Facing the true cost of fracking; social externalities and the role of integrated valuation

•Decision making processes for major coal seam gas projects (hydraulic fracturing or fracking) need to incorporate early evaluation of social externalities.•They need to address the issues of equitable distribution of benefits, consideration of an even balance of power between landholders and operating companies.•Consider the alignment of project activities with regional and community planning objectives.•Unresolved concerns of community residents about environmental and social impacts contribute to lower life-satisfaction and lead to a weaker local economy.

This paper is based on a recent study that evaluated social externalities and examined how quality of life has been influenced by coal seam gas (CSG) projects in Southeast Queensland, Australia. CSG projects, also known as unconventional gas pose spatially extensive impacts on rural communities and tend to overlap other land uses, such as agriculture. This paper identifies key themes for evaluating social externalities of major resource projects using mixed-methods approach and structural equation modeling, and provides empirical evidence to support the multi-scale methodological framework for integrated valuation of ecosystem services.The findings demonstrate alignment between cultural, economic and ecological value-domains and factors influencing quality of life and human wellbeing. The analysis shows that unresolved concerns of community residents about environmental and social impacts contribute to lower life-satisfaction and lead to a weaker local economy. This paper argues that integrated valuation of ecosystem services will not only improve project decision-making and planning, but also support efforts to minimize negative social externalities of major resource extraction projects.