Fracking and the eternal dilemma: economy vs. environment

There’s so much competition among U.S. energy-producing industries, the speaker says, that the natural gas industry is trying to kill the coal industry.

The speaker is Myron Ebell, Director of the Center of Energy and Environment at the Competitive Enterprise Institute (CEI).  As the name suggestions, this libertarian-leaning organization advocates for unfettered free markets.   His topic is overly burdensome regulations.  Today he’s focusing on issues that affect New Mexico directly.

Because of natural gas fracking (hydraulic fracturing, the process by which natural gas is extracted from underground rock), U.S. energy production is way up, and the U.S. can expect to be a net energy producer, he says.  The price of natural gas is low, so the gas people started the war on coal, and, he says, this has helped the Obama administration cover up the cost effects of environmental regulations.  He cites a 2011 survey by the U.S. House of Representatives Committee on Oversight and Government Reform, in which the Environmental Protection Agency (EPA) is blamed most of all regulators for interfering with business; according to this survey, about half of all complaints are against this one agency.  (So EPA has become the agency Americans love to hate, I’m thinking.)

Environmentalists are litigating, he said, to stop the export of coal.  Among other methods, they are blocking construction of ports and rail lines.

Maybe, I surmise, they are doing that because air pollution travels on the wind to the far ends of the planet.  Burning coal anywhere affects everyone everywhere – as shown by studies documenting that dust from China routinely crosses the Pacific to affect the air in the western U.S.   New Mexicans know the eternal argument about coal: it’s an important industry that produces good-paying jobs where jobs are otherwise hard to find, but it’s dirty.  Like uranium mining back in the boom days, it brings economic benefit but at a steep price – environmental degradation, water pollution in a desert, health effects on those who live close to the smokestacks.

No fan of renewable energy mandates, Ebell says windmills cause air pollution.  When the wind is not blowing, backup power sources are necessary, usually old reliable fossil fuels.  Ebell says that when the furnaces are fired up intermittently, they are less efficient than if they are running constantly and therefore create more pollution.  He forgot to mention the option of storing wind and solar power, technology still in development and perhaps a reason to continue subsidizing these industries.

Oil producers are making good money because of healthy competition, he said, but one problem for domestic consumption is the requirement to include ethanol.  Because of this, he said, oil producers prefer to sell their product overseas.  I agree with his point:  evidence is growing about serious unintended side effects of corn-based ethanol, such as increases in the costs of food.

Ebell predicts fracking will not be stopped by environmental concerns but will be regulated, and the critical question for the industry is whether the regulations will be under the Clean Water Act or the Safe Drinking Water Act; the latter is significantly more burdensome than the former, he says.  For me a critical question is not just what’s left in the water after fracking, but how much water is left, period.

We want New Mexico to prosper, and we know the potential benefits of ending  dependence on foreign oil.  But I’m always concerned when a policy analyst uses a conveniently limited set of facts to justify any policy position.  In the real world,where everything is related to everything else, economic benefits can be undermined by unintended consequences.  One reason for regulations is to slow down the wholesale exploitation of natural resources while neutral parties attempt to gather facts.

Triple Spaced Again, © New Mexico News Services 2013

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