Bad news. Your property value is about to go down 22%

Recently we did a three-part series that looked at how increased oil and gas drilling will take away property rights in Stillwater and Carbon counties. The first part looked at the negative impact drilling has on property values, and how surface owners have few rights to protect themselves against the loss. Next we examined how mortgage companies have begun to shy away from lending on properties on or near drilling sites. Last we considered the factors that make it difficult for property owners to receive compensation for damages to their property, with data on the long-term impacts of oil and gas drilling on communities.

Today we’ve got more information on the impact of oil and gas drilling on rural property values, and it’s not good news.

Researchers from the University of Calgary and Duke University studied property sales from 1994 to 2012 in 36 Pennsylvania counties and seven counties in New York. They mapped sales against the locations of shale wells, and they compared homes connected to public drinking-water systems to homes with private wells.

Here’s what they found out:

  • The source of water is a critical factor in determining property values. Properties with private wells suffered a substantial loss in value compared to properties connected to a municipal water system.
  • The loss in property value also varied with distance from a fracked well. The closer you are to a well, the more your property value is reduced; even if you are a significant distance away, the association of your property with drilling mitigates any gains in property value.

“If two properties are similar in everything but the type of water they are using, then we find that difference equals negative 10 percent,” said Lucija Muehlenbachs, an assistant professor at the University of Calgary. In other words, properties with private wells lose 10% more value than properties connected to a municipal water system.

It gets worse. “If you get closer, if you look at the properties that are only 1 km from a shale well, then for the ones that are on groundwater we see a 22 percent loss in property values,” Muehlenbachs said, ”and for the ones that have access to pipe water, there’s zero gain, so essentially all of the positive benefits get wiped out by these negative externalities of having this well pad nearby.”

These “negative externalities” include truck traffic, noise, light, and air pollution.

The study is published at the Social Science Research Network, and can be downloaded here.

If you live in Stillwater or Carbon County, chances are you get your water from a well. If ECA fulfills its promise to frack 50 wells in these two counties, you’re probably going to be within a kilometer of a fracked well. If you don’t own the mineral rights to your land, you’ve got no royalties coming in. That means your property is going to decrease in value by about 22%, and you’ll have nothing coming in to offset it.

And you’ve got nothing to say about it.

However, your elected officials could do something about it if they wanted to. In Montana, county commissions and conservation districts have the power to place restrictions on oil and gas drilling. Here’s how to contact them to let them know you want them to take action to protect your property:

Carbon County Commission
Stillwater County Commission
Carbon County Conservation District
Stillwater County Conservation District

About davidjkatz

The Moses family has lived on the Stillwater River since 1974, when George and Lucile Moses retired and moved to the Beehive from the Twin Cities. They’re gone now, but their four daughters (pictured at left, on the Beehive) and their families continue to spend time there, and have grown to love the area. This blog started as an email chain to keep the family informed about the threat of increased fracking activity in the area, but the desire to inform and get involved led to the creation of this blog.
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4 Responses to Bad news. Your property value is about to go down 22%

  1. Andrew Katz-Moses says:

    These are the kind of sensationalist titles we need to be putting out there. Like.

  2. Becky Grey says:


  3. Pingback: Citizen initiated zoning: a way to restore fairness to oil and gas drilling in Montana | Preserve the Beartooth Front

  4. Pingback: Action Alert: Your voice is needed to put strong Montana setback rules into place | Preserve the Beartooth Front

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