American ingenuity: Fracking serves America and degrades our enemies…
(CUSA) – Despite evidence-free claims of groundwater contamination which even the EPA can’t find, using God’s gift of creation for the betterment of humanity is precisely what we are commanded to do. It turns out that fracking even reduces CO2 emissions. That should make every anti-fracking protestor happy, right? It will also work to reduce terrorism.
Dennis Lohouse offers his opinion on the issue and how free markets with minimal regulation encourage prosperity and human flourishing. —Ed.
DENNIS LOHOUSE, CFA—
American ingenuity trumps again!
One of my favorite headlines from the last two years is from an article that appeared in the January 6, 2014 edition of CNSNews, “Saudi Billionaire Prince: Fracking Competitively Threatens ‘Any Oil Producing Country in the World.’”
The worried prince is reacting to the fact that the United States has now become the largest producer of natural gas in the world and is expected to see its crude oil production exceed that of Saudi Arabia and Russia in 2015 (Energy Information Administration).
Hydraulic Fracturing (“fracking” for short) is a technique developed in the 1949’s for increasing oil well flow by injecting fluid into the well pipe under high pressure to fracture the rock which contains oil, gas and brine.
The fluid contains various chemicals and grains of substances such as sand or aluminum oxide which hold open the cracks once the pressure is removed. This stimulation can be used on new wells and old wells than need revitalizing.
There is certainly controversy around this practice – concerns include ground water contamination, earthquake generation, as well as noise and surface pollution. Some states, such as New York, have yet to approve the practice while some countries have banned the it all together.
Despite the controversy, fracking has made American drilling far more productive and is solving one of our most urgent economic and political problems – energy independence. To the extent that the US replaces “friends” such as Saudi Arabia and unfriendly producers like Russia, as the dominant producer, we strengthen our hand in dealing with geopolitical issues, particularly in the Middle East.
The organization of Petroleum exporting Countries (OPEC) has lost much of its influence on crude markets since there are now two more swing producers: Russia and the United States. While the Russians may continue to align with OPEC the U.S. can counter restricted production.
Likewise, pressure on world oil prices reduces the income to our enemies, depriving them of much needed foreign currency. Mr. Putin is likely to think more carefully about his next adventures knowing that his cash reserves are being depleted at these prices.
This explosion of productivity has also provided a boost to the American economy by putting billions of dollars into consumers’ pockets. A dollar not paid for fuel is a dollar available for consumption or saving.
Once again American industrial ingenuity has risen to the challenges of global markets and has devised a more effective way to produce oil and gas. Interestingly, most of the new production has come from private lands since the Federal Government has been less than enthusiastic about supporting enhanced production of our reserves.
Free markets, modulated by regulation have shown over and that the needs of customers can be met, given the knowhow and creativity of our companies.