To frack or not to frack, that is the question.

AuthorBinnings, Tom
PositionTHE ECONOMIST

IN COLLEGE, MY FRIEND ROB KEPT BOTH FAR-right and far-left magazines on his coffee table. When I asked why he couldn't make up his mind, he replied, The truth emerges somewhere between the extremes." Rob's point is well taken. Democracies must govern from the center even though what becomes middle ground may start as extreme.

Fracking or hydraulic fracturing--a technology for oil and gas extraction from shale rock--is nothing new. In recent years, it has taken off with advanced horizontal drilling. Imagine boring into the ground and installing a 5-1/2-inch pipe, 8,000 feet down, and two miles horizontally. With this latest iteration of fracking technology, the peak oil theory was busted, and today we have abundant reserves in the United States and probably beyond. As a result of more cost-effective methods in our American soil and geopolitical actions by Saudi Arabia, oil prices plummeted by over 50 percent in late 2014. This has significantly curtailed fracking activity in Colorado and throughout the country. But most producing wells are still operational and the outlook for the energy industry in coming years entails lower prices--roughly 25 percent to 35 percent down from what we experienced during the last five years. Of course, geopolitical supply shocks can always create volatility, but American production alone promises cheaper fuel costs.

But that all assumes we allow fracking.

In 2014, Pew Research Center asked the American public and the American Association for the Advancement of Science (AAAS) whether they favored the increased use of fracking. The results showed 31 percent of the public and 39 percent of scientists favored increased use. And this response is puzzling to me because "drilling down" finds politically neutral geologists comfortable with the risks presented by fracking if done properly.

Well-executed fracking means knowing the potential for localized problems and avoidance of areas and methods that threaten underground aquifers and could cause earthquakes. The key is for companies and regulators to be informed about subsurface geological structures before drilling. They should also pursue best practices with cement and metal...

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