Fracking accounts for close to 50 percent of all natural gas and oil production. Our production of natural gas from shale fields and tight gas has increased by 40 billion cubic feet per day since 2002. Our production of shale and tight oil from fracking has increased by 4 million barrels a day since 2002.
Fracking is one of the main reasons why oil and natural gas prices are so low. That also makes it one of the main reasons why gasoline and diesel prices are so low, and electricity prices have dropped in many areas. Crude oil is the feedstock for gasoline production. Natural gas is an increasing source of the fuel used to power our electricity generation stations nationwide.
Natural gas has been taking the place of coal in electricity production. Natural gas produces about one-half the CO2 as coal does in electricity generation. There is an environmental plus to moving from coal to natural gas in electricity generation.
If we stopped fracking in the U.S. natural gas would become far more expensive. More coal plants would be developed given that coal would then become a far cheaper source of fuel. So by stopping fracking we may make the environment worse. Also, electricity would become more expensive.
We are now exporting liquefied natural gas (LNG). Many LNG import facilities have been, are and will be converted to export facilities. Our net trade of pipeline gas with Canada and Mexico has also greatly improved due to fracking-base unconventional natural gas production in our country.
We are now often the largest producer of natural gas in the world – often beating the Russians at their own natural gas production game. Our exports of LNG can help our allies in Asia, most particularly Japan, and Europe become more energy secure. Our European allies can become less reliant on Russia gas, and will hence be less under the Russian thumb, because we can send LNG their way.
We are beginning to export oil. For many years a large proportion of our trade deficit was due to importing crude oil. We have reduced that import bill massively by producing more oil in our country – and importing less oil. We are now more oil secure than at any time in our recent past. Our exports of oil can also help Asian allies like Japan and many countries in Europe become more energy secure.
These are amazing positive changes in a very short time period. We should also be grateful that shale oil and shale gas helped dig us out of the 2008 “Great Recession” with jobs growth and the reduction in the cost of energy – and hence drops in the prices of things that use that energy to be made, transported and more.
With proper regulations and controls the potential environmental impacts of fracking can be controlled. The industry knows this and many in the industry are demading proper regulation to keep the amateurs out who could ruin the whole business with mistakes. .
What if we stopped fracking tomorrow? We would lose massive amounts of jobs, investments, oil, gas, and more (both the actual today and the huge potential ones in the future). Import costs would go up. Export revenues would go down. Inflation would go up. The economy would go down. Unemployment would go up. Standards of living would go down. Energy price shocks cause economic downturns. Stopping fracking would cause one of the biggest energy shocks in the recent past.
Who wants that?
Sullivan is professor of Economics at the National Defense University and adjunct professor of Security Studies at Georgetown. All opinions expressed are his alone.