It is without a doubt that when we discuss corruption on Wall Street, insider trading is one of the most heavily guarded topics. Insider trading, as defined, usually occurs in the most standard scenario when a corporate insider gives non-public information to a trader in exchange for rewards which include but are not limited to cash, material rewards, and even a leg up on a future career prospect. It is no surprise to me to learn that insider trading occurs from time to time, given my less-than-optimistic view on those bankers on Wall Street. When you have the means to become Vice President of a firm in 5 years instead of 10, why not give in?

In the Wall Street On Parade article that featured guest columnist James Kidney who served on trials for the SEC for 25 years, he had a really interesting take on the whole inside trading issue. I thought it was funny when he related back to his insider trading cases and described them to be fun to solve and then comparing it to a game of Clue. While he was able to win many insider trading cases, he says: “I wish I could say these victories achieved something important for securities enforcement. I doubt that they did. Those cases tried against other than true corporate insiders were largely a waste of government (and my) time.” In this quote, he voices his opinion that his work did not change anything, even though “justice for the SEC” prevailed. In his view, he thinks that the SEC spends far too many resources trying to find out who these low level insider traders are when these very people are too far removed from the corporate suit and carry zero impact on the market. I especially like his analogy of “broken windows” where he says that SEC is too busy policing “the broken windows on the street level” and ignoring those doing the real damage on the “penthouse floors.”

Another criticism for the SEC and the DOJ that Kidney brings up is how he sees that the Division of Enforcement should be going after the little insider trading guys who spread rumors about stocks IF they are doing something to moderate what is going on in the C-Suite, or those on the scarier end of the Wall Street food chain. Kidney observes that the SEC has habitually been known to shy away from bringing to light colorable fraud actions against the senior insiders of the big banks who all may have caused the 2008 financial crisis. As this is my first time hearing about this, it is very shocking to learn that the SEC’s Division of Enforcement does not lay down a bigger hammer so to speak, when the more higher up Wall Street men make a play with their power. While James Kidney writes a narrative from his experience in dealing with the little guys in insider trading, he most importantly writes an exposé on the corruptness of the SEC and Wall Street.

However, in the article from New Economic Perspectives, Black argues against New York’s Second Circuit’s decision that makes it impossible to retry the elite Wall Street defendants who grew wealthy through trading on insider information. Basically, this decision acts like a roadmap that every corrupt Wall Street elite can follow to trade on insider information with total impunity. This ruling also establishes a financial version of the “don’t ask; don’t tell” defense during insider trading prosecutions where elites can use their juniors to deny any responsibility. Black also states that the real victims are the investors who he views as the “crippled integrity of Wall Street” and the very few honest traders on Wall Street who can no longer compete with cheating rivals. From the Second Circuit’s ruling, Black views that it has completely undermined the integrity of Wall Street, which I somewhat agree with. I believe that Wall Street has always been, and will always be tainted with corruptness, so while I admire how passionate Black is about insider trading, I am hesitant to to completely agree with his viewpoints.

From these two opposing articles, I find truths in both exposés regarding insider trading on Wall Street. In the first article, James Kidney focuses on the larger picture and puts the problem of insider trading on the Wall Street map. I agree with him when he states that while insider trading is a problem under the responsibility of the SEC, there are bigger and more damaging problems to put under the microscope that the SEC is not yet already doing. Regarding Black’s article, I agree with him that he views insider trading and specifically the Second Circuit’s decision as a large metastatic tumor on the heart of Wall Street, I am skeptical to believe all of his accusing convictions.

Insider trading is a problem in the corporate world of America. At first I thought that this made no sense. People share secrets all the time. But when this information could mean millions or billions of dollars, then it’s a big deal. It’s especially so when the money doesn’t belong to those individuals sharing private information, but is used as such. Leveraging nonpublic information to gain an unfair advantage is rightfully punishable by law.

James Kidney pointed out something that was new to me. In his article, he mentions how the SEC spends too many resources chasing the little guys. The fifth level removed from the original source was getting prosecuted. Apparently, the SEC chair and director of the Division of Enforcement explains this through the “broken windows” theory of “law enforcement.” Interestingly enough, this method was applied in the cleanup of the MTA. Studies showed conflicting effectiveness, but the idea was essentially that stopping petty crimes would prevent a crime culture and discourage larger crimes. However, this is completely counterintuitive in the finance world. It simply doesn’t make sense that the neighbor gets punished instead of the person who originally leaked the information. The Court of Appeal’s decision on the Newman case was good to let those unaware of their doings free, thus allowing for more resources to catch the bigger fish which would in turn be more effective in preventing future larger insider trading issues.

