Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/304316 
Year of Publication: 
2024
Series/Report no.: 
CFS Working Paper Series No. 722
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
The rise of shale gas and tight oil development has triggered a major debate about hydraulic fracturing (HF). In an effort to bring light to HF practices and their potential risks to water quality, many U.S. states have mandated disclosure for HF wells and the fluids used. We employ this setting to study whether targeting corporate activities that have dispersed externalities with transparency reduces their environmental impact. Examining salt concentrations that are considered signatures for HF impact, we find significant and lasting improvements in surface water quality between 9-14% after the mandates. Most of the improvement comes from the intensive margin. We document that operators pollute less per unit of production, cause fewer spills of HF fluids and wastewater and use fewer hazardous chemicals. Turning to how transparency regulation works, we show that it increases public pressure and enables social movements, which facilitates internalization.
Subjects: 
Environmental regulation
Fracking
Real effects
Disclosure
Water pollution
Sustainability
Corporate social responsibility
Externalities
Unconventional oil & gas development
JEL: 
D62
G38
K22
K32
L71
L72
M41
M48
Q53
Document Type: 
Working Paper

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