The cost of domestic oil production and U.S. energy independence

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By Austin Andersen

The United States currently finds itself in the midst of a domestic oil boom so unprecedented that the IEA projected that the U.S. will overtake Saudi Arabia to become the world’s biggest oil producer before 2020, and will be energy independent by 2030.

At a time when our economy is still recovering from the Great Recession, unemployment is still persistent, albeit improving, and there is a public consensus to lessen our dependency on foreign OPEC energy sources, this seems like a time to rejoice.

This sudden boost in domestic oil production gives thanks to the development of new and cost-efficient oil and gas extraction technologies; namely hydraulic fracturing. Otherwise known as “fracking,” it is an unconventional process employing both vertical and horizontal bore wells to extract natural gas found in shale deposits being found across the United States. The largest of which, the Marceullus Shale, lays beneath the southwestern half of New York State, through Pennslvania and West Virginia.

Fracking allows access for energy industry companies to tap vast domestic reserves previously thought economically unfeasible to reach.

This burgeoning new method of oil and gas extraction has led the United States to reduce its dependency on foreign (and sometimes unstable) OPEC sources such as Saudi Arabia and Venezuela. Therefore, energy independence, job creation and additional revenue as domestic  energy needs, which initially were focused on importation, now revel in the profit of exportation

However tantalizing the economic benefits seem thanks to this new technology, it is not without serious negative environmental health problems.

Side effects of hydraulic fracturing include intensive local water use and aquifer depletion (an average of four million gallons of fresh water are necessary per frack).

Next there is the serious issue of groundwater contamination due to the 600 various proprietary chemicals including lead, uranium, mercury, benzene, hydrochloric acid, methanol and formaldehyde, that studies have already proven to be linked to increased levels of health problems in people living near drilling sites (not to mention viral videos of people who have been able to light their tap water on fire due to high methane concentrations).

Finally, one has to consider the increased levels of carbon dioxide that will continue to be introduced into the atmospheric levels, creeping past the 400 parts per million mark.

A forward step that President Barack Obama could pass to help mitigate the negative environmental health impacts would be the passing of the FRAC Act which would reverse the 2005 Energy Policy Act and require fracking industries to disclose the names of the hundreds of chemicals used in this process.

Furthermore, Obama’s recently proposed Green Energy Fund would allocate $2 billion from “profitable oil and gas companies” for renewable energy research.

The environmental issues that exist with this energy boom are no doubt troubling to say the least.

At the same time, however, one cannot look past the obvious benefits that result from energy security and independence, domestic industry and all the economic benefits that go along with this.

The tug-of-war game that exists between economic growth and stability with environmental stewardship and the goal of a sustainable future is present once again.

 

 

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