Problems and Solutions when Fracking to Produce Natural Gas
English 215
7 December 2013
Professor Jordan

Problems and Solutions when Fracking to Produce Natural Gas
In light of the reality of a brutal U.S. Economy and dismal employment numbers, as well as soaring gas prices, it has never been more important than now to aggressively pursue energy independence. One way to do this is to expand fracturing. While this concept is popular in some circles, be they economists or politicians, it is not popular with all, and therein lays the challenge. Where there is challenge though there is also opportunity, and where a problem is identified, a solution must be offered. Does this concept of fracturing make sense to pursue? Yes it does, and we will explore the fracking of shale as a national policy, the challenges thereof, and look at some possible solutions that our lawmakers embrace. We will begin with a brief historical overview of the fracturing of shale.
Fracturing in the United States is not exactly unknown, as hydraulic fracturing began in this country 130 years ago, making us the most “fracked” country in the world. Large scale fracking began in earnest though in the 1980s, when Mitchell Energy Development Corporation used this technology on the Barnett Shale play in Texas. What is the current status of shale fracturing? The United States in the past 130 years has produced more than 839 trillion cubic feet of gas (TCFG). Shale gas production is expected to grow 113% between now and 2040 (Fracking Resource, 2011). On paper these figures seem impressive, so what is the problem, if there is one, one might ask? Let us examine potential problems that some may suggest. We will discuss safety concerns, the argument of economics, and lastly the political aspect as related to fracking.
One of the problems when it comes to fracking is one of safety, and that is to us, and to the environment. The public wants to know that fracking is safe for them and the environment so that must be addressed. Another problem is economics, which is to say, does it make sense economically to aggressively pursue fracking? This means we must see a cost benefit, which means lawmakers must be convinced as to the economic viability. Naturally the next logical question is what are the political challenges? So, is fracking safe, is it economically viable, and can we get buy in and support from our lawmakers as they wrestle with the political angle? These are just three potential problem areas, but let us explore them in order, beginning with safety and the environment.
A valid concern with full scale fracking in any neighborhood or community is one of safety and environmental impacts. Wherever fracking takes place, there are instances where the general populace is close by. For example, a year after the BP oil spill, a Chesapeake Energy gas well had a blowout, spilling thousands of gallons of fracking fluid all over the ground (Walsh, 2011). If it happens once, it can happen again any clear minded person would reason. Is this safe for us and does it harm our environment? Can hydraulic fracturing cause earthquakes, as this process happens underground? These are again valid concerns and here is another. Water treatment plants struggle at times to deal with fracking water. What are we doing about that? Finally, a recent report by the House Energy and Commerce Committee has found that 14 of our country’s most active hydraulic fracturing companies used 866 million gallons of fracking chemicals, which includes benzene and xylene, potentially toxic (Walsh, 2011). A clear challenge to be sure but let’s move forward and discuss another problem, that of economics.
Fracking makes economic sense and can help our economy. This is a bold statement, but not one embraced by all parties. Why do we suppose this is true, or does fracking not make sense economically? Studies in New York and Pennsylvania say the fracturing has negative impacts on areas such as tourism, farming, natural gas drilling and other environmental areas (“Shenandoah Valley Network,” (2013). This study gives the naysayers of fracking ammunition to promote “no fracking.” It is a fact that our economy is in need of a boost, but if this study indicates that fracking makes no sense economically, than those that support fracking must counter the findings of that study and that might be a potential problem. Let’s move to our third challenge and that is getting lawmakers to support this effort. Is it a politically smart move for our lawmakers to endorse fracking? There are arguments against it, but let’s look briefly at the politics of it all.
