Unnatural Gas: How Government Made Fracking Profitable [View all]

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from Dissent magazine:


Unnatural Gas: How Government Made Fracking Profitable (and Left Renewables Behind)
By J. Mijin Cha - June 27, 2013


In his much-anticipated speech on climate change, President Obama proposed smart, modest policies that would help decrease greenhouse gas emissions through support for renewable energy development and increased energy efficiency measures, prepare the country for the climate change that is already occurring, and lead international climate efforts, including phasing out fossil fuel subsides and stopping funding for new coal plants overseas. While he stopped short of proposing anything groundbreaking, such as a carbon tax, the measures would be an improvement over the current climate stalemate.

Yet the president’s continued embrace of natural gas development threatens to counteract any of his proposed climate initiatives. In the speech, Obama continuously mentioned that we are the leading producer of natural gas and proposed advancing production of oil and gas in the Bakken formation (a rock formation beneath parts of Montana, North Dakota, and Canada)—code words for expanding hydraulic fracturing, or fracking, operations. Unfortunately, fracking is not the energy panacea its supporters claim it is. The environmentally destructive nature of the process negates any net greenhouse gas benefit from natural gas. Estimates of the amount of available gas that can be tapped economically widely vary, as highlighted in Timothy Mitchell’s article in Dissent. And while fracking may release deposits of oil and gas that were previously unavailable, there will ultimately still come a time when the finite fossil fuel resources run out.

Moreover, it is only after decades of development and government support that fracking operations are now seen as cost-effective. In contrast, the support for developing renewables has been erratic and only a fraction of that given to fossil fuel industries. Renewable energy sources are often dismissed as expensive and incapable of meeting the country’s energy demands. Yet looking at the history of energy development, it is clear that political and corporate interests deliberately impeded the development and expansion of renewable energy. Fracking is a clear example of how direct government research and consistent support turned an impractical, expensive process into one that is now seen as the key to domestic energy independence.

The Role of Federal Support in Fracking

Oil and gas companies are extremely profitable and have been for several decades. Yet much of their current success was the result of not just favorable tax incentives and subsidies but also direct federal research. Federal energy subsidies began in 1916 and focused almost exclusively on increasing the production of domestic oil and gas until the 1970s. Over the following three decades, the Department of Energy invested roughly $137 million in direct gas research, in addition to federal tax credits for drillers that totaled $10 billion between 1980 and 2002. .............(more)

The complete piece is at: http://www.dissentmagazine.org/online_articles/unnatural-gas-how-government-made-fracking-profitable-and-left-renewables-behind