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Fracking: A Potential and Profitable Nightmare

Opinion | May 6, 2013

Photo: Natural Gas Fracking by Daniel Foster

My inbox has been pounded recently with emails from all sorts of advocacy groups about hydraulic fracturing. Matt Damon’s new movie, “Promised land,” takes a look at it, and even the House of Representatives subcommittee on energy and Power held a hearing in February that focused on fracking. if you replaced the second and third letters of fracking, it would be the new favorite of teens looking to get their mouths washed out with soap. Yet, fracking is rife within our modern discourse, and few people truly understand what it means.

Hydraulic fracturing, known as fracking, is a practice used to coax oil and natural gas from hard rock formations. it involves forcing huge amounts of water, a propant (usually sand) and chemicals down the wellbore to force oil and gas to the surface through the bore. Environmentalists are adamantly against it, the government doesn’t know what to think, and the energy industry is calling fracking one of our century’s greatest technology revolutions.

So what is the big deal? Right now, the United States is producing more natural gas domestically than we can use. A ton of the natural gas that is driving the domestic gas boom comes from fracking. We are in the midst of a debate over whether the economic benefits of exporting liquefied natural gas produced by fracking outweigh the potential cost to our natural environment. America can stand to gain economically and politically by exporting fracked gas and should do so. However, we run the risk of widespread pollution. Gas companies are in need of sensible regulations to prevent nightmarish contamination without impinging upon their operations.

Hydraulic fracturing has allowed energy producers to tap previously untouchable sources of natural gas, specifically in shale rock formations in Pennsylvania, Colorado, and the Dakotas. It is currently totally legal and not well regulated. Daniel Yergin, vice president of IHS, recently claimed, “Shale gas has now gone from 2% of our energy supply to 37% of our energy supply.” And that supply of domestic natural gas is likely to increase. The EIA now projects the U.s. natural gas production will increase from 23 trillion cubic feet last year to 33 trillion cubic feet in 2040, a 44% increase. This will be due almost entirely to the projected growth in fracking.

This explosion of domestic production has created a glut of gas supply, lowering the domestic price of gas. Natural gas prices are much lower in the U.S., at less than $4, than in europe (around $10) and east Asia (between $12-$15). This differential in price is expected to continue for some time to come.

Gas producers are demanding that the U.S. government allow for liquefied natural gas exports of the fracked gas. Obviously, the current price differential between the United States and the rest of the world would allow for sizable profits to be made. We also possess a fleet of tanks and plants in the Gulf Coast that were built to handle liquid natural gas imports. Due to the boom in domestic shale gas production, these plants are now idle. Yet, the United States is a long ways away from exporting LNG. Why? Firstly, each energy company would have to retool their LNG import terminals to handle exports at a cost of $5 billion dollars per plant. Secondly, current legislation requires that the Department of Energy sign off on each export license, and as of yet, only one facility, Sabine Pass in Louisiana, has been allowed to begin the process of exporting LNG. A strong, vocal lobby by American corporations has stalled the Doe’s permitting process: energy-hungry American businesses do not want the U.S. to start exporting LNG because that will lead to an increase in domestic gas prices.

Finally, and perhaps most importantly, LNG exports would depend upon a continued increase in domestic gas production. the majority of the domestic gas production would come from fracking. And therein lies the pivotal argument around LNG exports: while there is a lot to gain by exporting LNG, the environmental impacts of fracking are as yet unknown but potentially numerous.

Environmentalists are adamant that fracking pollutes drinking water, and they point to wastewater and the associated contaminants as strong reasons to outlaw fracking. Hydraulic fracturing occurs in multiple stages, and at each stage, wastewaters and contaminants are produced. Research has proven that these pollutants can be dangerous if they are released into the environment or if people are exposed to them. They can be toxic to humans and aquatic life, and the contaminants can also damage ecosystem health by depleting oxygen or causing algal blooms. Furthermore, the safe Drinking Water Act of 2005 does not specify any regulations for hydraulic fracturing, and companies are not required to report the chemicals they inject into fracked wells. Many environmentalists implicate the unknown quantity and chemical makeup of chemicals being injected underground as reasons to eliminate the practice in the U.S. because we simply cannot predict the effects, either in the long or short term.

Yet, proponents of fracking maintain the claim that there is no substantiated research that clearly links fracking and drinking water contamination. The EPA is currently undertaking another study of fracking that is projected to be completed by 2014, but at the moment, there is not an accepted connection between fracking and polluted water supplies. Moreover, proponents of fracking insist that the United States has much to gain by exporting our supply of natural gas. Expanded domestic supply will surely add resilience to our energy markets, and prudent expansion of U.S. gas supply may actually add a positive, additional level to U.S. influence worldwide.

America should export domestically produced natural gas, but only if we can do so in an environmentally conscious way. Obviously, the U.S. can stand to gain from exporting LNG. American energy companies will profit tremendously from the sale of natural gas on the international market. American corporations will lose out on incredibly low gas prices, but gas prices are currently unsustainably low. They will rise whether exports are allowed or not, but prices will remain lower here than elsewhere. America also increases its national security, and its influence worldwide, by expanding domestic production of gas for export.

Fracking will never be taken off of the table; there is simply too much money to be made from the practice. on the other hand, American corporations and energy suppliers should recognize that the potential environmental impacts of fracking are astronomical. A dearth of federal regulation has allowed gas producers the leeway to pollute at will, which needs to end. Gas suppliers, the government, and environmentalists are all waiting on the outcome of the EPA’s 2014 study on the “Environmental Impacts of Hydraulic Fracturing and Its Potential Impact on Drinking Water Resources.” If used appropriately, the results from this study may allow for reasonable regulation that helps protect our country’s water supplies from toxic seepage while allowing energy companies to profit. Natural gas is a necessary component of our country’s economy. Both sides of this equation need to work together to make exporting our domestic supply of gas a viable and sustainable part of our country’s wealth.