Fracking and Local Economies

 

Tony Vanetik Fracking

Despite having its roots in US energy production dating back to the early 1900s, fracking has long been looked at as an unconventional and perhaps temporary means of producing natural gas and oil within the United States.

I’ve written in the past on TonyVanetik.com about how fracking was conceived and how the process actually plays out, disspelling some of the fears around the process of collecting oil and gas within the United States. For at least 65 years, it has been used in a commercial capacity, helping to reduce the United States’ dependence on foreign oils and spur on the surge in domestic energy production. While the process does present environmental concerns when done at enormously high volumes, fracking has allowed for tremendous increases in US energy, revolutionizing the energy industry as a whole.

Fracking has reduced the cost of energy production hugely across the nation–the so called fracking revolution has caused gas prices to drop by about 47% according to Brookings. Fracking wells as a whole produced the good majority of US natural gas across the nation–two third according to the Energy Information Association.

In short, the fracking boom has hugely influenced the US economy and energy production. Few people will debate the large-scale economic benefits of increasing nationwide fracking, environmental concerns aside. But how does fracking affect local economies?

Even in scenarios in which the national economy is bouncing back or doing well at large, there are always struggling local economies. Without a booming populous or a bustling business center, some small cities and towns struggle to keep themselves afloat. Fracking, though, in areas in which shale is a valuable resource, can be the answer.

According to two Duke energy experts who studied the matter, fracking’s local benefits are enormous and unparalleled. The local government in Weld County, home to the largest shale deposit in Colorado, has brought in $110 million in property tax revenue since the shale boom. This money, combined with severance tax allocations from the government has allowed Weld County to put millions back into the school system, strengthen the police and local businesses, and rebuild roads within the county.

Weld County isn’t an exception either, similar benefits in local economies have been recognized almost universally where fracking is found. With the continued pressure to strive for energy independence within the United States, fracking is likely here to stay, much to the benefit of the economy at both the micro and macro levels.

How Tech is Changing Oil and Gas

No one in their right mind would dare say that technology hasn’t changed the way we’ve lived in recent years. Everything around us, from the homes we live in to the watches on our wrists, have been profoundly affected by technological advances. Even the cars we drive have found themselves with new pieces of tech both inside and out, changing everything from our navigation systems to the fuel efficiency of cars both large and compact.

The fuel efficiency of our cars has been rising for years, according to the Washington Post, the cars we drive now are more fuel-efficient than they ever have been previously. Some have reached the point of not needing fuel at all, as electric vehicles have begun to become more and more common on the roads around us.

And that could lead to an oil crisis, at least according to Bloomberg. With battery prices dropping seemingly every year, and new scientific advances leading to more advanced battery technology, electric vehicles (EVs) are primed to begin making the transition from high-end luxury purchase to something that just about everyone can afford, regardless of status.

“By 2040, long-range electric cars will cost less than $22,000 (in today’s dollars), according to the projections. Thirty-five percent of new cars worldwide will have a plug,” says Bloomberg.

Whether or not EVs actually cause the need for oil to drop enough to cause a crisis similar to the one we experience in 2014 is yet to be determined. It will largely depend on how low (or high) prices remain in the next few decades when electric vehicles insert their way into the market for more and more people. Low prices, combined with the need for developing countries to continuously depend on foreign oil could have a considerable impact on the prediction that Bloomberg made.

Technology, though, isn’t worth paying attention to simply due to electric cars for oil and gas. As new technologies are developed that wind up lessening our dependence on oil, new technologies also emerge that increase oil and gas outputs more efficiently. Fracking, for example, has caused the price of US natural gas, which has historically been similar to oil, to plummet as the means of gathering it become easier.

 

How Fracking is Revolutionizing US Energy

A hot-button subject during presidential debates not only this primary season, but during every US election year in the last few centuries has been our dependance on foreign oil. This is, of course, because of the ever-fluctuating price of oil from Middle-East members of OPEC and our dependance as a nation on oil as an energy source. Now hydraulic fracturing or “fracking” is taking the front seat as a debated subject and a means of self sufficiency for US energy.

By 1989, the United State’s dependence on foreign oil was at 47. By 2006, oil imports peaked at 60 percent. Since then, however, the United States has begun to slowly but surely wriggle free from the clutches of its dependance on foreign oil as a means of energy, capped off by President Obama’s pushes to “free ourselves from foreign oil” in 2012.

Currently, our dependance on foreign oils continues to drop since its peak in the mid 2000s. Partially to thank for this is fracking.

Hydraulic fracturing may be the answer to the United States becoming completely energy self-sufficient in the next few decades. The process is fairly straightforward and has been refined and improved over time, eventually rising to the point of being the most efficient means of collecting natural gas in existence.

To start the process, a large drill bores its way into the earth over a natural gas deposit. From there, a pressurized liquid is injected into the rock, fracturing it and allowing the natural gas contained within it to be released. Though the process started with mostly vertical drilling processes, recent exploration of horizontal drilling has allowed fracking to capture an even higher amount of natural gas, thereby increasing the overall productivity and efficiency of the project.

The liquid injected in the process involves several different agents, typically a mixture of sand, water and chemicals. The sand is useful in holding the fissures open after the pressure has been released, allowing more gas to leak out and be collected.

Fracking is hardly a new technology, as its roots can be traced back as far as the early 1900s. The first commercial fracking processes came into existence around 1940 and were explored and studied thoroughly. Despite getting its start decades ago, fracking has only in recent years become as efficient and widely-applicable as it is now.

High oil prices from Saudi Arabia and the rest of OPEC played a large part in the fracking boom in the US in recent years. Now, other parts of the world, including the UK are opening their collective minds to the idea of fracking as a means of switching to natural gas & self-sufficiency.

Recently, the process was approved in the UK for the first time since 2011. This may seem like small news to some, but it’s a key indicator that the world as a whole has taken notice of the advantages that fracking can have on a country, its economy and its efficiency.