Fracking comes with risks, but it can benefit the economy — and the environment

Fracking comes with risks, but it can benefit the economy — and the environment
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The United States has — or will soon — surpass its record high in crude oil production.

For only two previous months in its history, late in 1970, did domestic producers pull more than 10 million barrels of oil from the rock formations which — for much of the 20th Century — made the U.S. the world’s largest producer of oil. But it’s about to happen again, and most experts expect growth to continue.

Over roughly the last decade, a suite of innovations have been applied to shale and other “tight” rock formations, including high-volume hydraulic fracturing (better known as “fracking”), precise horizontal drilling, and other technologies which together have led to the “shale revolution,” making the United States once again the world’s largest producer of hydrocarbons. 

Supporters and opponents of fracking relentlessly debate the benefits and risks of these new technologies. Unfortunately, partisans of both sides of the debate often exaggerate the research that supports their view while ignoring evidence that cuts against it.


In reality, the shale revolution offers a mix of risks and benefits. But more importantly, it offers up a suite of opportunities which can strengthen local communities, improve public health, and even combat climate change — if policymakers, companies and the public take well-informed actions

Managing risk, seizing opportunity

Consider the health effects of shale development. Several studies have offered fairly compelling — though not definitive — evidence that there may be health risks of living in close proximity (about half a mile) to a shale well. At the same time, low-cost supplies of natural gas have displaced coal-fired electricity, reducing emissions of particulate matter, mercury, and other pollutants that contribute to tens of thousands of premature deaths each year.

Smart policy and responsible development can enhance these benefits by ensuring wells are not drilled too close to homes and by requiring companies to capture the most dangerous gases (such as volatile organic compounds) that flow to the surface during their operations. At the state and federal level, policymakers can further improve air quality by encouraging more displacement of coal by natural gas and along with nuclear, wind, and solar power.

The economic impacts of the shale revolution follow similar contours. Having visited every major oil and gas play in the United States over the last five years, I can say with certainty that growth in this development has transformed dozens of communities from Williston, North Dakota to Cotulla, Texas. These cities and many others like them have been supercharged by investment in the oil and gas sector, providing new employment opportunities, windfall royalty revenue for landowners, increased funding for schools and local governments, and more.

But the oil and gas industry is famously volatile. Repeated booms and busts in regions without a diversified economy can do long-term damage to productivity in other sectors. Just ask residents of Midland, Texas, who have seen multiple cycles of boom-bust, and where a common bumper sticker reads: “Dear Lord, Give me just one more oil boom. I promise not to piss it away this time.”

For Midland and other beneficiaries of the shale revolution, the near-term economic benefits are to be celebrated. At the same time, today is the day to identify other economic sectors that can thrive alongside the oil and gas industry, boosting economic diversification and protecting against volatility.

A climate opportunity

Perhaps the largest opportunity brought about by the shale revolution is also the most counterintuitive. How could a boom in oil and gas production offer an opportunity to reduce greenhouse gas emissions? The answer lies again in the displacement of coal-fired electric power.

In 2016, U.S. carbon dioxide emissions were at their lowest levels since the early 1990s, and the displacement of coal by low-cost natural gas has been the primary driver. But coal still provides roughly 30 percent of domestic electricity, and policies that encourage switching from coal to natural gas, nuclear, and renewables would drive emissions down further. The availability of low-cost natural gas, along with continued cost reductions in wind and solar, makes these policies easier and less costly to implement.

But over the longer term, multiple studies have shown that lower oil and gas prices brought about by the shale revolution also encourage people to use more energy, which increases emissions. What’s more, emissions of methane, which is the primary component of natural gas and also a potent greenhouse gas, reduce the climate benefits of switching from coal to gas.

Some states such as Colorado, California, and Pennsylvania have implemented policies to reduce methane emissions, and many companies have taken voluntary measures to do the same.

But to take full advantage of the shale revolution’s climate opportunity will require smart policies at the federal level — ideally, a steadily rising price on carbon emissions, coupled with investments in R&D for the energy technologies of the future.

Fracking has provided enormous opportunities for hundreds of communities, the nation as a whole, and the international community’s efforts to tackle climate change. Seizing those opportunities will require policymakers at multiple levels to understand the complex mix of benefits and risks these technologies provide. Then, they need to act.

Daniel Raimi is a senior research associate at Resources for the Future. He teaches energy policy at the Gerald R. Ford School of Public Policy at the University of Michigan and is a faculty affiliate with the University of Michigan Energy Institute. He is the author of the new book, “The Fracking Debate: The Risks, Benefits, and Uncertainties of the Shale Revolution.”