Fracking: for U.S. Energy Independence, Economic Stability and National Security

Hydraulic fracturing, also known as fracking, allows the extraction of oil and natural gas from deep rock formations 5,000-20,000 feet underground. It is a process of well stimulation that improves the flow of hydrocarbons into the well bore by increasing the permeability of the surrounding rock. Small fractures, usually less than 1.0 millimeter wide, are made in the rock formations with a pressurized liquid produced from water, sand and chemicals. Some veins and dikes are naturally occurring hydraulic fractures. This technique is commonly used for shale gas, tight gas, tight oil and coal seam gas. Tight oil, also known as shale oil or light tight oil (LTO), is light crude oil that comes from shale, tight sandstone or another low permeability formation.

 

Although hydraulic fracturing has been around since 1949, only in the last decade has it come into wider use, along with other advances in drilling technology such as horizontal drilling. These valuable reserves are now commercially viable, changing America's energy outlook for the better. Oil production, which was on the decline from 1980 onward, has been increasing annually since 2010, attributable to new drilling techniques and fracking.

 

What fracking means for America's energy independency, economic stability and national security is profound.

 

It provides the U.S. with energy security.  Fracking techniques can produce oil and natural gas where conventional technologies are not effective. Previously, there were many oil and natural gas reserves that were difficult to tap, due to the low permeability and porousness of the shale, a problem which is addressed in fracking technology. The very large supplies of oil and gas that are available from dense shale deposits will enable the U.S. to generate electricity, heat homes and power vehicles into the foreseeable future. The U.S. Energy Information Agency reports that more than 750 trillion cubic feet of technically recoverable shale gas and 24 billion barrels of recoverable shale oil currently exist in geographical areas where companies are actively engaged. These locations, called "plays," are in the Mountain States of the West, the South and throughout the Appalachian Basin in the Northeastern U.S.

 

It's good for the economy. The fracking industry generates direct economic benefit in the form of royalty payments to property owners, government tax revenues and high-paying jobs. These new jobs cover a wide range of industries that include surveying and engineering, construction, equipment manufacturing, hospitality and environmental permitting. Indirect economic effects include higher land prices in fracking regions and a boost for those local economies. A study conducted in 2013 by the Manhattan Institute for Policy Research, "The Economic Effects of Hydrofracturing on Local Economies: A Comparison of New York & Pennsylvania," showed that fracking can bring significant financial benefit to rural communities. As reported by the U.S. News & World Report in their article, "Fracking Our Way to Higher Incomes," per-capita income rose by 19 percent in Pennsylvania counties that had more than 200 hydrofractured wells, compared with just 8 percent in counties without any wells. Other states in the country that have fracking operations, such as Texas, Oklahoma and North Dakota, are also part of the financial success story seen with hydrofracturing. A separate study by IHS CERA (Cambridge Energy Research Associates) was reported on by Bloomberg Businessweek in their article, "Fracking Boom Seen Raising Household Incomes by $1,200." This report illustrates how hydraulic fracturing is lowering energy costs and lifting family incomes.

 

It makes the U.S. less dependent on foreign oil. In 2012, about 57 percent of crude oil being processed in U.S. refineries was imported. Although the largest of these importers was Canada, the U.S. also receives oil from Middle Eastern countries such as Saudi Arabia, Iran, Iraq and the United Arab Emirates. This requires an ongoing relationship with historically unsettled regions and adds another layer of complexity to America's response to geopolitical skirmishes.

 

Fracking for natural gas is good business and reduces carbon emissions. On the natural gas side of fracking, the U.S. would not only become self-sufficient in their natural gas needs, but could also become a major exporter, further boosting the economy. Gas used in the place of coal to generate electricity will greatly reduce carbon emissions, which have been shown to contribute to global warming.

Supporting the good economic news of fracking is a recent decision by the U.S. Commerce Department to ease the way of U.S. oil exports. As reported by Bloomberg News in their article, "U.S. widens exports for shale oil," this lessens the impact of a 40-year-old law banning most overseas petroleum shipments. They've widened their definition of an eligible refined product that can be shipped to overseas customers. This means that oil from U.S. shale formations, after some additional processing, may be eligible for export. This recent news makes the future even brighter for hydraulic fracturing and homegrown American oil.

 

Sources

 

http://en.wikipedia.org/wiki/Hydraulic_fracturing

 

http://en.wikipedia.org/wiki/List_of_countries_by_oil_production

 

http://www.energyfromshale.org/fracking-benefits

 

http://www.economist.com/debate/debates/overview/246

 

http://www.aei.org/article/economics/benefits-of-hydraulic-fracking/

 

http://www.heraldnet.com/article/20140626/BIZ/140629463

 

http://www.eia.gov/tools/faqs/faq.cfm?id=32&t=6

 

http://www.usnews.com/opinion/blogs/economic-intelligence/2013/08/21/how-oil-fracking-raised-incomes-in-pennsylvania-and-maybe-new-york

 

http://www.manhattan-institute.org/html/gpr_01.htm#.U7MQEfldVOE

 

http://www.bloomberg.com/news/2013-09-04/fracking-boom-seen-raising-household-incomes-by-1-200.html

 

http://www.ihs.com/index.aspx

 

http://www.heraldnet.com/article/20140626/BIZ/140629463