The Wonkblog CrowdSourced discussion of how the cheaper natural gas being made available through fracking and other technologies will affect U.S. business and the economy. Visit the discussion here and leave your own comment, or upvote those that you find most compelling. In the meantime, here's some of what Wonkblog readers are saying. (Minor spelling and grammatical fixes have been made to the reader comments excerpted here).
Writes reader "Ole_15"
The rise of hydraulic fracturing will dramatically cut domestic energy prices, reduce dependency on foreign oil, and maybe even create a 'jobs boom' in rural and Rust Belt states that need jobs. It can transform our economy and be used as a transition fuel to entirely-renewable sources.
However, this does not come without a cost, like all benefits. Fracking pollutes groundwater, causes earthquakes, destroys natural ecosystems, and still empties methane into the atmosphere. Methane is 100 times more effective at trapping heat in the atmosphere than carbon dioxide. Then you're risking spills, leaks, and all the problems of piping around natural gas. We shouldn't understate the problem of groundwater pollution either, it is a serious problem (See Gasland 1 and 2).
Reader "David Ke" raises an interesting point about the risk of "Dutch Disease," the phenomenon in which countries that produce large amounts of natural resources have a resulting rise in the value of their currencies, which in turn makes exporters less competitive, hurting job creation.
Dutch disease will rear its ugly head as oil imports steadily give way to natural gas exports. The U.S. Dollar will appreciate, rendering manufacturing exports less competitive. Resource extraction has long been a capital-intensive (aka not labor-intensive) industry, whereas manufacturing requires a larger amount of R&D workers, salespeople, service people, etc. This is why the discovery of oil in the North Sea produced unexpected consequences for The Netherlands. Perhaps the decline in competitiveness for manufacturers will be offset by American natural gas companies who export their expertise and equipment as the fracking boom goes global. That would indeed be a welcome development. Cheaper domestic energy may even give our chemical industry a competitive edge, in the short run. That is, before we begin exporting LNG and other countries start developing their own shale gas resources.
Reader "sanjait" thinks that some commentary on these issues overstates the likely consequences of the shale gas boom.
A big mistake would be to overestimate the impact of the natural gas boom on the US economy.
What shale gas does, primarily, is displace coal. So coal jobs are lost, coal plants are shut, and they are replaced by jobs in fracking and natural gas generation plants. This produces a nice surplus for US power consumers and has some great environmental benefits at the margins ...
But that's about it. The thing to keep in mind is that current very low gas prices are the result of a rush of suppliers into the market to pick all the low hanging fruit. Shale gas wells have a very rapid decline rate though, so the production rates and capacity set up today won't last and each successive year the cost of supply will get a bit more expensive (barring significant technological advancement, which is admittedly tough to predict).
And reader "TheProspector" sees a push beyond the Midwest for new pipelines to enable gas availability in the Northeast--with a bit of celebrity blowback accompanying.
I think there will be more pressure for additional pipelines, especially to move gas into New England. The use of gas rather than oil for heat has the ability to free up tremendous amounts of dollars for each homeowner who makes the switch. That switch will often be predicated upon getting gas into the areas where the demand for cheaper heating fuel exists. Watch for Yoko Ono, Josh Fox, and Mark Ruffalo to try to block the flow of gas in order to prevent people from using "fracked" gas -- which is, of course, just a terrible way for other people to save money.
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