Fracking And Utility Bills

This week the Toledo Blade ran an interesting story about fracking — the word used to describe horizontal drilling and using pressurized water to break up shale formations and free natural gas and other fossil fuels — and its effect on the utility bills of Ohioans.

IMG_1751The gist of the story is that there are abundant supplies of natural gas due to fracking, and as a result Columbia Gas is charging its lowest amounts in years. The story estimates that, without fracking, the cost would be somewhere between 65 to 129 percent more. In a winter that’s been brutally cold, with higher natural gas usage as a result, the lower monthly bills are welcome indeed.

As the Blade story indicates, environmentalists are concerned about whether fracking will have an impact on water and its potential for causing earthquakes. My sense, however, is that most Ohioans are happy with how the development of the Utica Shale formation in eastern Ohio has proceeded. There’s no denying that the discovery of apparently vast natural gas and fossil fuel supplies deep underground has produced an enormous amount of economic activity in a formerly economically depressed part of the state, producing new jobs and causing lots of money from other places to be spent in the Buckeye State. If fracking also is lowering utility bills, and Ohioans make that connection, it will further increase the support for the entire fracking enterprise.

Fear Of Fracking

Many environmentalists have voiced concerns about the consequences of fracking.  Now they are joined by a billionaire Saudi prince — who is concerned for a different reason.

Fracking is the process by which deep underground rock formations are broken up to free trapped natural gas, oil, and other fossil fuels.  It has produced a nascent oil boom in eastern Ohio and other parts of the United States that are home to shale formations where the fossil fuels are found.

The Saudi prince, Alwaleed bin Talal, is worried because he thinks the increased oil and natural gas production that has been caused by fracking threatens the Saudi Kingdom’s economy, which is almost wholly dependent on oil production.  The outspoken prince is a bit of a rogue element in Saudi Arabia, but his point is irrefutable:  If demand from the United States declines due to the availability of domestic shale oil production, it will inevitably have an impact on suppliers.  Two OPEC countries, Nigeria and Algeria, have already seen a sharp decline in U.S. imports of their oil.

For years, America has talked about the importance of breaking its dependency on middle Eastern oil — a result that also would reduce the pressure on America’s deep involvement in all of the geopolitical issues that are found in that troubled region of the world.  America’s shale oil and natural gas reserves are believed to be enormous and, as Prince Talal notes, may allow us to achieve that goal.  As we address the issues surrounding oil shale production in our country, we need to keep that fact in mind.