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The impact of shale development on crop farmers: how the size and location of farms matter

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Abstract

New technologies coupled with high energy prices, a desire for energy independence, and cleaner energy, have led to many energy companies investing large amounts of capital into rural places. In the last decade, along with solar and wind, unconventional shale oil and gas production has risen steeply throughout the United States (U.S. Energy Information Administration, Drilling productivity report, 2018) boosting economic growth and stimulating wealth creation in many communities. Because farmers own or operate over half of rural lands in the lower 48 states, the possibility is high for shale development to contribute to the financial well-being of farmers with land in shale regions. However, by focusing on the large royalties of some landowners, environmental and social risks that farmers encounter may be overlooked. To address the gap of farmer impacts, I examine the experiences and perceptions of crop farm owners who reside in two established shale plays: the Bakken region in North Dakota and the Marcellus region in Pennsylvania and in one emerging shale play: the New Albany region in Southern Illinois. I survey farm owners of both large and small crop farms, who farm a variety of crops both by conventional and organic methods. By having such a diverse sample of farm owners in both established shale plays and emerging shale plays, I explore how farmers’ experiences differ with respect to their finances and investments, environmental degradation as well as how their perceptions of trust in oil and gas companies and community rifts differ.

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Notes

  1. Mineral rights refer to owning some or all of the mineral wealth underground, usually below 300 feet. This division of surface and underground wealth differs depending on the region. Historical arrangements made between certain industries (like the rail sector), the federal government, state governments, housing developers, and landowners have led to some states like Colorado and Oklahoma to have split estates, where surface and mineral rights are often severed. Whereas other states like North Dakota typically have surface and mineral rights together with the landowner while some states, such as Illinois and Pennsylvania, vary by region.

  2. For example, air pollution related to shale development has global, regional, and local effects. While effects at all levels are harmful and can be devastating, exposure at the local level to air pollutants such as diesel particulate matter, hydrogen sulfide, and other volatile hydrocarbons can directly lead to respiratory problems, cardiovascular problems, reproductive system effects, nervous system problems, cancer, and premature mortality (Srebotnjak and Rotkin-Ellman 2014). At the global level, emissions of carbon dioxide and methane from shale development contribute to climate change. While devastating and potentially catastrophic, the effects are unequal, cumulative, and due to a wide variety of human production and consumption activities, with shale development being one of them.

  3. Previous research (Boudet et al. 2014) finds that women are less likely than men to support shale development. Therefore I oversampled for female farm owners to be able to control for gender in the analyses.

  4. The median farm size of farms in the Bakken region was 1108 acres. This was quite larger than the median size of farms in the New Albany region (218 acres) and Marcellus region (168 acres). I chose the cutoff amounts for each region based on a combination of the median and mean acreage of farms in the sample. I used other cutoff points (based solely on the median or the mean) and found very little difference in the analyses.

  5. In 2013 and 2014, lively debate occurred in Illinois as the oil industry was considering operations in the New Albany region in Southern Illinois. Although many local leaders were favorable toward the prospect of shale development and the jobs and wealth creation it would bring to the area, a large opposition emerged that fought the oil and gas industry efforts at every turn. As of 2018, no oil pads had been developed due to low oil prices coupled with the stalling tactics of environmental groups (Wernau 2015). See Crowe et al. (2015b) for more information on the differing perceptions in Southern Illinois at the time of oil exploration.

  6. For instance, the profitability for smaller beef and dairy farmers has been quite poor. According to a study conducted by the Penn State Extension Dairy Business Management Team (2015), the average gross milk price breakeven for Pennsylvania dairy farmers in 2015 was $19.88/cwt. The PA gross milk price in 2015 averaged $18.46/cwt. Therefore, the average farm in their study was projected to lose over $1.42/cwt over the course of the year.

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  1. Department of Sociology, Southern Illinois University, Faner Hall - MC 4524, Carbondale, IL, 62901, USA

    Jessica A. Crowe

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Crowe, J.A. The impact of shale development on crop farmers: how the size and location of farms matter. Agric Hum Values 36, 17–33 (2019). https://doi.org/10.1007/s10460-018-9882-4

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