But on the flip side is William Black’s article. He talks about how the same decision can be leveraged by the elite Wall Street folks to stay above the law. So the financial analysts of several levels removed from the original source will walk scot-free. Another great point that he brings up is how insider trading severely hurts the honest investors. These unstable actions bring huge amounts of risk into the market economy. In other words, the elites stay above the law and “earn” enormous amounts of money by playing with the middle class people’s money. It’s quite ironic when a corporation maintains that it prides itself in ethics and integrity when news of these scandals stream out continuously month after month.

Like the authors mentioned, white collared crime needs to be more thoroughly investigated. This means updating the outdated laws and regulations to specifically target white collared crime. Such as in the case of Skilling vs. United States, as described by New York Times article, terms like bribe and kickback need to be properly defined to adapt to modern situations. The mail and wire fraud statutes can only serve as a temporary relief to prosecute the cases that skew the lines of insider trading. The idea of increasing the number of dedicated FBI agents and federal prosecutors is also a feasible strategy. Whatever the strategy, the focal point needs to be stopping the head of this wrong-doing. Preventing the operation from the top will definitely shut down everything below.

Insider trading is a problem. Though I am not entirely sure if this should be prioritized over all the other issues afflicting America. I do not know the extent of damage insider trading has caused and the consequences of fully combating insider trading. I’m interested in learning more about this topic and how it compares to other issues like income inequality and unemployment.

 

Jia Jun (Jay) Wu

Insider trading is defined as the trading of a public company’s stock or other securities by individuals with access to nonpublic information about the company. The definition sounds simple enough but in reality, insider trading is much more complex. Under restrictions and laws, insider trading has become much more difficult to determine. No more is it just between a company source and an outsider with blatant compensation for direct inside information. It’s become muddied with different levels of outsiders and harder and harder to prosecute the one company source.

In Mr. Kidney’s rant against the prosecuting practices of the SEC and DOJ, he brings up some very good points. While he has won many victories against accused defendants, most of them have been four or five times removed from the company source. Are these the people they really should be focusing on? The people who heard it from a friend of a friend of a friend of a friend of a friend? It sounds absurd. And to be using all this taxpayer money and resources to create a loose story? Mr. Kidney called it “legal fiction” with the emphasis on fiction. If a former SEC lawyer barely believed in the stories he fabricated, how can the entire system just go along with it?

The SEC and DOJ are notable government organizations but they are bureaucratic nonetheless. They are boosted by numbers and the employees are boosted only by following those numbers. It’s a shame to read about “window dressing” cases where the SEC prosecutes old and irrelevant cases in order to raise their numbers. It’s similar to stop and frisk in police enforcement. Many officers have to meet a quota in the number of stops and arrests they had to make per month. If they didn’t make it, they would be given poor evaluations and possibly denied benefits such as vacation days. As a result, this increased the number of stop and frisks, especially on African Americans and Hispanics, in order to reach those quotas. In this case, boosting numbers of cases is harming those who barely had a hand in insider trading like the high school dropout that Mr. Kidney prosecuted. Numbers don’t equate change and most of the time it harms those it’s supposed to help.

In the article in New Economic Perspectives, the author is evidently furious with the Second Circuit’s decision. I think, if I didn’t read Mr. Kidney’s speech first, I would’ve been furious alongside him. However, this gives the SEC and DOJ less catering to lower end insider trading cases and more resources on the high profile cases against senior officers. This means more effort in going after those “penthouse floors” that Mr. Kidney stated. However, this decision does not make it any easier in prosecuting those officials. They can still hire the most elite lawyers and they can still claim plausible deniability.

Do you prosecute a bunch of “broken windows” to send a warning or do you prosecute that one penthouse floor to really get your message across? I say that penthouse floor, especially in the long run. Sure, it uses more resources, more time, and more manpower. But it also gives more press coverage, more assurance, and more confidence to fair investors. If such a big fish can be caught by the SEC, all the small fish will be terrified automatically.

