Oil & Gas Industry the Cause of Problems in Colorado (as Elsewhere)

by Diana Gooding on December 2, 2019

Heather Stephens, Assistant Professor at WVU

Rocky Mountain Not-so High: Oil, gas wells drive down Colorado home values, reveals WVU research

Press Release from WVU Research Communications, November 12, 2019

A cornucopia of contradiction is dotting the landscape of Colorado’s Front Range, at the foot of the Rocky Mountains.

In the foreground of dramatic peaks and valleys, which are never out-of-season for a stunning snapshot, are — oil and gas wells. And they’re influencing house prices.

Heather Stephens, assistant professor of resource economics and management at West Virginia University, found that shale development negatively impacts house prices, particularly for houses with private water and close proximity to the mountains.

Homes that rely on private water have lower valuations due to concerns about potential groundwater contamination from nearby wells. Likewise, a house with wells visible from the property sold for an average of $3,000 less.

These findings come from Stephens’ analysis of data on housing sales between 2006 and 2014 for the Front Range region of Colorado. Stephens co-authored the study with Amanda Weinstein, University of Akron, which is published in the peer-reviewed academic journal “Growth and Change.”

“We find that shale development activity lowers housing prices, providing some evidence that residents in Colorado negatively value this activity,” said Stephens, of the Davis College of Agriculture, Natural Resources and Design.

Most existing research on shale development’s impact on housing values has centered on Pennsylvania, Stephens said. Those studies suggest that only residents with private water negatively view drilling activity. For Coloradoans in Stephens’ study, the negative view is more widely shared.

“The research finds that the value local residents place on shale development varies based on the attitudes of residents, as well as the presence of natural amenities,” Stephens said. “We find that drilling negatively affects the value of proximity to the mountains and mountain views. We also find competition for housing as well and housing developments compete for land and are increasingly in close proximity to each other.”

The researchers decided to focus on Colorado as it serves as a fitting contrast to Pennsylvania. Compared to the Keystone State, Colorado has witnessed a population and housing boom. Colorado residents also tend to value natural amenities and environmental protection more, Stephens said.

“We need to have a more nuanced look at local areas and not just assume what was found in Pennsylvania is going to apply everywhere,” she said. “With this project, we thought, ‘Why not research some place different?’ So that if we got the same results, we could start generalizing that this is what you’ll find across the whole U.S.”

Colorado’s natural amenities affect the capitalization of shale development into housing prices. A house with views of many mountain peaks sells for about 2.5 percent more, or an average of more than $8,000.

The phrase “out of sight, out of mind” may capture the dichotomy between Pennsylvania and Colorado when it comes to well visibility.

“If you live in Pennsylvania or West Virginia, you may not be able to see wells from your house. If I live over a hill, I may not realize a well is nearby,” Stephens said. “But on the Front Range in Colorado, it’s very flat, and then there’s the Rockies. You can see wells more clearly.”

Stephens acknowledged that oil and gas development spurs positive impacts, such as lower energy prices across the U.S. However, most of the costs of development are borne by local residents and communities near the shale development, she said.

“An expansion of oil and gas production in an amenity‐rich area will affect the natural capital of the area, thus there is a substitution effect between increased growth from shale oil and gas development and a reduction in the value of amenities,” Stephens said.

“As shale development increases, policymakers may need to consider policies to address this substitution effect and to maintain or even improve upon the natural capital of these areas. Investing the immediate gains, through severance taxes or other fees, from oil and gas extraction into the natural capital of these areas may help ensure these amenity‐rich areas maintain their quality of life and continue to experience growth in the long term.”

Stephens is also conducting research on shale development’s impact on West Virginia with a current Ph.D. student in natural resource economics and hopes those results will be available in the near future.

See Citation: Title: Household valuation of energy development in amenity‐rich regions

See also: Benzene spike detected near Greeley elementary school, John Herrick, Colorado Independent, November 25, 2019

“Levels of benzene, a known carcinogen, exceeded federal thresholds, and Colorado state officials say the source is likely nearby oil and gas operations”

{ 2 comments… read them below or add one }

Patricia Nelson December 5, 2019 at 11:24 am


Greeley Mother Pens Open Letter to Governor Polis After Benzene Exposure at Local School

To: Governor Jared Polis and Director Robbins, via Colorado Rising, December 3, 2019

My name is Patricia Nelson, I am a resident of Greeley, Colorado and a mother of a student at Bella Romero Academy. On Monday, November 25, 2019, around 12:00 pm, the Colorado Department of Public Health and Environment sent out a press release reporting that an elevated level of benzene had been measured by the CDPHE’s mobile lab located at Bella Romero’s 4-8 grade campus.

The spike in the levels of benzene was measured at 3:50 pm on Tuesday, November 5, a school day. Pick up time is 3:45 pm. Keep in mind that those ‘safe’ levels of exposure – 9ppb – are typically intended for adults, this means that a chemical exposure would be even more dangerous for these children running out of the building after the bell rang.

The mobile lab also measures 12 ft. in the air. On such a cold November day, it is likely the benzene would have been more concentrated closer to the ground where the children actually are. I was made aware of this incident not by CDPHE, nor school officials, but by a reporter inquiring about the findings.

