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Terry E.  Cohen headshot

Study Links the Location of Oil and Gas Wells with Redlined Neighborhoods

A new study about redlined neighborhoods finds a strong correlation between structural racism and the siting of active and inactive oil and gas wells.
By Terry E. Cohen
Redlined Neighborhoods

A 1939 map of redlined neighborhoods in Los Angeles, California, one of the 33 cities included in the Nature.com study

In the U.S., April commemorates Fair Housing Month, the anniversary of Martin Luther King Jr.’s assassination and the now-global Earth Day. This year, those events find a fitting relationship in a sobering new study published in the journal Nature that identifies a strong correlation between structural racism and the siting of active and inactive oil and gas wells. The raw numbers on redlined neighborhoods date back nearly a century, but the human, societal and financial costs continue to this day.

David J.X. Gonzalez and other researchers from three major universities drilled down through data from the Great Depression era. They discovered that redlined neighborhoods in the U.S. comprising racially and economically marginalized populations had twice the density of oil and gas wells in and near them as those with predominantly white, more affluent residents.

The study does not assume causation in its findings. However, the connection between the increased environmental hazards and minority-majority communities is clearer than the air.

The study examined 33 cities in 13 states that had neighborhoods graded by a federal agency for lending risk (A for “best” to D for “hazardous”), and at least 10 wells drilled or operated within 100 meters of those graded areas. It then focused on 17 of those cities for which 1940 U.S. Census information was available.

Here’s where that historic data tells a disturbing tale.

Yes, redlining is systemic racism

The term “redlining” comes from the historic maps used by the study, which were developed by the Home Owners’ Loan Corporation (HOLC), a three-year New Deal program enacted in 1933 to provide mortgage refinancing to prevent non-farm home foreclosures. The maps arose from HOLC’s City Survey project, conducted from 1935 through 1940. Color-coding the neighborhoods, HOLC shaded and outlined the D-graded areas in red.

Blacks, Hispanics, Jews, Indigenous peoples, Asians and other ethnicities — sometimes  described in the HOLC records as “subversive racial elements” — populated many of those redlined areas then and often do so to this day. HOLC didn’t develop the maps until after it issued the bulk of its lending, so historians and other experts differ in their assessments of whether HOLC applied racial factors in making loans.

Discriminatory practices in the private sector — real estate, insurance and lending — took place long before the redlining moniker surfaced and before the federal government’s involvement in housing. Those industries supplied much of the data captured in the City Survey project. Therefore, it’s possible HOLC’s maps acted more as a reflection of prevailing racist practices than as a catalyst for them. The maps likely became a tool for subsequent steps in lending package management, including foreclosure resale valuations.

Regardless of HOLC’s guilt or innocence along these lines, its maps bear witness to the adverse race-based attitudes and practices of that time period. The Federal Housing Administration (FHA), on the other hand, created in 1934 to insure new mortgage financing, wrote racially overt guidelines. Its 1939 underwriting manual stated that “if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes.” Also, the FHA destroyed its own maps in response to a 1969 civil right lawsuit.

The legacy of redlined neighborhoods: persistent damage to wealth and health

The 1968 Fair Housing Act did improve opportunities for homeownership — the single biggest generational wealth builder in the U.S. — with rates for Black home ownership increasing over the next decade. But over time, the rate of Black homeownership has fallen back to its 1970 level as redlining continued, racially restrictive real estate covenant effects persisted, gentrification grew and recessions hit. Appraisal bias still is apparent, too.

A home further loses value by its “location, location, location” in a redlined neighborhood near an environmental hazard. Individuals and families lose out, and so do public schools when property values drop or remain low. In circular fashion, poorly performing schools negatively impact property values. Tax bases suffer, so rates increase for residential and commercial taxpayers.

Studies link chemicals and pollution to air, water and soil from oil and gas well proximity to various diseases and outcomes, including respiratory illnesses, cancer, cardiovascular diseases and premature births. Increased healthcare costs then spill over into other areas of the economy: Sick employees can’t work, and families have less disposable income for many consumer goods.

Structural racism and environmental injustice is a toxic combination for everyone.

The Gonzalez et al study focuses on the numbers, the correlation of the oil and gas well sites to redlined neighborhoods. However, through its choice of data source — the HOLC maps and descriptions — it triggers an examination of just how tightly racism is woven into the social and economic fabric of the U.S.

It makes one wonder how much more prosperous the country could have been without these “correlations.”

Image credit: Mapping Inequality via National Archives

Terry E.  Cohen headshot

Terry is a U.S.-based writer and editor. With an extensive background in business, government and media, she writes about economic equity for women, public policy, education and efforts to improve environmental impacts.

Read more stories by Terry E. Cohen