Some view fracking as a miracle technology that has reduced U.S. dependence on foreign oil and will transform the country from an oil importer to a net exporter. Others see it as a deal with the devil that will pollute the water we drink and the air we breathe.
Fracking is the hydraulic fracturing of shale rock layers buried deep inside the earth. Water and other liquids are drilled into the ground vertically and horizontally to create cracks in the rock, which then release natural gas and oil into wells built for their collection.
While the technology produces more natural gas, which is less polluting than coal and oil, it also releases methane into the air, which is more polluting than the carbon dioxide released from the burning of coal and oil, and it uses toxic chemicals in the process as well as massive amounts of water. There have even been reports of small earthquakes at some fracking sites, which environmentalists attribute to the technology.
Still, the industry has grown. Fracking has boosted U.S. oil reserves by more than 30% and natural gas reserves by 90%. That’s helped push natural gas prices down to a 10-year low in 2011-2012. And at a time of high unemployment, fracking has created jobs in those states and communities that welcome the technology. North Dakota, as a result, now has the lowest unemployment rate in the country—3.3%, less than half the 7.6% national average.
“A revolution is unfolding in shale gas and oil,’ says historian Niall Ferguson, author of The Great Degeneration: How Institutions Decay and Economies Die. “And the consequences are already quite extraordinary… massive increases in the production of natural gas in the U.S. and dramatic increases in oil production.”
But there are environmental concerns about the technology, which have divided communities states and even countries. France has banned the technology. So has Vermont; New York State has a moratorium and Illinois just adopted tight regulations for the industry. Even Texas has tightened standards for drilling and securing wells.
Ferguson tells The Daily Ticker that some of the criticism of the technology is “overstated” such as “The Gasland” movies, which depict flames shooting out of water taps.
“There have been major improvements in the technology,” says Ferguson. “Safety standards have improved in a significant way.” Otherwise, says Ferguson, the Department of Energy and MIT would not regard fracking in a positive way. “It’s rather unlikely they would be allowing something to go ahead that would cause massive contamination.”
And there are the potential costs to energy companies if disaster strikes, like the billions that BP paid for the Deepwater Horizon oil spill in the Gulf. “The downside risk is very great,” says Ferguson.
But he admits, “There are obviously legitimate concerns that have to be addressed... but the balance of scientific evidence favors the development of this resource.”
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