We have been told time and time again by your COGCC commissioners, your administration, and the operator that this kind of site is safe, that there is nothing to worry about. However, the Center for Disease Control, the World Health Organization and dozens of peer-reviewed studies, have said otherwise.

Just in case you need more clarity, there are NO safe levels of exposure to benzene, and now your own agency confirms that the children of Bella Romero have been exposed to this carcinogen. The school officials I met with were under the impression that there would be no activity at the site while the children were in school. For the last two years that has been proven to be a lie.

I am writing to you today to ask that there is an immediate stop to Extraction Oil and Gas’s operation that is located a mere 1,200 ft from the front door of my child’s school.

Governor Polis, you appointed the commission and as the Director of the COGCC, Mr. Robbins, you are not only responsible for the approval of the permits but you are also responsible for the protection of public health and safety from oil and gas operations. A full 21 days passed before we were notified of the exposure. Meanwhile, the families of Bella Romero were dealing with children complaining of headaches and nausea. The same symptoms the recent CDPHE health study said would come from benzene exposure from oil and gas activity.

In some cases, our children stayed home from school due to their symptoms. It would be negligent, in fact, willful and wanton conduct, for you to allow continued oil and gas operations at this site until you can be certain that no further benzene exposure will occur. We as Coloradans still do not have the “basic guarantee” of our safety.

This site has been the center of controversy since its permits were approved in March 2017. This site was not supposed to be here, it was slated to be installed behind a more affluent school in Greeley, Frontier Academy. The Frontier parents were organized by Weld Air & Water, a group of mineral rights owners who were concerned by the proximity to the school.

Extraction Oil & Gas (XOG) later decided that the site was “not ideal for oil and gas operations.” They then went on to prey on a more vulnerable community. The demographics of our community made it easy for XOG to come in and set up shop without a fight. Most of the students at Bella Romero are eligible for free or reduced lunch. The majority of our students are Latinx, refugees, and children of mixed-status parents.

Greeley parents, teachers and community groups have done everything we can to try and stop this site after it was moved to Bella Romero. We sued over the approval of the permits, we have repeatedly protested and pleaded with the COGCC to stop this site.

The 24 wells were featured on The Daily Show with Trevor Noah. The New York Times even wrote a feature story on the audacity of the project. The world is watching.

In the Spring of 2018, you visited our school, Governor Polis, and spoke with me personally. You said that parents like me shouldn’t have to worry about their children’s safety when it came to oil and gas, you all but said this kind of thing wouldn’t happen if you were elected Governor. Your surrogates later went on to announce at the Weld County County Assembly that you were the only gubernatorial candidate that stood with the families of Bella Romero. We have heard nothing from you or your administration since.

I am lucky to have the ability to take a day off from work and stay at the Capitol until 2 am to testify – a job that I have almost lost because all of the time I have had to take off to attempt to protect my child from precisely what happened on November 5th. I shouldn’t have to do that. I am a mother. My biggest concern should be how my child doing in math and reading.

There are short term effects and there are long term effects that will result from this. We have heard this story before, it is not new. Considering the climate platform and “be bold” motto that you choose for your election platform, I would hope you would have the foresight and awareness to address this issue head-on and prevent further harm to these children.

Put an immediate stop to Extraction Oil and Gas’s operation behind my child’s school. This risk as it stands now is unacceptable. I encourage you both to visit the site, it has changed drastically since the last time you were here Governor Polis.

Respectfully, Patricia Nelson

Supporting organizations: Adams County Communities for Drilling Accountability NOW (ACCDAN), Broomfield Active Moms Community, Broomfield Concerned: A Coalition of Neighborhoods, Broomfield CAN, Be the Change – USA, Climate Justice Ministry at Foothills Unitarian, Colorado Rising, Erie Protectors, Food & Water Action, Front Range Residents for Environment, Safety, and Health (FRRESH), Larimer Alliance for Health Safety & the Environment, The Lookout Alliance, Mothers Out Front – Colorado, North Range Concerned Citizens, Our Health Our Future Our Longmont, Physicians for Social Responsibility Colorado, Wall of Women Colorado – WOW, Weld Air and Water, WildEarth Guardians, and 350 Colorado



Terra Rafael February 1, 2020 at 9:47 pm

“REBELLION” Demands to end fracking

Letter to Editor, Denver Post, January 14, 2020

Re: “38 protesters fueled by climate concern arrested after disruption at state Capitol,” Jan. 10 news story

Bravo to Extinction Rebellion Denver and Sunrise for disrupting Gov. Jared Polis’ “State of the State” address! The Colorado Democratic Party consistently campaigns on clean air, alternative energy and stopping climate change. When in office, they continue to refuse to stop the biggest barrier to all those goals — fracking.

The Extinction Rebellion demands for that protest are:

1. Shut down fracking at Bella Romero Academy
2. Develop a plan to end fracking and all fossil fuel extraction by 2025
3. Declare a climate emergency and facilitate a just transition to a renewable energy economy.”

These goals are in line with scientific studies on the health risks of fracking for persons and planet.

If you care, you too can push your local and state officials to protect our children and our climate by pressing for these demands.

Terra Rafael, Lafayette, Colorado


Leave a Comment

Previous post:

Next post: