Fracking and the Presidential Election: Drilling for Jobs

October 15, 2012 Print

On November 6, the U.S. presidential election will be decided in nine swing states: Virginia, Florida, Ohio, Wisconsin, Nevada, Colorado, Iowa, New Hampshire, and North Carolina, representing a crucial number of the necessary 270 Electoral College votes.  The outcome in these swing states is still too close to predict.  Other states, like Pennsylvania, considered a swing state in previous elections, are more certain (Pennsylania will likely vote for President Obama). Six swing (or near-swing) states are home to natural gas reserves—Colorado, Virginia, Ohio, Wisconsin, Pennsylvania, and Iowa—of which most are shale gas. Buried deep in the earth, shale gas reserves are not recoverable with conventional methods but are extracted by hydraulic fracturing, or “fracking.” During the process, fracking fluids (usually a mixture of water, sand, and chemicals) are injected into the shale gas plays, creating new fissures in the rock that allow natural gas to be extracted from rock pores in which it had previously been trapped.  Although the U.S. government is trying to learn more about the chemicals used in the process, the precise components remain a mystery. Furthermore, researchers and analysts still know very little about the climate footprint (particularly about the release of methane), the impact of noise pollution, potential to cause seismic activities, and possible risks of air and groundwater pollution.

The development of fracking as a new technology created a boom in natural gas production in the United States. Shale gas production rapidly increased from about 0.2 trillion cubic feet in 2000 to about 4.3 trillion cubic feet in 2010.[1] Development of new gas fields is considered promising, particularly in the fields of the Marcellus shale, located in New York, Pennsylvania, Maryland, Virginia, and Ohio. The U.S. Energy Information Administration (EIA) projects that shale gas will make up 49 percent of natural gas produced in the U.S. by 2035.[2]

Fracking in the U.S. – A Job Creation Miracle?

Proponents of shale gas tout the job creation potential of this revitalized industry. States such as Pennsylvania and Ohio, which were especially hard-hit by the decline in manufacturing and steel production in the U.S., view the shale gas reserves as an opportunity for revitalization and create job creation. A study by the World Economic Forum and IHS CERA argues that “the shale gas industry alone employs 600,000 people in the United States, with an additional 400,000 employed in the production of tight gas and coal seam gas.”[3] An earlier study by IHS Global Insights estimated that “approximately 2.8 million jobs could be attributed to the natural gas industry in 2008.”[4] The labor market benefits are clear in North Dakota.  Although not a swing state, North Dakota is heralded as the state benefiting most from the new oil and gas boom: its unemployment rate was 3.3 percent in July 2012—the lowest in the nation. While not nearly as low, the employment picture in the swing states with natural gas reserves also looks rosier than in the rest of the nation: Ohio faced unemployment of 7.2 percent and Pennsylvania 7.9 percent in July. Both are below the national unemployment rate of 8.3 percent (for July 2012).

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1 Comment

  1. avatar K Bledowski says:

    Coal, gas (shale or conventional) and renewables are all energy sources whose exploration comes with costs and benefits that are both private and public (external). This applies equally to Germany and the U.S. The most important aspect of this is that the mix of energy consumption is a function of mostly social preferences, and to a lesser degree, technology.

    Fracking may divide the U.S. and Germany in how much shale gas is captured. But many other European countries (e.g., Poland) have embraced the U.S. approach in a more holistic cost-benefit analysis. How you account for costs and benefits makes all the difference here.

    And yes, energy has entered politics as well. Just as nuclear energy had featured in German election cycles, so does gas and oil exploration feature in U.S. polls.

    My take is that there is less than meets the eye in comparing Germany and the U.S. in energy issues: local political and social pressures dictate how energy is generated, how it is distributed and priced, and how it is regulated. In the end, both societies will get what their voters tells politicians that they want.

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