 

Stella Kong

The articles today focused on insider trading, using information not disclosed publicly to gain some sort of advantage. It is illegal in the United States but the articles attack the insider trading laws. The main criticisms include focusing too much on minor issues and shying away from major cases as well using antiquated laws.

The first article talked about United States of America v Todd Newman, Anthony Chiasson, a case about insider trading that went the way of the defendants. The way I understood it, the court basically ruled that the defendants did not know the insider who leaked the information and were several levels away from him, therefore they are not guilty. Like I said, this is how I understood it so I may be completely wrong, but I do not agree with that decision. I do not think having a weak relationship to an insider should be dismissed if you gained from it and these guys got a lot of money in this deal. It was mentioned in the second article, that this case sets a precedent and an plan on how to commit the perfect crime. By using cutouts, middlemen of sorts, you just isolate yourself away from the insider and you cannot be prosecuted. This gives wall street guys complete immunity. I understand that the burden of proof should always be on the prosecution, but why do need to make these cases even harder? Wall Street people are experts at networking and are full of selfish, corrupt businessmen who would be thrilled to trade inside info. It is the perfect environment for this stuff to happen and now the court upholds this.

One criticism of the law seems to support the decision for the case mentioned previously. The articles said that insider trading laws are embracing the broken window theory. By trying small or minor crimes, they can stop the development of a crime-ridden society and discourage larger crimes. James Kidney believes that the theory leads to wasting a lot of money and time. He says most of the people he winds up prosecuting are very far removed from the case and are usually middle class people who have no real impact on the market so prosecuting them is not worth the insignificant damage they may cause to the market. I want to say I agree with James Kidney because prosecuting common folk who happened to some minor insider trading is a waste of time. This is why the criminal justice system highly encourages plea bargains. Going to court is expensive and no one wants to waste that money over some guy fighting against a speeding ticket. But I do see how allowing minor crime perpetuates a steady stream of crime.

James Kidney also claimed that the laws are outdated. He criticized the language of the laws and I do agree with him. The stock market has grown to something unimaginable by law makers. Just like with a lot of laws, I believe they need to be updated. For me, one example is the right to bear arms. That amendment was ratified during times of turmoil and uncertainty because Britain had a giant colony right above America, which was still a new and weak country. Now we do not need for common citizens to carry guns because there is no imminent threat of invasion. And the environment of the stock market has changed so much, that we need different laws. But the only way I can see real, effective change is if the government dedicated a certain amount of time to simply focus on these laws. The perpetual gridlock of the U.S government makes me pessimistic about the prospects of changes to the law, at least in my time.

The main thing I took away was that the broken window theory is looking at the wrong thing. Rather than looking to punish minor crimes, it needs focus on attacking the people who cause real damage to the economy. The government cannot shy away from prosecuting them or else it contradicts one of its founding principles: equality under law. The rich cannot afford to get away with insider trading like Chiasson and Newman. Furthermore, minor cases of insider trading should not be the first priority of the government. This may seem like it is attacking the rich but the rich have power to bend the laws so the government needs to be tougher on them to be fair.

Fracking can be looking upon in two perspectives, as a way that harms the environment or bring a source of oil. As with every controversial issue, there are advantages and disadvantages. Some of the advantages include lower gas prices and secure gas supplies for the next 100 years. However, disadvantages include environmental hazards and climate changes.

When I read about the potential harm to the water source in New York, I automatically disapproved. New York City has one of the cleanest drinking waters as compared to other states. The Catskills reservoir system which provides drinking water without filtration for ten million residents in New York City. In addition to contaminating water sources, air quality would also be put at risk. A clean water source and air quality should be prioritized rather than a way to generate oil and make gas prices cheaper. In addition to this, other countries lack the benefit of drinking clean water and to decrease that amount would be even more risky. However, rather than ban fracking altogether; I believe there should be regulations in order to prevent irresponsible drilling. Similarly to the UK, which was mentioned by the BBC News article “What is fracking and why is it controversial,” UK imposes a mandatory license in order to be fracking, although not happening currently.

