U.S. fracking industry deserves our gratitude
Fewer than 10 years ago, America’s energy future looked bleak.
World oil prices in 2008 spiked to more than $100 per barrel of crude.
Peak oil — the theory that the world had already extracted more crude oil than was still left in the ground — was America’s supposed bleak fate. Ten years ago, rising gas prices, spiraling trade deficits and ongoing war in the Middle East only underscored America’s precarious dependence on foreign sources of oil.
Despite news of a radically improved but relatively old technology called “fracking” — drilling into shale rock and injecting water, sand and chemicals at high pressure to create seams from which petroleum and natural gas are released — few saw much hope.
In 2012, when gas prices were hitting $4 a gallon in some areas, President Obama admonished the country that we “can’t just drill our way to lower gas prices.” That was a putdown of former Alaska governor Sarah Palin’s refrain, “Drill, baby, drill.” Obama barred new oil and gas permits on federal lands.
But over the last five years, frackers have refined their craft on private properties, finding ever cheaper and more efficient ways to extract huge amounts of crude oil and natural gas.
In 2017, America is close to reaching 10 million barrels of crude oil production per day, the highest level in the nation’s history. The U.S. soon might surpass Saudi Arabia as the world’s largest petroleum producer.
When American natural gas (about 20 percent of the world total) and coal (the largest reserves in the world) are factored into the fossil fuel equation, the U.S. is already the largest producer of energy in the world.
While environmentalists worry about polluting the water table and heightening seismic activity, fracking seems to become more environmentally sensitive each year.
When OPEC and other overseas producers tried to bankrupt frackers by flooding the world with their oil, the effort backfired. American entrepreneurs learned to frack oil and natural gas even more cheaply. From 2014 to 2016, fracking helped cut the price of gasoline by $1.50 a gallon.
Fracking and cheaper gas are allowing a critical breathing space for strapped American consumers, as alternative energy production slowly becomes more efficient and competitive.
Fracking has created a national savings of about five million barrels of imported oil per day over the last decade, for $100 billion in annual savings. It has allowed the U.S. to enjoy some of the lowest electricity rates and gas prices in the industrial world.
The result is that cheap energy costs are luring all sorts of energy-intensive industries — from aluminum to plastics to fertilizers — back to the United States.
Fracking has given America virtual energy independence. It has reduced oil prices and radically weakened America’s rivals and enemies. Desperate oil exporters like Iran, Russia and Venezuela are short about half the oil income that they enjoyed 10 years ago.
The once-feared OPEC oil cartel, the long-time bane of the United States, is now nearly impotent.
Friends such as Israel have gained energy independence by fracking. In contrast, some European allies who have banned fracking out of environmental worries are more vulnerable to Russian and Middle Eastern pressure than ever before.
Fracking is not easy. It requires legally protected property and mineral rights, a natural entrepreneurial spirit, environmental concern and a free-market. In other words, it is an American way of doing business.