Public resistance to extracting oil and gas from shale formations is tied to beliefs about local consequences. A well-informed understanding of local consequences matters because policy debates swayed by unrepresentative, anecdotal evidence may lead to the omission of real problems or chasing after costly, phantom issues.

Local governments face challenges and opportunities from unconventional oil and gas development. The activity can create major infrastructure and service impacts, raising issues of local control and capacity to respond. Though the development can generate short term financial gains, it is critical that officials make decisions for the long run.

Hydraulic fracturing has started a new energy boom across the United States. Growth in state and local employment and earnings has accompanied the dramatic increase in oil and gas production. Previous resource booms and busts provide insights into the long-run impacts of a natural resource boom.

Shale development affects agriculture in diverse ways. Farmers receiving royalty payments may invest in their agricultural business, switch agricultural activities, or work less. However, competition for labor, water, land, and infrastructure, as well as land or water contamination accidents, can reduce farm profitability.

Ownership of mineral rights determines much of the economic gains from oil and gas development. The gross royalty receipts were about $31 billion in 2012. How much of the value accrues to local residents, and the spatial pattern of royalty capture are important questions asked by policymakers and community leaders.

One of the most contentious issues surrounding hydraulic fracturing is the potential for negative impacts on water resources. These include impacts on both available water quantities and water quality. There is a quickly growing scientific literature investigating these impacts to guide communities and policy makers.