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Limiting Fracking Limits Affordable Energy and Jobs

Posted By T. Elliot Gaiser On February 20, 2013 @ 5:15 pm In Energy | Comments Disabled

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Photo credit: Newscom

Europe is once again teaching America a lesson in what not to do on energy policy.

A resolution Germany’s upper house passed last week makes it clear that despite the potential for massive and safe economic development, the nation is allowing unwarranted environmental fears to prevent the extraction of massive natural gas reserves via hydraulic fracturing, or fracking.

“The message is we want to limit fracking, we don’t want to facilitate it,” German environment minister Peter Altmaier said [2] last week. “I don’t see in the foreseeable future that fracking will be employed anywhere within Germany.”

Fortunately, the Obama Administration delayed the imposition of new regulations on fracking last month [3], but Germany should serve as an example of where energy policy can go wrong.

As Reuters reports [4], Germany’s BGR Institute for Geoscience and Natural Resources estimates up to 2.3 trillion cubic meters of natural gas could be extracted in the country. But if this resolution translates into law, it would make it virtually impossible for companies to access vast natural gas resources in the northern German plains. To date, no fracking licenses have been granted, leaving Germany to import most of its natural gas from places like Russia.

“This is about rejecting the use of this technology until the risks are cleared up 100 percent,” said Torsten Albig, Germany’s Social Democrat (SPD) premier, citing concerns about drinking water and seismic activity.

But the risks are already minimal. As Heritage Expert Nick Loris has written [5], the process of pumping liquid into the ground to free trapped gas, oil, or geothermal energy is regulated and safe. To date, fracking:

  • Has never caused a documented contamination of drinking water. EPA Administrator Lisa Jackson stated before the U.S. House Oversight and Government Reform Committee [6], “I am not aware of any proven case where the fracking process itself affected water although there are investigations ongoing.”
  • Uses mostly sand and water, and only a small percentage of chemicals that have common household applications. As Tom Chiarella reports [7] for Esquire.com, “It is fairly harsh stuff, but mostly in the same way swimming-pool water is harsh: chemicals diluted in water, making it, in fact, something other than water.” It is so safe, in fact, that Colorado’s Democratic Governor John Hickenlooper claims he drank fracking fluid [8] to prove its safety.
  • Does not cause earthquakes. “Induced seismicity does not occur only from oil and gas extraction,” Loris writes. Rather, “the use of injection wells … produced the seismic activity … out of 30,000 injection wells, there have only been eight events of induced seismic activity—none of which caused significant property damage or injury.”

One thing fracking has done, however, is benefited the economy. In the United States, which has “more than a century’s worth” of recoverable natural gas, Loris writes [9],

Technological advancements in directional drilling and hydraulic fracturing have led to an abundance of natural gas production in the United States that is fundamentally changing the energy landscape. The result has been more jobs, economic growth, and consistently low domestic natural gas prices in what has known to be a historically volatile market.

This is corroborated by a new Institute for Energy Research study [10] presented at The Heritage Foundation’s Bloggers Briefing last week [11]. Specifically, the IER found that increasing access for drilling and fracking on U.S. federal lands over the next seven years would:

  • Increase U.S. GDP by $127 billion annually
  • Add $24 billion in annual federal tax revenue
  • Increase annual wages by $32 billion
  • Create 552,000 jobs annually

By removing onerous restrictions on liquefied natural gas (LNG), Loris explains how these economic benefits could multiply even more: On net, it could translate to an annual average increase in export revenue between $10 billion and $30 billion, “as well as overall increases in welfare and real household income (up to $47 billion by 2020).”

Fortunately, the massive potential for success through this new technology has not gone unnoticed internationally, as Britain lifted its ban on fracking [12] at the end of last year. The practice has created an energy boom in the United States from Pennsylvania to North Dakota [13]. If the myths about fracking are exposed as myths, perhaps Germany will make a better choice for its mostly free economy [14] and endorse this safe and economically beneficial technology.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2013/02/20/limiting-fracking-limits-affordable-energy-and-jobs/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/anti-fracking.jpg

[2] said: http://www.guardian.co.uk/environment/2013/feb/11/german-environment-minister-limit-fracking

[3] delayed the imposition of new regulations on fracking last month: http://thehill.com/blogs/e2-wire/e2-wire/278107-interior-pumps-brakes-on-gas-fracking-rule-plans-revision

[4] As Reuters reports: http://www.reuters.com/article/2013/02/01/germany-shale-bundesrat-idUSL5N0B1GW820130201

[5] As Heritage Expert Nick Loris has written: http://www.heritage.org/research/reports/2012/08/hydraulic-fracturing-critical-for-energy-production-jobs-and-economic-growth

[6] stated before the U.S. House Oversight and Government Reform Committee: http://epw.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=23EB85DD-802A-23AD-43F9-DA281B2CD287

[7] reports: http://www.esquire.com/features/cabot-oil-gas-catskills-fracking-0113

[8] claims he drank fracking fluid: http://www.washingtontimes.com/blog/inside-politics/2013/feb/12/colorado-gov-hickenlooper-i-drank-fracking-fluid/

[9] Loris writes: http://www.heritage.org/research/reports/2013/02/us-natural-gas-exports-lift-restrictions-and-empower-the-states

[10] Institute for Energy Research study: http://www.instituteforenergyresearch.org/beyond-the-congressional-budget-office/

[11] Bloggers Briefing last week: http://blog.heritage.org/2013/02/12/watch-rep-tom-price-and-institute-for-energy-research-at-bloggers-briefing/

[12] lifted its ban on fracking: http://www.nytimes.com/2012/12/14/business/energy-environment/britain-approves-fracking-for-shale-gas-exploration.html?_r=0

[13] North Dakota: http://blog.heritage.org/2013/02/08/free-market-opportunities-propel-north-dakota-to-top-job-creator/

[14] mostly free economy: http://www.heritage.org/index/country/germany

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