During the darkest days of the 2008 recession—a time when struggling American consumers were stuck with sky-high oil and gas prices—fracking, a decades-old process, was modernized and combined with horizontal drilling. This innovation produced significant amounts of oil and gas here in the United States at rates not seen in decades. How much was actually produced? Due to fracking, U.S. oil production has grown by more than 80 percent since 2008, and the need for imported oil fell to levels not seen since the 1970s.
Concerning natural gas, reserves marketed production grew from 1.7 million cubic feet (Mcf) in January 2008 to 2.4 Mcf in January 2016, and while gas production from traditional wells has fallen by nearly 10 percent since 2007, natural gas from fracked wells has grown by more than 600 percent, accounting for 56 percent of current production.
Due to fracking, prices of West Texas Intermediate crude oil have plummeted from highs of more than $145 per barrel in 2008 to less than $27 per barrel in mid-February 2016. Natural gas prices have fallen substantially as well, even as demand has increased. Natural gas provided approximately 21 percent of the United States’ electricity supply in 2008, while it delivered just over 32 percent of the electricity used in the United States in 2015. During the same period, natural gas prices fell from a high of more than $12 per million Btu in June 2008 to less than $2 per million Btu in February 2016.
The energy industry was the one bright spots during the recession. The oil and gas industry saw a 40 percent growth in employment from 2007 to 2013, while the U.S. economy suffered through job losses of just over 3 percent.
Falling oil and gas prices and increased employment in the energy sector are almost solely responsible for the economic recovery the nation has experienced since 2007. But the country would have seen faster growth, higher wages, and more jobs had the Obama administration not piled on regulation after regulation on the fossil-fuel industry, preventing new production and new pipelines whenever it could.
The fracking boom has resulted in a better environment as well. Instead of heaping praise on the highly subsidized wind and solar power industries for their tremendous growth and reducing pollutants and carbon dioxide emissions, the Obama administration should be touting the environmental benefits flowing from the growth in natural gas. After all, as pointed out in a forthcoming book, Let’s Run the Numbers, “A one-gigawatt solar farm with a 23% (capacity factor) is actually a 770-megawatt gas plant enhanced by 230 megawatts of sunshine.” In other words, every wind and solar farm being built today is really a natural gas plant. Globally, the amount of carbon dioxide reduced by solar power’s expansion in the United States equaled less than four hours of global carbon dioxide emissions in 2013.
A recent study by Oren Cass, senior fellow at the Manhattan Institute, finds while U.S. gross domestic product grew 7.3 percent since 2007, U.S. carbon dioxide emissions fell 9.7 percent during the same period, almost entirely due to the increase in the use of natural gas to generate electricity. Burning natural gas for electricity releases just 50 percent of the carbon dioxide as burning coal, and the switch from coal to natural gas would not have occurred absent the boom in cheap natural gas, which is due almost entirely to fracking. According to Cass, for every ton of carbon dioxide cut by solar power’s substitution for coal, the switch to natural gas has removed 13 tons of carbon dioxide.
Additionally, if you care about the nation’s land and wildlife, then natural gas power plants beat wind farms and solar farms by a mile. Solar and wind facilities are killing and displacing thousands of birds and other species annually and require tens of thousands (in some cases, hundreds of thousands) of acres of land to produce a paltry amount of energy. By comparison, a modern natural gas plant uses just a few acres of land, and wildlife thrives in the vicinity of the wells and pipelines.
Whether it be Earth Day or payday, America owes frackers a big round of applause.