No, Affordable Oil Will Not Cause A New Great Depression

Published May 16, 2015

By: James M. Taylor and Justin Haskins

Democratic Party strategist Robert Weiner claims inexpensive domestic oil production via hydraulic fracturing will cause a new Great Depression, yet exactly the opposite is true. Writing in the Lynchburg, Virginia-based News & Advance, Weiner and his colleague Hannah Coombs strangely argue that Americans taking advantage of abundant, affordable energy resources is bad for the economy and will destroy our standard of living. In reality, Weiner and Coombs provide a perfect illustration about how anti-science, anti-fossil fuel hysteria drives leftist crusades against global warming, domestic oil production, and other asserted environmental causes.

Hydraulic fracturing, also known as fracking, is a process by which a mixture of water, sand, and trace chemicals is injected deep underground at high pressure to create small cracks in rock formations that have locked up valuable oil and natural gas deposits. The small cracks allow the trapped oil and natural gas to escape their bondage and be recovered by energy producers. Thanks to the relatively new technological advancements that have made fracking possible, American oil production has surged in recent years, creating thousands of  jobs, billions of dollars in new government tax revenues, and immeasurable U.S. economic benefits that previously were realized by often-hostile foreign oil producing nations.

In North Dakota, which is at the center of the American fracking revolution, the per capita income has risen from the bottom five in 2005 to one of the highest in the nation today. Even with falling gas prices, the Bureau of Labor Statistics reports unemployment in March was only 3.1 percent, second-lowest in the United States.

In September, North Dakota state officials announced there were 26,000 unfilled jobs, nearly all of which were in the fracking industry or were closely tied to it. There have even been reports fast-food restaurants have been willing to pay out hiring bonuses of $300 or more in order to entice workers.

In addition to the numerous direct economic benefits, fracking has contributed significantly to the nation’s low gas prices, benefiting virtually every consumer and business in the nation.

Despite these indisputable facts, Weiner and Coombs say economic chaos is just around the corner and it’s all the fracking industry’s fault.

“With no strong regulation of fracking in place and no protection from an approaching disaster of ended supplies and contaminated water, our energy policy remains in free fall,” wrote Weiner and Coombs. “On this issue, Congress is acting like we are in the 1920s, obliviously awaiting another Depression, this time in the form of an energy crisis. Except that this Congress is not prepared for a ‘New Deal’ on energy.”

Weiner and Coombs argue the nation’s growing dependence on fracking is dangerous because eventually the oil supplies will dry up and because the whole process consumes too much water. Unsurprisingly, they argue the only solution is to continue investing in solar and wind energy and other “renewables.”

This sort of warped thinking is more than misleading; it completely defies everything we know about economic development. Simply because a resource may eventually run out (and in this case, centuries from now rather than Weiner’s claimed mere months from now), this is no reason we shouldn’t take advantage of the resource while it is available and economically superior to other potential resources. This is especially the case if anti-fossil fuel activists are correct in their dubious claims that wind and solar power will soon be more affordable than conventional energy.

If fossil fuels will soon be uneconomical anyway, then what is the economic rationale for not using them while they presently provide the most economic benefit and saving them for a future time when they provide the least economic benefit? Such bizarre economic strategy is what creates Great Depressions rather than preventing them.

Lurking behind Weiner and Coombs’ nonsensical economic argument is the gigantic green elephant that ultimately motivates virtually all leftist economic arguments regarding energy: the belief in an imminent and catastrophic global warming crisis. The real reason environmental activists oppose fracking is not an actual belief it will cause economic harm; it’s because they oppose anytechnology or economic activity that makes conventional energy sources more affordable and abundant.

It doesn’t matter that there’s been no measurable global warming for more than 18 years, that renewable electricity has proven to be far too expensive, or that fossil fuels can actually save millions of lives in developing nations around the world.

Investing in fracking isn’t going to cause another Great Depression; it is creating – and will continue to create – many thousands of jobs and billions of dollars of revenue for the U.S. economy. And when the oil finally does run out, at some unknown date in the far-off future, economic innovators and entrepreneurs will have long-since discovered other cost-effective sources to deliver energy to American homes.

The only potential crisis here is backward-thinking environmental activists relegating America to a second-rate global power by purposefully failing to take advantage of energy sources that would otherwise fuel economic growth for centuries to come.

[Originally published at Forbes]