Impacts Of Fracking

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Economic Impact of Hydraulic Fracturing Microeconomics Abstract This paper will present several sides of the issue of hydraulic fracturing (fracking) for natural gas mining. It will highlight the need for a continued energy resource, address issues regarding the environment and look at the economic impact and future potential. So far the practice has been driven more by profits in natural gas than concern for its environmental impact. The fracking process has seen a significant boom in recent years, but has not been matched by significant regulations. The impacts on the environment, human health and the ecosystem are all areas that require well-thought, ethical decisions. However, these serious concerns should not…show more content…
The Marcellus Shale deposit lies beneath a natural water aquifer that supplies water to millions of people in the region. The fractures created by fracking allow gas to escape the shale for recovery, but it is not yet known if the gas is also escaping into adjoining water aquifers (EPA, 2011). This would create serious health issues for the populace supplied by that water. Another concern is the disposal or transport of the well wastewater. Once the water is pumped out of the well it is allowed to collect in pools near the wells. The regulations for these collection pools differ from state to state. Some states do not require the pools be lined to prevent inadvertent seepage into the ground. Related to this issue is the fact that all fracking operations are exempt from the Safe Drinking Water Act (Manuel, 2010). Because of this oversight, the U.S. House of Representatives authorized a provision for the Environmental Protection Agency to conduct a study to assess the risk that fracking has on drinking water (EPA,…show more content…
That balance slowly adjusted over the next 20 years due to reduced production. The price of gas peaked at the end of that cycle in 2008 at $12.69 /mmBtu (millions of British Thermal Units) based on the Henry Hub Natural Gas Front Month Futures (a standard for finding the pricing point of natural gas). However, because of the economic crisis and the emerging shale gas market, the price lowered to $6.50 between 2008 and 2010. The quickly expanding market increased supply so much that it hit a low price of $1.82/mmBtu in 2010. It has averaged $3.50/mmBtu in recent years due to new fracking technologies and government subsidies (McElroy, Lu, 2013). This price drop has had a serious affect on supply and demand. Subsequently, there has been a major shift in the supply side of natural gas. This shift is primarily due to the massive influx of gas derived from fracking shale gas. Because of this, the United States will be in a position to begin exporting natural gas by 2035 (Friedman,
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