Faraktinov/Adobe Stock
The biggest threat to public health from fracking is water pollution, according to the US Environmental Protection Agency. But in 2005, Congress exempted fracking by oil and natural gas producers from the Safe Drinking Water Act, then nearly 30 years old.
State governments, starting with Wyoming in 2010, came up with a hack to help protect their citizens: a requirement that companies disclose most of the toxic chemicals they use in fracking. Seventeen other states followed over the next six years, accounting for most jurisdictions where fracking takes place, write University of Hong Kong’s Anson Jiang and University of Toronto’s Baohua Xin. The researchers find that those disclosures prompted residents of affected areas to take “defensive measures” such as buying bottled water.
Fracking involves cracking underground rock formations by forcing high-pressure fluids into bedrock to release untapped reserves of oil and gas. The average fracking job injects 5 million gallons of liquids containing thousands of chemicals classified as known or possible carcinogens, the researchers report. The chemicals can contaminate ground and surface water through spills, leaks, and inadequate treatment, and have been shown to impair the quality of drinking water.
The researchers studied the impact of the disclosure mandates in counties with active fracking. Most of the states with imposed reporting require oil and gas operators to post information about the chemicals they use on the national FracFocus registry, an open public platform.
Jiang and Xin used the NielsenIQ Retail Scanner data set housed at Chicago Booth’s Kilts Center for Marketing to track household purchases between January 2006 and December 2019, covering the period before and after the introduction of the disclosure mandates across fracking and nonfracking US counties.
They find a 13 percent increase on average in the consumption of bottled water over the course of the study in fracking counties, which they take as an indication that households responded to the public-information programs and took proactive measures to mitigate their risks and exposure to toxins.
Better water-quality data are needed for scientists to fully understand the surface-water impact of unconventional oil and gas development.
Fracking Is Linked to Higher Salt Concentration in Surface WatersBottled-water consumption increased the most in counties where the use of highly toxic chemicals was fully disclosed. However, it increased about the same amount in counties where companies claimed trade secrets prevented the full sharing of information. (Idiosyncrasies in state laws mean that most oil and gas operators are still allowed to selectively withhold information and conceal the identity of chemicals they consider trade secrets.)
Where local news organizations published investigative reports on trade secrets and other chemicals used in fracking, and where there was an increase in searches for related terms in Google Trends analytics, Jiang and Xin find an uptick in local consumption of bottled water.
Demographic data from the Census Bureau reveals that public disclosure led to more bottled-water consumption among at-risk populations—people over 65 and families with children younger than 5. There’s also evidence that people working in the fracking industry consumed an above-average quantity of bottled water, suggesting that they were more aware of the health risks, Jiang and Xin write.
What seems clear is that before the disclosure mandates, Americans probably underestimated their exposure to contamination from fracking practices, including the use of toxic chemicals. The industry was able to exploit this information asymmetry, possibly to the detriment of public health. Environmental disclosure programs drive meaningful change in the public’s response to risk, the researchers conclude.
Yile (Anson) Jiang and Baohua Xin, “Mandatory Environmental Disclosure and Public Avoidance Behavior,” Working paper, April 2024.
A panel of economists considers the currency's impact after a quarter century.
Has the Euro Been a Success?
The Chicago Booth finance professor and Capitalisn’t cohost fields questions on everything from competition policy to his favorite soccer team.
Capitalisn’t: Ask Luigi Zingales Anything
A system of international payments could benefit Brazil and the whole world.
Paying Up to Save the Amazon May Be Cheaper than the AlternativeYour Privacy
We want to demonstrate our commitment to your privacy. Please review Chicago Booth's privacy notice, which provides information explaining how and why we collect particular information when you visit our website.