For Andrew Cuomo to ban fracking in New York State, it seems as if he’s doing it not for the right intentions, but for politics. The New York Times Article entitled “Citing Health Risks, Cuomo Bans Fracking in New York” mentions how he desires for a third of the votes that his Republican opponent received because of his opposition to fracking. He realizes the power that falls in the hands of environmentalists. He’s also gaining approval and trust from a lot of fellow New Yorkers as well.

However, since Andrew Cuomo did propose a ban, when he leaves office, what would happen then? The ban could be lifted then. Fracking brings in a great amount of money for the United States and provide temporary jobs. However, this only brings short term benefits. In the long run, it would be damaging to the environment, which would cause for harm toward animals and other living creatures due to runoff, global warming, and possible sources of earthquakes. Not to mention, the extensive use of water used in fracking is very costly.

The harm that fracking would cause in this case, would indefinitely change the way people live and generate a higher number of illnesses, which would outweigh the benefits that it may lead to. Rather than focus on fracking, research can be put into other ways of generating a renewable energy source. In the long term, there needs to be better ways to generate enough energy for the society and relying on nonrenewable resources should not be the answer.

I think the Cuomo administration’s decision to ban fracking is a very smart move. The idea to improve the economies of upstate New York through the use of fracking is a risky approach we do not need to take. According to the NYS Department of Environmental Conservation, the NYC Watershed provides the largest supply of unfiltered drinking water in the United States. It’s connected to 19 reservoirs that stretch to 125 miles north of New York City. The potential risk in contaminating this water is dangerous. Oil is at an all-time low and is readily available to consumers, so fracking is not necessary.

The risk of water contamination is not the only concern. Some other factors of risk include spillage, land runoffs, contamination in crop fields, and air pollution. Spillage that leads to runoffs can possibly be more common than water contamination. Water runoffs on the land can be sudden and measures may not be readily prepared to contain it. Spilling into the surrounding environment can damage the natural ecosystem and could hurt our food supplies. Furthermore, the leakage of these natural gases can create a stronger greenhouse gas effect. I think it will take a substantial effort in both regulatory and operational action to minimize these risks to produce a net positive outcome. But if the companies are in it only for the money and politicians are seeking the path for most individual success, fracking could produce harmful results.

As to the concern of economic promotion, an initiative to enhance sources of renewable energy is fitting. Fracking is only a temporary relief. There could be a momentary boost in job growth, but I don’t see employment from these operations to be sustainable as we transition to other forms of energy. Research has shown that the supply of fossil fuels is running out. In addition, with harmful side effect like global warming, there should definitely be more alternative energy investments. Wind and solar energy programs could definitely be implemented so that new jobs can be created. This provides a long term solution in terms of meeting job growth and providing a new source of energy.

However, there are several arguments to support fracking. Using natural gases actually produces fewer emissions than coal. And while the renewable energy industry is growing, the development is not fast enough to meet demands. The scope of the physical area required for renewable energy is also underestimated by many people. Solar and wind power sources require a lot of space. An estimate shows that 496,905 square kilometers (slightly smaller than the surface area of Spain) of solar panels distributed in area with strong sunlight (Sahara Desert) can power the world. It’s ambitious, but we’re very far from it. So the current fracking situation could be viable.

My current stance seems to side with the opinions of many reports. I see it as a risk that pushed because of business opportunities. I think the science behind fracking’s benefits are strong, but a movement into renewable energy is the best long term solution.

—

Jia Jun (Jay) Wu

The popularity of fracking has increased over the years in many of our states. Fracking is essentially extracting natural gas using a high-pressured mixture of water, sand, and chemicals. It is said to create safety hazards in our water and atmosphere.  Many environmental groups and advocates have fought against the practice of fracking and Governor Cuomo took to their side with his recent ban on fracking in NY. With many other economic, educational, and environmental problems on hand, this is one step forward in the right direction.

Fracking is only a short-term relative solution for an alternative energy resource. The only advantages of this practice are for its high monetary value and its increase in energy resources. Even if there are more energy resources, they are not renewable or sustainable. In both the BBC and NY Times article, it is said that extensive fracking may cause water contamination, air pollution and small earthquakes. There seems to be no concrete evidence for the safety of fracking either. The risks out-weight the benefits here. There will also be a time when there will be no more gas to extract and we will need a new alternative solution.

