How Fracking is Helping the Environment

Via the Prof, Walter Russell Mead notes that tracking is reducing CO2 emissions more than Cap and Tax or any other ridiculous scheme:

Right now, fracking is doing more to control carbon emissions than all the efforts of all the greens in the world. And by promoting American (and Chinese!) domestic energy production, it is doing more to lay the foundations of world peace than all the peace activists and disarmament campaigners in the world. And by creating more well paid blue collar jobs both in gas and oil extraction and in the manufacturing industries that will grow to exploit the new cheap energy sources, fracking strengthens the American economy and the tax base, providing revenues for both federal and state governments.

Unfortunately that doesn't fit into the "green" agenda. You see, if we have clean domestic energy, we'll use more and their grand plan to redistribute our money to poorer nations will be harder to bring to fruition. They were never about cutting emissions or finding cleaner energy, that's just an easy vehicle to use to achieve their ends.

It's too late for Australia whose citizens are being forced to choke down the most onerous emissions regulations on the planet.

As an aside, Mead is an excellent writer and his posts are never boring. He chooses relevant topics and explains his views in a straight-forward, non-preachy manner.

How American Ingenuity Will Change the World Again

There's a simplistic formula for making money in America.

First you have smart people come up with an idea and develop that idea. They then find wealthy people to financially assist them in bringing their idea to fruition (private equity). A company is born and the the idea becomes a viable product or service. The product or service is marketed and is provided to consumers at the best price possible while the company provides it in the most efficient manner possible.

In the end, everyone make money including the people who developed the idea, the financial backers who took a risk and those who subsequently work for the company. Consumers get what they want at a good price as the industry develops, expands and becomes even more efficient.

Notice that I did not mention government assistance or regulation at all in the above formula.

We're seeing that play out in an industry that we were not even key players in a decade ago.

Natural gas is second only to oil in making the world run. Ten years ago, the US was a player but not a large one. Russia ruled the natural gas markets in Europe and Asia and used that power to hold continental Europe by the balls.

Enter some smart people who developed hydraulic fracturing that allowed natural gas once thought untouchable to be removed and sold. This has been so successful that the price of natural gas--used in everything from power plants to boilers--has dropped dramatically keeping prices reasonable in Obamanation.

To be honest, this is the only truly successful sector in America since Obama took office and he's doing everything he can to kill it through regulations, but I digress.

Today, natural gas can be bought for $2 per million cubic feet in the US but in Asia is ten times that amount. We are sitting on something that, properly exploited will ensure a strong America for decades.

Some issues still remain--such as restrictions on exports instituted by politicians who don't know the first thing about energy and environmentalist's screaming just to scream--but the industry is one of the few bright lights in an otherwise gloomy economic world.

Here's a must read.

PA Booming While NY Loses Out on Billions

In yet another example of liberal policies hurting economic activity, the state of New York is sitting on a veritable pool of natural gas and won't let anyone touch it. Pennsylvania and West Virginia, to their credit, have put procedures and policies in place to safely remove the gas while reaping huge benefits and reducing natural gas retail costs for homeowners and businesses:

PITTSBURGH - Marcellus shale gas wells in Pennsylvania generated about $3.5 billion in gross revenues for drillers in 2011, along with about $1.2 billion in West Virginia, according to an analysis by The Associated Press.

That's a huge amount of revenue for businesses and employees and a nice windfall for the state in tax revenue. How many jobs have been created by exploiting these wells? Think about not only the drilling companies but the people who supply them: drill equipment suppliers, fuel suppliers, local restaurants, motels, convenience stores, etc. The ripple effect is enormous. It's only going to get better:

Patrick Creighton, a spokesman for the Marcellus Shale Coalition, an industry group, estimated that it costs the industry about $5 million to bring a well into production. With about 2,200 active wells in the state, that comes to $11 billion in additional investments, mostly over the last four years. The industry is also building or planning billions of dollars of new pipeline construction.

But not just businesses are booming, individuals are making a nice chunk of change as well:

Creighton said the minimum royalty in Pennsylvania is 12.5 percent of well revenues, meaning property owners here were paid more than $400 million last year.

So why is New York missing out on what is essentially the fastest growing business in the region? Because the legislature--led by mainly urban liberals based in NYC--are blocking any opportunity for shale gas to be extracted. The ban is in place until June of this year but I expect that the moratorium will be extended, thus allowing Pennsylvania to continue being the premiere state for gas extraction and sale. If Gov. Cuomo does see the light and allow hydraulic fracturing, I would bet that the regulations will be so oppressive that the state will fail to see the benefits other have. Environmentalists will not give up without a fight, though.

Obamanation: Gasoline Prices at Record Highs

The Obama administration has no energy policy but then they have no real policy on anything else so no surprise. Yes, they talk of green power and electric cars they subsidize but have no coherent strategy for keeping fuel prices stable. Recent reports predict increases throughout the summer and Saudi Arabia is about to choke back on the taps guaranteeing an even quicker and greater increase.

Obama is complicit in this as he has destroyed American power in the region, has botched the Iran situation from day one and has neutered America's oil exploration and extraction capabilities. Not to mention the XL Pipeline debacle in which he kowtowed to the environmental lobby.

America is sitting on pools of oil that we cannot go after and massive amounts of natural gas that will allow us to flood markets thus reducing the price of oil but we can't export due to regulatory and other restrictions. Imagine if we export natural gas in large quantities and it is used to fuel power plants, thus reducing emissions while limiting the use of petroleum as a fuel. It's win-win and we get to give the Russians the finger at the same time.

It's time we get a rational, pragmatic energy policy but when we have a present who develops a budget that is beyond laughable, I'm really not expecting it.