$100 Billion in Consumer Surplus from Fracking

Energy production is one of the few bright spots in the American economy. A back of the envelope cost-benefit calculation from a Yale-associated group estimates that recent increases in shale gas production have been worth just over $100 billion annually to US consumers. In comparison, the authors estimates that groundwater contamination costs $250 million per year, a 400 to 1 benefit to cost ratio. The calculation is crude and the authors do not take into account environmental benefits from using natural gas over coal but the ratios are of interest.

Hat tip: Carpe Diem.