Policy Documents

Tip Sheet: Hydraulic Fracturing

January 13, 2014

Problem

Hydraulic fracturing, or fracking, is a decades-old well stimulation technique that recently has been combined with horizontal drilling and computer-assisted underground monitoring to make extracting from vast reserves of oil and natural gas more economical. This has stimulated dozens of state economies and revamped the nation’s energy portfolio.

This boom in oil and gas production, especially in regions not accustomed to the industry, have led to some concern about whether the technology is safe and if the benefits outweigh the costs. Environmental activist groups have called for state and local governments to impose overly aggressive regulation, moratoria, and even outright bans. They also have called for increased federal government oversight of hydraulic fracturing.

Solution

North Dakota, a state that has embraced fracking, has seen the creation of 70,000 new jobs in the past five years as a result of the increased oil production from fracking. North Dakota’s unemployment rate has been holding near 3 percent for the past few years. Other states – such as Ohio, Pennsylvania, and Texas –  that have allowed for and not over regulated the practice also have experienced robust job growth and increased tax revenue as a result of hydraulic fracturing.

In June 2013, Illinois passed the most comprehensive fracking bill in the nation, satisfying the interests of both industry and environmental groups. The measure has been said to be a model for other states. State government should tailor regulations to their specific needs due to the wide differences in geology, hydrology, and economics.

Statewide bans and moratoria on fracking impose an unnecessary burden on the economy by hindering development. Hydraulic fracturing has a 50-year history of being a safe and reliable technology and should be regulated on the basis of the best- available science and its track record, rather than on unfounded claims driven by fear and misinformation.
Impact fees, when imposed, must be narrowly tailored and directed towards specific impact remediation. They should not be used for general operating or to increase government spending.

As more states set standards for fracking, the need for federal oversight will further dissipate.

Policy Message

Point 1: The Yale Graduates in Energy Study Group found the benefits of hydraulic fracturing exceed the costs by a ratio of 400–1.

Point 2: By using horizontal drilling techniques, producers are able to drill multiple wells from the same drilling pad, reducing surface disturbance while increasing access to oil and gas resources.

Point 3: Fracking fluid is composed of 99.51 percent water and sand, and .49 percent chemical additives, according to the U.S. Department of Energy. Such additives prevent corrosion in the well, reduce surface tension in liquids, stabilize clay particles, adjust pH, and eliminate bacteria.

Point 4: Shale gas production consumes less water per unit of energy generated than onshore oil production, ethanol production, and washing coal after it has been mined.

Point 5: Increasing reliance on natural gas has been a key reason why U.S. carbon dioxide emissions have fallen to their lowest levels since 1994 and are not expected to reach their 2005 levels again through 2040.

Point 6: Current available science and track record suggests moratoria on hydraulic fracturing are unnecessary.

Point 7: Low energy costs due to abundant and affordable oil and natural gas are projected to add one million jobs by 2025.

For more information on hydraulic fracturing and a complete list of references, see:

Hydraulic Fracturing: A Game-Changer for Energy and Economies,” The Heartland Institute. http://heartland.org/policy-documents/hydraulic-fracturing-game-changer-us-energy-and-economies