http://www.foreignaffairs.com/articles/141203/robert-a-hefner-iii/the-united-states-of-gas
The author explains that those countries hoping to replicate the US's "fracking" revolution might be unsuccessful. Not because of the difficulty of developing the technology but, instead, because of certain institutions that are integral to the development of natural resources. The author makes the case that only the US's unique understanding of property rights--in addition to other important institutions-- made the fracking revolution an uniquely American experience.
I think that the author is correct, but what do you think?
7 comments:
I think because America is a capitalist countries, private owned companies, which can land a deal with shale landlorder, have the right to "frack" while in other countries, those shales are of the government's properties.This allows a competitive oil and gas market, which leads to America become the world's second-biggest oil producer. Meanwhile, in countries like China, although having the largest shale resources available, the government controls the shales so it's costly to produce the oil. If China can open their resources for private companies to frack, they would probably catch up quickly with America. But i doubt that would happen very soon.
I want to see how the recent decline in gas prices will affect these firms. I think we will see a decline in hirings or possibly some layoffs if it fails to be as profitable in the short-run.
Although more than one million people are getting employed, the effects of fracking on the environment is devastating and many people, if not millions are feeling the negative effects. Showing that we are using high amounts of natural gas is concerning because it is not sustainable. The amount that we use should decrease rather than increase. In my opinion 25% is already too much. If we stop being reliant on the oil there is a chance that, we as a country, would not have to damage our environment further in an attempt to support our excessive need for oil. Although economically the advantage may be vast, our poor planet will be suffering. Contrary to the author I think politicians should step in. I also think that it is smart for Europeans to say “mot in my backyard” their environment will be saved which ours decay. Europeans are smart to not destroy their backyards. Some of the effects of fracking besides general release of green house gas is an increase in earthquakes which are generated from the drilling. Another disadvantage is methane seeping into the water. To read more about some of the issues arising take a gander at this article http://www.nytimes.com/2013/03/14/opinion/global/the-facts-on-fracking.html?pagewanted=all&_r=0 . Now don’t get me wrong, I do enjoy and appreciate lower unemployment and gas rates as any other person but I want future generations to have a beautiful environment. I also do acknowledge that fracking is extremely economically beneficial because it is efficient with high productivity and low cost but I do ask the question of is it viable?
I personally agree with Austin when he says we should look at how the lowering gas prices will affect these firms. While fracking may have been profitable, who is to say that with lowering prices on gas and oil that these firms will actually lose money or not.
I agree with the previous comment of fracking being detrimental to the environment. While the new discovery may cause gas prices to go down, only time will tell the true social cost of shale fracking which might be more than the benefits being gained right now.
I do not think that the effects of fracking are so detrimental that the EPA should not allow it. The current director of the EPA is not completely against, and that's good enough for me. Just check out what the EPA has on its website.
http://www2.epa.gov/hydraulicfracturing
However, that's not really the point of this article. The point is that fracking could not have occurred in other countries, which is more salient to our class.
It is nice to see a discussion of an issue that is very current. It is true indeed, as Tyler points out, that institutional arrangements in the US allow for unprecedented innovation in the area of hydraulic fracking. This is especially true as owners of land also own anything that is found underneath the surface.
However, I also find Shelli's point that there are negative environmental consequences that come with fracking valid. It seems that we already know about the impact of hydraulic fracking fluid on underground water. But, I am more concerned about the impacts we are still unaware of.
If one looks at countries around the world that rely on the extraction of natural resources, the picture is rather disappointing. Very few of the countries provide a high standard of living for the population at large. The exception is Norway. There is an interesting article about a person who helped Norway create its long-term energy policy that has environmental sustainability as one of the priorities: http://www.pri.org/stories/2012-06-06/norways-example-oil-and-gas-boom-done-right
Keep up with constructive and civil discussion.
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