Paul Krugman may be a Nobel Prize–winning economist, but his most recent column in the New York Times, which condemns hydraulic fracturing and praises solar energy, displays an astounding disinterest in numbers and woeful ignorance of the facts.
Without providing any sources, Krugman writes, “We know that [fracturing] produces toxic (and radioactive) wastewater that contaminates drinking water; there is reason to suspect, despite industry denials, that it also contaminates groundwater.”
Huh? Over the past 60 years, the process of hydraulic fracturing has been used more than 1 million times on oil and gas wells here in the U.S. If fracturing were as dangerous as Krugman implies, then hundreds, perhaps thousands, of water wells would have been contaminated by now. And surely the public would have been made aware of those many contaminated wells.
Krugman could have consulted the Times’s own reporting on this subject. Over the past year or so, NYT journalist Ian Urbina has been writing extensively about the oil-and-gas sector and fracturing in particular. Urbina has spent months, some of it working with the Environmental Working Group, to document cases of water wells that have been contaminated by fracturing. Urbina’s finding: One water well in West Virginia was likely contaminated by fracturing in 1984. After laying out the details of the contamination, Urbina writes, “Drilling technology and safeguards in well design have improved significantly since then.”
Or, Krugman could have looked at the findings of a multi-year study on natural gas released last summer by the MIT Energy Initiative. The 170-page report addresses hydraulic fracturing directly, saying, “The fracturing process itself poses minimal risk to the shallow groundwater zones that may exist in the upper portion of the wellbore.” The report goes on, “The physical realities of the fracturing process, combined with the lack of reports from the many wells to date of fracture fluid contamination of groundwater, supports the assertion that fracturing itself does not create environmental concerns.”
Krugman, who continually writes about the need for more jobs in America, also might have considered the jobs that are being created by the oil-and-gas sector, both directly and indirectly. Over the past 18 months or so, some 48,000 people have been hired in Pennsylvania by companies working in the Marcellus Shale. In August, Halliburton announced it would hire 11,000 new workers this year in North America, most of them to work on shale-related projects. Better still, none of those jobs require Solyndra-style subsidies.
Hydraulic fracturing is driving down the cost of natural gas, which creates jobs in other sectors, including steel and petrochemicals. From 2005 to 2008, U.S. natural-gas prices averaged about $7 per thousand cubic feet, but today, the spot price is well below $4; the price drop saves consumers about $60 billion per year. In March, Nucor, America’s biggest steel producer, broke ground on a new $750 million direct-reduced-iron plant in Louisiana. The availability of low-cost natural gas enabled the project. Nucor may ultimately invest $3 billion in steel plants in Louisiana that could create as many as 1,000 permanent, high-paying jobs. Meanwhile, the abundance of low-cost natural-gas liquids has convinced several major chemical producers to announce expansions of existing plants as well as the construction of new facilities on the Gulf Coast and in Appalachia.