed: The Effects and Incidence of Pennsylvania’s Impact Fee on Shale Gas Wells," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(1), pages 107-153.
    5. Lee, Brian & Chang, Hung-Hao & Wang, Szu-Yung, 2021. "Solar power promotion plans, energy market liberalization, and farmland prices – Empirical evidence from Taiwan," Energy Economics, Elsevier, vol. 99(C).
    6. Jeremy G. Weber & J. Wesley Burnett & Irene M. Xiarchos, 2016. "Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 35(3), pages 587-614, June.
    7. Jason Brown & Timothy Fitzgerald & Jeremy G. Weber, 2016. "Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties," Research Working Paper RWP 16-12, Federal Reserve Bank of Kansas City.
    8. Hoy, Kyle A. & Xiarchos, Irene M. & Kelsey, Timothy W. & Brasier, Kathryn J. & Glenna, Leland L., 2018. "Marcellus Shale Gas Development and Farming," Agricultural and Resource Economics Review, Cambridge University Press, vol. 47(3), pages 634-664, December.
    9. Grout, Travis & Ifft, Jennifer & Malinovskaya, Anna, 2021. "Energy income and farm viability: Evidence from USDA farm survey data," Energy Policy, Elsevier, vol. 155(C).
    10. Xu, Yuelu & Elbakidze, Levan & Etienne, Xiaoli, 2023. "Unconventional Oil and Gas Development and Agricultural Land-Use in the United States," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.
    11. Burns, Christopher & Key, Nigel & Tulman, Sarah & Borchers, Allison & Weber, Jeremy, 2018. "Farmland Values, Land Ownership, and Returns to Farmland, 2000-2016," Economic Research Report 276249, United States Department of Agriculture, Economic Research Service.
    12. Backstrom, Jesse, 2019. "Strategic Reporting and the Effects of Water Use in Hydraulic Fracturing on Local Groundwater Levels in Texas," Center for Growth and Opportunity at Utah State University 307177, Center for Growth and Opportunity.
    13. Gibbons, Stephen & Heblich, Stephan & Timmins, Christopher, 2021. "Market tremors: Shale gas exploration, earthquakes, and their impact on house prices," Journal of Urban Economics, Elsevier, vol. 122(C).
    14. Burnett, J. Wesley, 2015. "FOREWORD: Unconventional Oil and Gas Development: Economic, Environmental, and Policy Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(2), pages 1-15, August.
    15. Hitaj, Claudia & Boslett, Andrew J. & Weber, Jeremy G., 2020. "Fracking, farming, and water," Energy Policy, Elsevier, vol. 146(C).

    More about this item

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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