Fracking in the US: Standpoints, balance of trade and contribution to the country’s GDP

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Table of contents

1.        What is fracking?        2

2.        Points of view about hydraulic fracturing        3

2.1        Supporters of hydraulic fracturing        3

2.2        Detractors of hydraulic fracturing        4

3.        Production of natural gas and balance of trade        6

4.        COntribution to the country’s GDP        8

5.        Conclusions        9

6.        REferences        11

1. What is fracking?

Fracking, also known as hydraulic fracturing, is a technique to extract fossil fuels, being them shale oil and shale gas, from the subsoil.

The technique goes as follows. A long vertical hole is created with a wellbore and it drills down thru layers of sediments. When the drill reaches its “kickoff” point, at around 2500-3000 meters down, it turns a 90º angle and starts drilling horizontally for about 1500 m. Then a perforating gun is introduced until the end of the tunnel and fired, creating small holes (of about an inch long) that burst through the well’s casing into the rock layer. A couple of months later, fracking fluid (made with 90% water and chemical additives like acids to dissolve minerals, slick water and disinfectant and with proportions varying depending on the fracking site) is pumped down into the well at a very high pressure, cracking the shale rock and creating fractures that will release the trapped oil and gas.

According to the National Conference of State Legislators, in the US, fracking is regulated by a patchwork of state and local legislation, At the federal level, fracking is exempt from some of the requirements of the Safe Drinking Water Act, particularly the requirement to disclose the chemicals used in well injections (with the exception of Texas, Michigan and Wyoming).

Many countries have shale oil and shale gas resources, but due to environmental regulations or a lack of infrastructure and water supply they are not utilizing this technology. The US is, by far, the country that has been using hydraulic fracturing the most.

From now on, the paper will focus on shale gas but also giving some details on shale oil.

1. Points of view about hydraulic fracturing

1. Supporters of hydraulic fracturing

Those in favor of fracking say that it will help meeting US natural gas needs for many decades. They remark that it will help the country by providing electricity, powering vehicles and heating houses for many years.

Many also believe that it is a clean and safe technique. They claim that fracking plants emits much less pollutants than coal-plants and that during combustion it is also cleaner, emitting lower levels of carbon and mercury.  

At the beginning of this century there were around 270,000 natural gas wells in the country. Ten years later that amount doubled, and every year 13,000 wells are drilled. That is why those that defend this technology argue that it has created may jobs opportunities, many times in poor and unfavourable areas where before there was no economic strength and thanks to wells being built new jobs have been created for locals.

Those in favour also say that the federal government is collecting incredibly high amounts of money thanks to the taxes involving this technique. According to the report America’s New Energy Future: the Unconventional Oil and Gas Revolution and the U.S. Economy, between 2012 and 2025, the amount of money paid by hydraulic fracturing companies in taxes will be over $1.4 trillion. This only includes the natural gas producing companies. Industries related to fracking are likely to contribute over $200 million in taxes.

Research and development to find cleaner and more efficient ways of fracking is another argument for those in favor of this technology. They believe this besides creating more jobs it also means investing a lot of money in activities like 3D and 4D seismic imaging, which could be applied to other industries. A very relevant area of R&D tackled by natural gas companies is liquefying this gas. The volume of gas is reduced 260 times when it is liquid rather than in its gaseous state, which makes it way easier to be transported.

Those defending fracking will say that thanks to the increase in production, the country will not just be able to supply the whole country’s demand of natural gas but also to export to other countries for many decades, making the country’s economy stronger and creating a more beneficial balance of trade. Further on, the export of natural gas will be discussed. This ability for the US to become much more independent will benefit the country by reducing its dependence with the Middle East, a very political unstable area. This will mean a less dependence on fluctuations in the price of oil and gas.  

1. Detractors of hydraulic fracturing  

Those against this technology argue that it causes a huge impact on local water supply. A fracking well uses from 3 to 6 million gallons (11 to 22 million liters). Although this activity doesn’t use as much water as other activities like power plants or agriculture, it has been very criticized by towns that have experienced a water shortage due to new wells placed next to their homes.  

Another issue related with water is the disposal of it. Along with the trapped gas that is pumped up, millions of liters of liquid that contains heavy metals, radioactive particles and hydrocarbons. The storage and disposal of this liquid is usually done in pits or holes (like pools) on-site or off-site, in water treatment plants. The liquid may also be recycled, but this process can increase levels of contamination, as this water gets more and more toxic with each use. Even though wells are encased in cement and steel to avoid contaminants from seeping into groundwater, any accident or negligence related to fracking may have disastrous effects. An inadequate disposal of this toxic substance or any leakage can highly contaminate drinking water around fracking sites. Since many wells are located very close to small towns, it means that people can be poisoned. Besides that, millions of gallons of contaminated water are dumped into the oceans, severely affecting the marine life.  

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