Debate Nirvana

In 2008, after the innovation gave way to a surge in resources, the wellhead price of natural gas plumm11eted from nearly $8 per thousand cubic feet to $3.67 per thousand cubic feet. This increase in domestic production has kept prices low for American consumers—who get 24 percent of their electricity from natural gas—when not too long ago it was considered by some a foregone conclusion that the United States was running out of gas supplies. Additionally, the advent of shale gas has given rise to enormous economic opportunities in places like Pennsylvania, where development of the Marcellus Shale created more than 111,000 jobs in 2011 with $10 billion added to the state's economy.

Fracking increases an average U.S. household income by $2,700 per year. It has injected billions into North Dakota, Pennsylvania, Texas and other state economies. It’s added $62 billion to federal and state treasuries, with that total expected to rise to $111 billion by 2020. By 2035, U.S. oil and natural gas operations could provide over $5 trillion in cumulative capital expenditures into the economy, while generating over $2.5 trillion in cumulative additional government revenues.

Counties with more than 200 wells added jobs at a 7 percent annual rate over the same time period.Using the Pennsylvania data to project hydrofracking’s effect on New York counties, we find that the income of residents in the 28 New York counties above the Marcellus Shale has the potential to expand by 15 percent or more over the next four years.

Shale gas should be welcomed as good for local economies. Many rural areas are extremely poor and suffering declining populations, with reduced employment opportunities as farming becomes increasingly mechanised and other industries move abroad. Through shale gas, landowners will gain lease payments from drilling companies, local workers will have new opportunities of well-paid employment, Marcellus the biggest shale field could have over 200,000 people working on it by 2020, and businesses will benefit from this new influx of money. In addition, local governments will gain from increased tax revenues, for Marcellus these were $389 million in 2009, allowing them to spend more on schools and services. And the prospect of cheap energy will encourage industry to relocate to these areas, while also holding down energy bills for local consumers.

Between 2007 and 2011, per-capita income rose by 19 percent in Pennsylvania counties with more than 200 wells, by 14 percent in counties with between 20 and 200 wells, and by 12 percent in counties with fewer than 20 wells.

In August of 2011, the U.S. Geological Survey issued a report where they lowered previous estimates of recoverable natural gas located in the Marcellus shale deposits from 410 trillion cubic feet, to 84 trillion cubic. According to the New York Times, buildings that use fracking gasses save 35% on their energy bill. Not only that, but fracking energy is greener than green energy. Fracking companies use only 0.4 acres of land to generate a year's supply of electricity for 1,000 households, whereas solar cells require 8.4 acres to fuel 1,000 households annually.

Fracking will create 1.2 million new jobs by 2020. Hydraulic fracturing has created 1.7 million new direct and indirect jobs in the United States, with the total likely to rise to 3 million jobs over the next seven years, IHS Global Insight reports. A study commissioned by the U.S. Chamber of Commerce’s 21st Century Energy Institute says the extraction of “unconventional” shale oil and gas through horizontal hydraulic fracturing – or fracking – has meant a job boom even in states that don’t actually have shale deposits, with 1.7 million jobs already created and a total of 3.5 million projected by 2035. Counties with more than 200 wells added jobs at a 7 percent annual rate over the same time period.

Data from the Illinois state government show that 27,954 jobs were added between 2007 and 2011, a 35.9 percent increase in jobs for the region. Average annual wages for all jobs in the region increased by 53.1 percent between 2007 and 2011.

Road maintenance alone will cost communities up to $375 million, according to a draft report by the state Department of Transportation, since each well generates about 4,000 extra heavy truck trips. Many local officials and businesspeople warn that fracking will erode New York's all-important tourism sector, by "creating an industrial landscape that far outlives the profitability of gas extraction." Studies show that drill-friendly communities do worse than others in personal income, employment growth, economic diversity, educational attainment, and ability to attract investment. Then there are the risks to private property and real estate. Several major national lenders refuse to grant mortgages to homeowners with gas leases; fracking puts as much as $670 billion in secondary mortgage debt at risk.

Not only does fracking itself hurt the economy, but also the side effects, water contamination and diseases, cost money.

Cleanup of drinking water contamination is so expensive that it is rarely even attempted. In Dimock, Pennsylvania, Cabot Oil & Gas reported having spent $109,000 on systems to remove methane from well water for 14 local households, while in Colorado, cleanup of an underground gas seep has been ongoing for eight years at a cost of hundreds of thousands of dollars, if not more.

The provision of temporary replacement water supplies is also expensive. Cabot Oil & Gas reported having spent at least $193,000 on replacement water for homes with contaminated water in Dimock, Pennsylvania.

Fracking can also pollute drinking water sources for major municipal systems, increasing water treatment costs. If fracking were to degrade the New York City watershed with sediment or other pollution, construction of a filtration plant would cost approximately $6 billion.

Now onto diseases, silicosis is one of a family of dust-induced occupational ailments that imposed $50 million medical care costs in the United States in 2007.

Air pollution from gas drilling in Arkansas’ Fayetteville Shale region imposed estimated public health costs of more than $10 million in 2008.

Fracking can affect the value of nearby homes. A 2010 study in Texas concluded that houses valued at more than $250,000 and within 1,000 feet of a well site saw their values decrease by 3 to 14 percent.

Fracking has several negative impacts on farms, including the loss of livestock due to exposure to spills of fracking wastewater, increased difficulty in obtaining water supplies for farming, and potential conflicts with organic agriculture. In Pennsylvania, the five counties with the heaviest Marcellus Shale drilling activity saw an 18.5 percent reduction in milk production between 2007 and 2010.

According to a recent analysis prepared by the Western Energy Alliance and the Independent Petroleum Association of America, the annual cost of complying with the proposed Bureau of Land Management rules would exceed $345 million, or $97,000 per well, in the western states alone.

In December of 2010 in Washington County, Pennsylvania, the town has recorded 109 earthquakes since they opened up hydraulic fracturing in their area. The practice of hydraulic fracturing causes earthquakes, both the U.S. Army and the U.S. Geological Survey have concluded, because until two years ago Oklahoma typically had about 50 earthquakes a year, but in 2010, 1,047 quakes shook the state, because there was an increase in hydraulic fracturing wells. In fact, 181 more wells were added, causing seismic activity.

A study published today in the Proceedings of the National Academy of Sciences finds a correlation between dozens of earthquakes in Texas’ Barnett Shale region—the site of intensive hydraulic fracturing activity—and the locations of the wells.  

A study, by Won-Young Kim,a professor at Columbia University, found that in a single year, 167 distinct earthquakes occurred in and around the town of Youngstown, Ohio. All of these were caused by just one wastewater injection well. It stored, over its life, nearly half a million barrels of the wastewater , which includes thickeners, drilling lubricants, and saltwater that are forced to the surface of the earth by the fracking process.

Oklahoma, for instance, had the state's largest-ever earthquake, a 5.7, emanated from a dead fault line reawakened by hydraulic fracturing. Seventeen states felt that quake, in late 2011, which ripped open clefts in the road and was followed by a 4.7 aftershock.

The Geology study estimates that during the last four years, the number of earthquakes in the middle of the U.S. was 11 times higher than the average rate over the previous 30 years.