In January of 2011, Gov. Martin O'Malley ordered a study to "determine whether and how gas production from the Marcellus Shale in Maryland can be accomplished without unacceptable risks of adverse impacts to public health, safety, the environment and natural resources." A draft of the report was published last month and concluded that, "provided all the recommended best practices are followed and the state is able to rigorously monitor and enforce compliance, the risks of Marcellus Shale development can be managed to an acceptable level."
This study refers to the use of fracking in the western part of Maryland; a practice of pumping millions of gallons of water and other chemicals into ground wells in order to break apart seams in the rock to release gas and oil deposits not assessable through regular drilling operations. This practice is not new. It has been around for decades. But the costs related to fracking prevented it widespread use. Once the price of oil increased to more than $100 per barrel, however, fracking became profitable and its use has been expanding since.
America is significantly less dependent on foreign oil today because fracking has increased domestic production of oil and gas. However, to stay in business, the fracking business depends on high oil prices to cover the related investments and expenses. With the recent drop of the price of oil to below $70 per barrel, fracking businesses that need, let's say, $75 per barrel to make a profit, are now losing money.
One reason for the drop in oil prices is that some foreign governments, such as Saudi Arabia, have decided to flood the market and purposely drive down the price of oil. According to Brad Plumer, writer for The Washington Post, some nations are "playing a long-term game in which it tries to obliterate some of its American competition by letting prices fall in the hope that some American producers go bankrupt."
While Maryland considers expanding the use of fracking, some towns and states are trying to get out of the fracking business. Even in oil-rich Texas, small towns are trying to outlaw fracking. In Reno, Texas, for example, the mayor and town council are trying to ban fracking after the town experienced its first recorded earthquake after fracking started in a nearby town.
Denton became Texas's first town to ban fracking within its city limits. They argued that their "property rights" gave them the authority to keep fracking away from their neighborhoods. Interestingly, the issue of property rights, once used by some to defend drilling anywhere in Texas, is now being used to try and stop the state from allowing fracking in or around people's home towns. But the state has argued that towns do not have the right to ban fracking on their land because, while they may own the land under their feet, the minerals in the ground belong to the state.
Like anything else, fracking has advantages for some and disadvantages for others. The primary advantage includes increased energy independence for America as fracking has given us the ability to produce more domestic oil and gas. This increased independence, as well as the drop in oil prices, has had all sorts of implications around the world, especially in places like Russia and Iran, where oil is the government's primary source of revenue.
The primary disadvantage is that fracking appears to have some, if not significant, environmental consequences. In some places in the U.S., for example, fracking has been linked to the contamination of local drinking water. In addition, fracking requires millions of gallons of water at a time when, in some places, drinking water is becoming scare.
The recommendations outlined in the Maryland report can be accepted or ignored by incoming Gov. Larry Hogan. Based upon reports from around the United States, however, the not-in-my-backyard response to fracking and related court battles appear to be the only variables with the potential to slow down the use of this practice in Maryland and our nation.
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Tom Zirpoli writes from Westminster. His column appears Wednesdays. Email him at firstname.lastname@example.org.