What the Frack?
Guest post by Max Campo
How important is fracking to the economy?
If you followed the news in the last year or so, you might have noticed the increased discussion on fracking and discussion on whether or not environmental policy would seek to ban it in the coming years.
Fracking without a doubt is damaging to the environment and public health (1). Numerous public health risks are presented by fracking, coupled with long-term damage to the environment, which paints an ugly picture that makes you wonder where exactly the country went that reacted so strongly to Silent Spring. Regardless, that never stopped fracking advocates from claiming that the benefits to the economy through the jobs it produces and the reduced cost of oil in the United States outweighed the cons.
The Business of Fracking
Some companies like Shell, who have announced plans to reduce their refinery portfolio by half (2), have begun to shift away from oil and gas and move towards renewable energy production to reduce greenhouse gas emissions in the long term. Moves like this are contrasted heavily by those still pushing for continued fracking in the United States. While some companies register that the practices are not sustainable and in the long term, they will spell the death of their business, others do not seem to care.
In the last year, several glaring issues on the economic front of fracking have arisen. In the state of Pennsylvania, a state where fracking is prevalent, fracking reportedly produces about 26,000 jobs (3). A 2020 article by the New York Times points out that several investment companies have pulled out of fracking in Pennsylvania due to reduced returns to justify their investment (4). Despite diminishing returns jeopardizing the concerning the industry, the Greene Country commissioner was not worried about the future of the finite resource, stating that the future bust predicted 40-60 years down the road was “past our lifetimes”. Apparently as a result of that, not their problem.
While these oil towns that are born out of the fracking industry may have thrived in past years, the idea that they will continue to do so remains questionable. The oil and gas industry suffered great losses in the last year, reportedly losing over 100,000 jobs in 2020 (5). The same report stated that despite a resurgence in demand for oil and gas brought on by the decline of COVID in the United States, an estimated 70% of jobs would not return to the industry by the end of 2021.
A Better Path?
Instead of pouring more money and resources into supporting the fracking industry, which evidently is limited in its lifespan, investments would be better spent towards renewable energy development, which will not be constrained by finite resources and poses considerably less risk to public health and the environment. Declining jobs in the oil and gas industry despite having high oil prices do not spell good things for the future of the industry.