Politicians look at everything through the prism of election and reelection. With regards to fracking, a politician has to ask him or herself, is it an issue that makes me more or less electable? What do the people want? Of course politicians have their own biases when it comes to issues, so if they come down against fracking, they have to sell it based on something besides personal bias. For example, a politician will talk of some of the very issues we have already discussed and one such is environmental concerns. Another important fact that must not be overlooked is just how toxic the very issue of fracking is. Some politicians support it and some do not and it’s based on how polarizing the topic is. Consider the great state of Colorado, where some Democratic cities like Boulder and Lafayette have restricted fracking. Less liberal areas like Broomfield are less likely to favor a restriction on fracking. Now let’s look at Ohio and specifically Youngstown and Bowling Green, where ban fracking initiatives were defeated, but voters in Oberlin Ohio approved a fracking ban (Wines, 2013). We can see that the political machine is moving in opposite directions and in opposite places within a state and in multiple states. The reason for this political struggle is because it depends on how fracking is presented. Is fracking safe or does it harm the environment? Or is it really safe, has minimal to no environmental impact, and the potential benefits economically are such a plus that we must all get behind it? As we can see from a political viewpoint, our lawmakers locally and nationally have their hands full with this challenging issue.
The fracking of shale to produce natural gas has many challenges. These can be political, economic and environmental. Arguments can be made logically to support or oppose fracturing. We have discussed some potential problems with regards to fracturing and these problems may seem daunting and perhaps insurmountable. However, all is not lost. There are indeed solutions to these challenges that can lead the way to a booming economy, more jobs and a means to energy independence for our great nation. If this nation is to become energy independent, and fracturing is a means toward that end, then the problems identified associated with fracturing can be offset by smart solutions that make sense. Those solutions must first be introduced and explained by the President of the United States and the policy makers of this great nation. A national awareness campaign must be launched, to be embraced by consumers and businesses alike. This campaign would explain three major advantages to our country if we expand on fracturing to produce natural gas. These advantages are lower gas and energy prices, a stronger and more robust economy, and the ultimate realization of energy independence from foreign markets. Let us discuss these three advantages, and we shall begin with lower gas and energy prices.
Consumers are the immediate beneficiaries of lower gas prices, because they would have more disposable income, and that is our first advantage to discuss. The mathematics of this dynamic are easily illustrated.

Let us examine gas prices today, as we view the chart above, where current averages are about $3.20 per gallon (McFadden, 2012). While these prices are better now than 3 years ago let’s say, they are still significantly higher than the previous administration. When President Obama took over, the average price at the pump was $1.84 (Spiering, 2013). That is a difference of $1.36 between then and now. The average price of a gallon of gas during President Bush’s administration was $1.68 during his first 4 years, and $2.14 during his entire presidency (“Start Thinking Right”, 2013). These figures illustrate the differences in philosophy and policy between the two men. Those differences are directly reflected on us, the consumer who feels the impact in our pocket books. Now let’s crunch the numbers to put these policy differences into perspective. We will assume a consumer has a 20 gallon gas tank which must be filled once a week. Under President Obama we know that today the difference in price is $1.36. Let us now multiply that number times 20, the size of our tank. Our dollars spent for the week just in gas prices are now $27.20 more than what they could be. For the month that is $108.80 and for the year, that is $1305.60, based on a 4 week calculation per month. Let us speculate just for arguments sake that today there are still 208 million licensed drivers, as there were in 2010 (“Number Of,” (2010). We know we would have had to spend money to fill up our tanks anyway, but let’s use $1.84 per gallon instead of $3.20. $1.84 per gallon for 20 gallons is $36.80 a week and for the month is $147.20 and for the year it is $1766.40, same calculation of 4 weeks. Conversely, $3.20 a gallon for a 20 gallon tank is $64 and for the month is $256 and the year is $3,072. We again use our 208 million licensed drivers and figure what is spent on gas per driver at $1.84, versus $3.20 a gallon. We are spending, as consumers only mind you, approximately $638,976,000,000 on gas annually, but we could be spending as little as $367,328,000,000 for a difference of $271,648,000,000. These are real numbers that affect real people. This is the potential money not being spent or invested that hurts our businesses, our banks, our economy and our country. This is the message that must be conveyed and articulated by the President who could convince the public if he himself is convinced. This is one example of the advantage of lower gas prices for we the consumer and business owner. We have not even touched on lower airfare prices or lower prices of goods and services. It takes gas to power an 18 wheeler and this is the principal way in which products are moved. The cheaper the transport prices, the cheaper the price of the product. The exact opposite is true as well, where high gas prices result in higher transportation costs and those costs are levied on the consumer. Be that as it may, let us discuss another advantage already mentioned briefly, and that are the economic advantages. What is the economic advantage to having lower prices at our fuel pumps? Let us explore this topic next.
