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In countries around the world, the public debate over the prospect of high volume hydraulic fracturing for shale gas has revolved around its environmental impacts, while taking as a given that exploitation of this newly available natural gas asset will produce significant economic benefits for local and regional economies. In this paper the authors use multiple methods, including a case study of the Marcellus Shale gas ‘play’in the USA, to examine how the economic costs and benefits of high volume hydraulic fracturing have been assessed. They argue that the economic impact models, which have been used to project potential benefits and job creation, provide only a fraction of the information needed to understand the consequences of drilling for the regions in which it occurs. The paper also examines some of the challenges local communities face in responding to the costs posed by shale gas extraction. The authors’ analysis indicates that, while shale gas development may increase jobs and tax revenues in the predominantly rural regions where drilling occurs, it can also impose significant short-and long-term costs. To fully assess the economic effects of hydraulic fracturing, local and regional policy makers need to understand the boom-bust cycle that characterises natural gas development. This cycle has implications for local costs and benefits short term, and for the longer-term economic development prospects of localities in drilling regions.