April 12, 2017 at 5:00 am ET
This year, oil production in America is expected to reach an all-time high, close to 9.5 million barrels a day. Similarly, natural gas output is projected to reach a record 75 billion cubic feet per day by the end of 2017.
What a difference a decade makes. Ten years ago, when we thought we were running out of oil and gas, imports were nearly two-thirds of consumption. Today, imports are down to 45 percent of oil use with less than a third coming from OPEC countries. What’s more, the U.S. is now exporting more than one million barrels of oil per day and is on track to become a net exporter of natural gas this year. Indeed, America has now achieved de facto “energy independence,” a goal espoused by every president since Richard Nixon.
This reversal of fortune can be attributed to American entrepreneurial ingenuity, in particular the application of hydraulic fracturing and horizontal drilling to tease hydrocarbons out of shale and other hard rock minerals. In the process, thousands of new jobs have been created while state and local government tax coffers in producing regions have grown in tandem.
How ironic, then, that Vermont, New York and Maryland have imposed statewide bans on hydraulic fracturing. (By contrast, the Florida Legislature just killed an anti-fracking bill.) Though Vermont has no hydrocarbon resources, substantial reserves have been identified in shale formations along the southern tier of New York and in western Maryland, both economically distressed regions that have been losing people and jobs for decades. The fracking bans serve only to limit opportunities for job growth and economic diversification while depriving local governments and public schools of much needed revenues.
Opponents of fracking continue to claim that the process can contaminate ground water, pollute the air, and precipitate earthquakes while depressing property values. None of these claims is true. Hydraulic fracturing has been used to complete more than 1.5 million oil and gas wells over the past 60 years. Comprehensive studies by the Environmental Protection Agency and Duke University researchers have concluded that fracking poses no credible threat to drinking water or air quality.
As for earthquakes, scientists at Stanford University and Southern Methodist University have demonstrated that seismic activity near drilling operations is not due to fracking but may be related to the disposal of waste water in deep rock formations close to natural faults. If so, the remedy is either to recycle the waste water or inject it into wells away from fault zones, not to ban fracking. And rather than depress property values, hydrocarbon production in shale plays has dramatically boosted valuations as reserves and equipment have been added to the tax base.
New York, in particular, could surely use the cheap natural gas waiting to be tapped along its southern tier. Not only would production extend an economic lifeline to many depressed communities, but this abundant and inexpensive gas supply could be used to replace the power generation that will be lost when the Indian Point nuclear plant is shuttered. What’s more, using the state’s own natural gas would be a much cheaper alternative for New Yorkers than importing hydropower from Quebec.
America is becoming a major player in global energy markets, thereby strengthening our nation’s economic security. Fracking bans deny many depressed areas the opportunity to participate in this energy revolution, with all the attendant economic and fiscal benefits, while inflating electric power costs for residents statewide.
Bernard L. Weinstein is associate director of the Maguire Energy Institute and an adjunct professor of business economics in the Cox School of Business at Southern Methodist University in Dallas.
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