Natural gas pipelines do not affect residential property values

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From Dr. Eric Fruits,

EconInternational

A recent LNG terminal building boom has, in turn, produced a natural gas pipeline building boom.  Terminals bring in shipments of liquefied natural gas (LNG).  Through a regasification process, the LNG is changed back into gaseous natural gas.  Pipelines transmit the natural gas (in gas, not liquid, form) from terminals to end users and to other pipelines.

In some places, property owners and other stakeholders have expressed concern that a proposed pipeline would reduce the values of nearby properties.  Pipeline operators note that natural gas pipelines typically do not change the general use of the land. Certain building structures and landscaping, however, cannot be built on the pipeline right of way.  Some argue that a pipeline introduces a safety or environment risk, and that such risks reduce property values.  On the other hand, a pipeline can provide a positive amenity, such as a greenbelt or buffer that may increase property values.

Eric Fruits recently completed an

econometric

study of the relationship between residential property values and proximity to a natural gas pipeline.  The analysis indicates that neither the announcement of a proposed pipeline nor the completion of the pipeline had any measurable effect on property values.