Fracking and the ‘Win-Win’ Reality of Natural Gas

Mark Green
Posted October 8, 2012

Some plain talk in a Washington Post editorial directed at opponents of hydraulic fracturing, in New York state and across the country:

"… anti-fracking activists who hope delay begets delay and eventually prohibition are doing the environment no favor. Burning natural gas produces only about half the carbon emissions as burning coal, which produced 42 percent of America's electricity in 2011. With the increasingly common use of fracking, natural gas prices have plummeted, encouraging a switch from coal to gas, and the country's emissions trajectory has improved."

Gov. Andrew Cuomo’s decision to order more study of hydraulic fracturing – after four-plus years of studying, reviewing and public commenting – has some folks applauding. This despite the fact that by some estimates natural gas is responsible for huge reductions in carbon emissions this year. The Post editorial says opposition to fracking appears to be at odds with larger environmental goals:

"Now anti-fracking activists in the Empire State are claiming a victory. They ought to think twice about what they are wishing for. Those who would ban fracking or regulate it into oblivion ignore the exceptional benefits that inexpensive natural gas can provide in the biggest environmental fight of our time - against climate change."

Opposition also is at odds with the economic benefits of natural gas and oil produced from shale, which are being seen in North Dakota, Pennsylvania, Texas and other states. Shale and hydraulic fracturing are driving job creation in our industry but also in associated sectors. Ohio and other states are seeing a rise in manufacturing due to shale production, which one study says could create 1 million new jobs by 2025. Steve Sexton writes on the Freakonomics blog that shale gas offers the U.S. advantages all around:

"A suite of technologies has brought vast supplies of previously unrecoverable shale gas within reach of humans, dramatically expanding natural gas reserves in the U.S. and around the world. Horizontal drilling and hydraulic fracturing have produced a fuel that can at once promote a cooler planet and an expanded economy, essentially eliminating the tradeoff between climate change mitigation and the pursuit of other public projects and, perhaps, economic growth."

Production from shale is a big component of the oil and natural gas industry’s overall job-creation dynamic, depicted in this chart by Mark J. Perry:

Like the Post, Sexton is puzzled by fracking/natural gas opposition:

"So at no cost to our global warming efforts, the average American household enjoys $2,000 higher annual income by 2035 with robust shale gas production. That is decidedly a good thing, right? Like the iPhone 5? Not to some environmentalists who mistakenly conflate the high prices that induce energy conservation with high costs that reflect input requirements to produce energy. Low energy costs are good because they free resources for other production, including the production of environmental protection. Even if shale gas were only cheaper than coal, its widespread use would be a boon. But because it’s also cleaner, it becomes a win-win. … The rebuke of shale gas is uneconomic and reflects a penchant of environmentalists to oppose economic growth because of the greenhouse gas emissions that follow. As recent unemployment numbers should remind, however, a stagnant economy means diminishing living standards as the economic pie gets divided among a growing population."

Back to the Post, which suggests that opponents of shale gas, who aren’t satisfied by a 50 percent emissions reduction, are unreasonable:

"True, half the emissions does not mean no emissions. But the United States does not have to eliminate its carbon footprint all at once, nor should it. Doing so would cost far too much. Instead, natural gas can play a big role in transitioning to cleaner energy cheaply. A recent analysis from Resources for the Future, a think tank, shows that low, fracking-driven natural gas prices combined with efficiency measures and a serious carbon tax would result in a massive increase in the use of natural gas, nearly eliminating America's coal dependence by 2035 and cutting emissions from the electricity sector by more than half."

Renewable technologies, meanwhile, would have time to lower costs and address other hurdles to widespread deployment before picking up more of the load later in the century. Environmentalists, in other words, should hope fracking is safe - and permitted.

They should.  Yet, these articles help point out that the current battle over hydraulic fracturing and natural gas from shale is between two sides – one that favors reasonable regulation and continued production improvements against one that wants no fracking and no natural gas at all. It’s the only way to explain opposition to the “win-win” scenario of abundant, affordable natural gas.