How the Government Built Fracking

The sudden boom in fracking—or hydraulic fracturing for natural gas—relied in large part on massive government subsidies handed out over decades. While natural gas exploration has been touted as a triumph of industry and innovation, an article by the Associated Press details the favoritism natural gas exploration has received from the federal government over the past three decades.

The industry has received $100 million in research dollars and billions in tax breaks to find and capture the shale gas that many early observers thought was a waste of time. Geologist Dan Steward, who worked with the Texas natural gas firm Mitchell Energy in 1981, said that early on “probably 90% of the people” doubted the profitability of shale gas.

The Department of Energy began to fund research into how to access shale gas—located in the Marcellus Shale, which is found under parts of Pennsylvania, New York, Ohio and West Virginia and the Barnett Shale in North Texas—in 1975. The article notes that there were some early explosive accidents, little faith, and decades to go before the process of deep drilling and injecting chemical-laced water to release the gas was perfected.

The first energy subsidies began in 1916 and focused almost entirely on oil and natural gas production until the 1970s, the article notes. So while renewable energy saw $14.7 billion in the 2010 fiscal year, compared to $2.8 billion in subsidies for oil and gas industries, it has not enjoyed the long-term support of fossil fuels.

Those subsidies brought fracking from a speculative industry to a thriving one, including the ability to use technology to map shale deposits “and track exactly where a drill bit was, thousands of feet underground.”

But this latest source of energy comes with high environmental, and human health, costs. In 2004, a poor cement job around a fracking well in Garfield County, Colorado, led to drinking water being contaminated with dangerous levels of carcinogenic benzene. In 2007, a fractured natural gas well in Bainbridge, Ohio, led to the contamination of 23 home wells. In 2009, wells in Dimock, Pennsylvania serving 19 families were contaminated by faulty fracking wells.

Even without the risks, fracking cannot provide longterm energy solutions. “These renewables have a huge upside,” said Terry Engelder, a Penn State University geologist and nautral gas champion in the AP article. “In my view, the subsidies are really very appropriate.”