Mar
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Environmental Inequality-Class #19-Gerald Lizzo
March 31, 2015 | Leave a Comment
As most of us already know, the price of crude oil has fallen dramatically over the past 6 months or so. Not only has it fallen by over 50% during that time, but there are a number of analysts predicting it will continue to fall to as low as $35 a barrel on the NYMEX. Quite frankly, the fact that prices that low are even conceivable is quite miraculous as many never expected to see it where it is right now ever again. So what is the reason for this dramatic drop in its price? For the most part, it is due to an overwhelmingly high amount of supply. This has been driven by the emergence of the United States as one of the world’s largest oil producing countries and that is thanks in large part to a new and highly controversial technique of drilling known as fracking.
This new technique allows us to extract natural gas and oil from shale rock. Essentially, large amounts of water, sand and chemicals are injected into the rock to displace the oil and natural gas inside. This process has revolutionized the energy sector and spurred much economic growth in regions where the technique is practiced. But this has not come without consequence.
There is a host of environmental and health concerns regarding the practice leading many to desire a ban on the entire procedure all together. Firstly, fracking requires a very large amount of water to be transported to the sites for use on the shale. Worse, there is concern of potentially carcinogenic chemicals being released into the groundwater around the sites from their use within the process. Even stranger, there have been documented reports of small earthquakes resulting from the fracking process in areas and cities not far from the sites. Finally, this process has been so successful in extracting more resources that many companies are resorting to it for extraction purposes. Consequently, companies are relying on it to be the solution to find more oil and energy and not putting resources into finding ways to generate cleaner energy.
The controversy has gone so far that Governor Andrew Cuomo of New York recently banned the practice altogether, despite originally being a strong advocate of the process because it was helping to stir up business in the struggling regions of upstate New York. Governor Cuomo cited a health report from the acting state health commissioner, Dr. Howard A. Zucker, which found fracking to be severely detrimental to the health of the environment and the people living near the sites. Simply put, when asked he would want his family to live near a fracking site, he said he would not allow it. Most notably, he cited concerns about water contamination and air pollution. Now, while this is all well and good, I feel as though we as the public should have more details regarding the studies that were conducted to come to this conclusion. The New York Times article simply stated Dr. Zucker cited many scientific studies to back his claim but gave no detail about the studies themselves and how they were conducted, what they measured and what the exact results were. More transparency regarding the matter I think is necessary so more individuals can fully understand the consequences of such practices if it really is that unhealthy for them and the environment.
Lastly, earlier on I briefly mentioned the economic impact of fracking on the price of oil. I should also mention that another reason the price has continued to fall or at least remain so low is because companies are not cutting back on production. Particularly in Saudi Arabia, where most of the world’s oil comes from, they have not cut back on supply in an effort to drive other companies out of business and keep a firm grasp of their market share. To a certain extent it is working because many American companies have gone under not able to turn a profit because their costs to drill for the oil were too high. But even still, our supply is more than triple what we have expected it to be as the last report from last week fracking allows companies to drill not only vertically but also horizontally. This means they can make more from pre-existing sites but also make more new sites altogether. This has kept the price of oil much lower, raising a lot of concerns about corporate profits moving forward. A number of companies have already lowered their forecasts for the year from a strong dollar and low oil prices. So this process is not only hurting the environment but it is also hurting the business conditions for many American businesses as well. Hence, I believe something should definitely be done to limit the process as a whole.
