Economic Impact of Hydraulic Fracturing
As with any endeavor, the calculated cost, as well as the cost-benefits tradeoff, is going to depend on what the position is on the action. To environmentalists, the cost is phenomenally high. To people who concentrate on improving unemployment, no cost will be too high. The White House has pointed out that a little pollution not only won’t hurt, but “Appropriately balanced efforts to restrict harmful pollution can improve economic performance along with the health and safety of Americans” (White House, 2012, p. 231). According to the White House, savings under Obama’s Executive order will “exceed $10 billion over the next five years” (White House, 2012, p. 233).
The White House (2012) believes that by setting up environmental constraints it will be able to open new fields that will bring in 49 percent of the total US natural gas production (p. 256), which will allow a 1.5 million barrel per day reduction in oil. Increasing the natural gas supply, according to the White House, has caused the wholesale natural gas prices to drop by 67 percent in electricity generation and another 34 percent in the demand for residential prices. The US is also exporting gas and oil.
What does this really mean? True (2010) suggested that it is going to cost Oneok Partners LP $470 million to expand in the Williston Basin and Woodford in Oklahoma. The company is expected to double processing capacity in Williston. However, Furchtgott-Roth and Gray (2013) conducted a study that showed how the state of New York would benefit from allowing fracturing:
* Per capital income in counties with wells goes up 11% over counties without
* Counties with over 200 wells add jobs at 7% higher than those without wells
* Income has the potential to expand by 15%
* 25,000 jobs could be created.
Furchtgott-Roth, D. and Gray, A. (2013) The economic effects of hydrofracturing on local economies. Empire Center,...