I like the fact that the BBC article gives both the advantages and disadvantages to this controversial issue. Even here, there are more risks than benefits. It’s also interesting to see that there only a small percentage of companies fracking in the UK. This may be the result of having to get a license for fracking. I don’t see why the US doesn’t have a law like this to decrease the amount of potential companies trying to frack. However, you can see that there are lots of companies who are considering getting a license. Why are companies willing to destroy the environment for monetary gains when there are better alternatives?

I could see that people are more willing to accept profits now and pay for the consequences later, but the environment can’t be easily fixed. Fracking raises environmental costs where they need to use large amounts of water to be transported and used on fracking sites. It also damages nearby neighbors by causing climate change, air pollution, and water contamination. As what Dr. Zucker asked, who would want to live in a community where fracking is taking place?

Firms and governments should invest their money for the long term; in renewable sources of energy. We need to put our money in renewable energy research. Therefore, we can rely on efficient and sustainable supply of energy resources instead of fossil fuels. It’s great that fracking is banned in NY, but there needs to be pressure on other stares to do that same.

-JanYing He

Class 19: Fracking – Tradeoff of Wealth and Health

The issue of fracking is another typical example of a tradeoff between developing resources for wealth and preserving the environments for health. On one hand fracking offers great wealth and economic development for the parties of interest in the area, while also creating uncertain health risks in terms of health in the area. For politicians, such divide in the effects of fracking means that they have to weight carefully before deciding on a side to support. For Gov. Cuomo, we can only say that he took a conservative and safe way out of the controversies.

Maybe not to others, but for me, the benefits of fracking are much more realistic and conspicuous than the risks associated with the action. In today’s world, the great demand for energy has created such a great market for fuels, and fracking is a new way to provide the supply. Using the high pressure water drills, companies can reach deeper into the ground to exhume resources once too difficult to reach. Other than contributing to the energy need of a nation, fracking can make a once poor area instantly wealthy by providing it with a new source of natural resources. Compared to these conspicuous benefits of implementing fracking, the risks involved is much more unclear in the BBC article. While stating that chemicals used during fracking could cause underground water contaminations, the paper also cites how the professionals believe contamination practices are only result of bad practice instead of inherent issue with the technology. On the other hand, when mentioning the possibility of causing earthquakes, the paper also sites from a professor that it is an inherent effect of fracking and is likely to have very minimal strength. This contradicting method of describing the negative effects of fracking makes it seem that the article is intentionally alleviating their importance. While there is a clear criticism that fracking decreases incentive to develop renewable energy, one can’t help but feel that it fail to grasp the central issue that fossil fuels are also needed to provide energy to the research for renewable energy, at least until renewable energies can be used to replace it. While the paper is meant to introduce us to the concept of fracking along with its advantages and disadvantages, the conflicting words drawn to describe the disadvantages make it more like a promotional paper for fracking.

The decision to ban fracking in the State of New York seems more to resemble a political consideration of Gov. Cuomo than a consideration of the tradeoff between the values of health and wealth. The issue with Gov. Cuomo’s decision to ban fracking is that he is doing it as a political decision rather than a consideration of the tradeoff between the benefits and risks. Like the article suggests, Gov. Cuomo started to oppose fracking after a political opponent who opposes fracking received an advantage in the last election over the issue. While the governor claims to be taking advice from the state health commission that fracking poses great and unknown risks to the environment, his actions is still against his claimed priority of economic growth. Risks are still just risks; they are not inherent negative effects no matter how great they are. All investments and developments comes with a certain degree of risk, which can be diminished using proper controls as fracking professionals have claimed in the BBC article. There is no reason that the governor wouldn’t know that, so I can only assume that the governor is taking the conservative position to prevent a potential political loss before going for a political win. The governor should remember that elected officials have to go against the will of the majority of the population from time to time, as people don’t always understand what is good for them. This is the time when the more knowledgeable leaders have to step in and guide the people to the right directions. To me, Gov. Cuomo seems to have failed in this instance to be a force of correction and was carried away in the wave of opinions by the majority.