We should increase fracking to increase our natural energy which results in lower gas prices for us as consumers and also gives us more economic freedom and purchasing power. This sounds great in theory but the reality is it’s happening now in the great state of North Dakota. The unemployment rate today in North Dakota is 3% according to the Bureau of Labor Statistics, while conversely a state like Michigan sees their rates at 9%. (United States Department of Labor, 2013). These are two extremes on opposite ends of the scale, but on a national level we see our current numbers, as of Nov 2013 on the chart below at about 7.0%. (Bureau of Labor Statistics, 2013)

The more people working in a state or in a nation means there are more people with more money to spend and we know that spending money on goods and services is the lifeblood for a strong economy. Why do we suppose the unemployment numbers are so low in North Dakota? It is because according to a Reuter’s (2012) article last year, “…North Dakota should overtake Alaska as the second largest U.S. producer within months, extending an unexpected oil rush that has already upended the global crude market, clipped U.S. oil imports and made the state’s economy the fastest growing in the union.” (Gebrekidin, 2012). Take that statement in context and digest it. North Dakota has the fastest growing economy in the union and clearly illustrates our second advantage. If we as a nation embrace the state of North Dakota’s blueprint of economic growth through increased and aggressive fracturing, we will reap those same benefits on a national level. This takes us to our third and final advantage, and that is energy independence.
In order to achieve energy independence, we must embrace oil exploration and the fracturing of shale to produce natural energy. We must “drill baby drill” as Governor Sarah Palin once said. According to a recent Forbes (2012) article, “At a time when jobs are so important to the health of our economy, fracking offers the potential for major job creation” (Touryalai, 2012). It also mentioned a point covered earlier, that of low unemployment. As well a crucial point is made, because when a state like North Dakota has such a great economy in large part due to fracking, it has more money in the form of a state surplus of $1.6B. This has led to North Dakota being able to invest in fixing and building roads and investing in schools and social services (Touryalai, 2012). We see how if a state can be successful, then one nation can also be successful. The United States has more oil than all the Middle East put together, but our own government is in the way of its extraction (Geller, 2009). Is there anyone thinking about energy independence, given these facts? According to Bloomberg, (2013) “Soaring shale output in the U.S. is helping the world’s largest oil consumer achieve its highest level of energy independence in two decades” (Smith, 2013). This brings us back to one of our earlier themes, that of political challenges. The idea of energy independence is a simple one to realize, it need only be embraced by we the constituents and of our elected leaders and ultimately the President. This means that energy independence can possibly move forward in the year 2017, after our next election, as it is clear that the President is not interested in energy independence, and fracking as a means toward that end. Nevertheless, the idea of fracturing to produce natural energy is not one that will go away, as there are far too many advantages as has been noted, but that is where we will leave it for now. Let us review what has been discussed thus far.
Fracturing to produce more natural energy has many advantages, not only for us as consumers, but also for we as a nation. Lower gas prices could put over two hundred and seventy billion dollars annually back into our pockets. This would lead to more money being spent by the consumer and in turn leads to an improved economy. A strong economy translates into a strong nation. Ultimately, fracturing leads to more oil and energy production and we have simply to tap into the largest oil reserves in the world located right here in the USA. Finally, our ultimate goal is energy independence from nations like Saudi Arabia, Mexico, Yemen, Kuwait and others that benefit from us importing from them. We see the blueprint for success from our friends in North Dakota. Thus we must conclude that if we follow their lead as a nation, we will see our economy grow and our citizens and nation prosper. We have the solution right at our finger tips and literally right beneath our feet and we will see this concept embraced nationally. Why will this happen one might ask? Simply put, it makes too much sense not to do everything possible to reduce energy costs and improve our economy. Pragmatic minds are starting to realize this and realize too the real value in energy independence. However, some may still argue and are not persuaded. They say there are in fact disadvantages to fracking. Fracking is not safe, it has no economic advantages to this nation and it is political suicide to endorse an energy policy of fracking. Let us examine these three potential disadvantages and summarily refute them, beginning with safety as pertains to fracking.
How safe is fracking and does it negatively impact the environment or us? There are dangers in most any technological endeavor and fracking is not exempt. One of the safety concerns was illustrated by a Duke University study recently. The study showed that water discharged from the Josephine Brine treatment facility in Pennsylvania was hazardous downstream but not upstream (Carus, 2013). This shows carelessness at best and the remedy is to simply dispose of hazardous water at the proper disposal site. Further, try to ensure these sites are not located near populated areas where citizens are in danger of being exposed to unsafe or contaminated ground water. In other words, we must eliminate the disadvantage by simply introducing advantages like being safe and responsible and we must also ensure that those entities that create unsafe conditions for the public be dealt with harshly. Public safety should be paramount and with that that said, let’s look at the potential economic disadvantages of fracking.
Fracking is not embraced by 100% of the nation and some say there are no economic advantages to fracking, so why do it? The idea behind the economic disadvantages are that companies will damage the land, or infect the land, and then leave at some point and stick the tax payers with the cost of restoration. This kind of argument can be found in blogs where users are many times anonymous and not credible. As has been mentioned, no clear minded person really believes the economic disadvantages alleged by the naysayers to fracking, except for perhaps a politician. Some may say politicians are not good sampling segments of society, as they change their minds constantly. The political disadvantage to backing the fracturing of shale to produce natural energy is the last topic.
The political disadvantage for a politician is simply one of election or reelection. If a politician supported fracking in his district, and then a disaster happened where there were mass casualties, it is possible that said politician might not get reelected. The counter to that is to ensure property safety protocols and measures are in place. If those safety protocols are violated, the politician goes on a negative and public campaign illustrating how company X has broken safety laws and regulations, thus turning a negative situation in something he or she can take advantage of. In other words, turning a disadvantage to an advantage, which is a mandatory skill set for politicians anyway. Let’s conclude with a brief review of fracking, the problems and solutions associated with fracking, and some advantages and disadvantages.
We know fracking is the process where high pressure water is mixed with chemicals and takes place far underground to break up shale. The purpose is to extract the natural energy. The challenge, or problem is to do it safely and the solution is enforcement of safety regulations and prosecution where necessary on those that violate these environmental regulations. We must not have environmental safety issues for the sake of energy policy. This means that if we as a nation pursue fracking as a component of our national energy policy and we do it safely, it has immediate advantages. On a global economic scale, we can realize the potential of energy independence. Our next advantage as a nation is lower energy prices for we the consumers because if we produce more domestically, we import less and export more as a nation. Lower gas prices is our last advantage for we the consumer because if our gas prices for our vehicles are reduced and similarly if our heating costs at home are also reduced, what happens? We the consumer have more disposable income, we have more money to spend on goods and services. This helps big and small business and stimulates our economy which in turn allows businesses to expand and prosper. To conclude, and in light of the reality of a brutal U.S. economy and dismal employment numbers, as well as soaring gas prices, it has never been more important than now to aggressively pursue energy independence by fracking.

References
Bureau of Labor Statistics (2013). Retrieved from http://data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=LN_cpsbref3
Carus, F. (2013). The Guardian. “Dangerous levels of radioactivity found at fracking waste site in Pennsylvania.” Retrieved from http://www.theguardian.com/environment/2013/oct/02/dangerous-radioactivity-fracking-waste-pennsylvania
Fracking Resource.org (2013). Retrieved from http://frackingresource.org/what-is-fracking/fracking-impact/united-states-fracking/
Gebrekidin, S. (2012). Reuters. “Insight: natural gas pain is oil’s gain as frack crews head to north Dakota.” Retrieved from http://www.reuters.com/article/2012/03/19/us-bakken-shale-fracking-idUSBRE82I08620120319
Geller, P. (2009). Atlas Shrugs. Retrieved from http://atlasshrugs2000.typepad.com/atlas_shrugs/2009/10/the-us-has-more-than-all-the-middle-east-put-together.html
McFadden, K. (2013). Traveler’s Today. “Thanksgiving 2013: more travelers to take to the road as gas prices average below $3 dollars a gallon.” Retrieved from http://www.travelerstoday.com/articles/7831/20131120/thanksgiving-2013-more-travelers-to-take-to-the-road-at-gas-prices-average-below-3-a-gallon.htm
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