The greatest issue with these articles is that when they state the disadvantages of implementing fracking, they lack solid examples. The BBC article contradicts its claim of disadvantages with statements from professionals that claims the disadvantages to be insignificant or a result of human error instead of the procedure itself. On the other hand, the New York Times article simplified the disadvantage to a mere four-word statement of “significant public health risks”, while failing to display any details. There has been fracking occurring in many states already, so if there really are disadvantages we should be able to draw them from observing the fracking operations that already exist. Are there examples of the disadvantages of fracking in the area of operation of already existing fracking sites? Are these risks lessened from one site to the other with differences in controls? Are these risks significant enough for people to give up the resources reachable by the mean of fracking? Without any solid examples from existing fracking operations, these articles are very unlikely to convince people that fracking contains inherent risks that overweighs its benefits.

There is no doubt that there are risks involved in the practice of fracking, just like every other forms of developing natural resources. While facing such a situation, we should ask for ways to contain the risks and develop the resources safely, not shun away from the practice completely. It’s illogical to give up definite profits for potential risks that can be contained to an acceptable level or even eliminated. In the case of Gov. Cuomo, I can only say that he failed to serve the purpose of elected officials as a beacon for people to direct them in the right path of the mind.

The two articles from BBC and The New York Times primarily discuss the environmental issue of fracking, and how people have reacted to its use and potential for being an alternative to oil. The two publications rarely spoke of the major effects that fracking can have to residents living nearby fracking sites, and how fracking companies take advantage of residents for their mediocre conditions. So the main question I have is, how is fracking related to income inequality?

I remember watching a documentary about the issue, I believe it was Gasland directed by Josh Fox, which focused on fracking sites especially in West Virginia. The families living near the area were low income, not to say in the middle of nowhere, so they had little say and ability to communicate what they felt about fracking. I distinctly remember a scene where Fox visited a home near the site. One of the residents turned on the water faucet, and held a lighter to the water. The flowing water started blazing fire, which proved that natural gas was leaking from the fracking sites into home water supplies. Additionally, the water was not close-to-clear liquid as we fortunately have in the city. Rather, the water was murky brown to black.

Many of the civilians that Fox interviewed complained that they began getting severe headaches and other unusual symptoms after the fracking companies established themselves in the communities. Surely if they were drinking natural gas infused water and showering in it as well, health problems are bound to occur. In BBC‘s article about fracking, another water-polluting substance would be the carcinogenic chemicals that are used in the process of fracking. Residents living by fracking sites would have higher risks of getting cancers!

The documentary continued to illustrate the severe inequality between civilians and fracking companies when Fox followed a group of residents that went to the court to protest against the presence of the natural gas companies. Their protest was received with no avail, and that highlights the imbalance of powers based on financial, social and political presence. Thankfully, The New York Times article is good news to the progress of restricting fracking. Governor Andrew Cuomo’s ban on fracking in New York State is a major breakthrough, since natural gas companies have had high stakes on our state’s massive natural gas supply.

Fracking is definitely not a feasible alternative for energy resources because it impacts public health in an enormously negative way. The documentary also mentioned that the West Virginians living near the site were not the only ones who have been affected by fracking. Since natural gas and the chemicals that were used to extract the resource have infiltrated into nearby water supplies, the deleterious substances could even contaminate New York’s water. We would all be affected. Also, just to point out the low efficiency of natural gas, this energy source provides much less power than oil. Larger amounts of it is required in order to produce the equivalent amount of power that oil has provided. The process of fracking is extremely dangerous and tedious, so the cost of extracting is high on several levels.

Back when the documentary took place, fracking companies were bullying neighboring residents for their lack of resources to fight them. Hopefully more people, not only those who have already been directly affected, could speak up and stop the development of fracking, which has already led to enormous environmental and health destruction.

“Fracking” has been a hotly debated issue in the news recently, spurring a flurry of opposition from environmental activist groups and support from numerous energy companies and lobbyists. I have heard and read various articles that explains how it can help the economy and energy needs of different countries, but is detrimental to the environment. The BBC News article “What is fracking and why is it controversial?” provides an excellent summary of what fracking is, why it is so controversial and the advantages of the activity to the economy. Usually when I think of oil drilling, I either think of wells and rigs placed in various parts of the ocean or in urban areas out in the west. Interestingly, “fracking is the process of drilling down into the earth before a high-pressure water mixture is directed at the rock to release the gas inside.” Just the thought of a well drilling horizontally in a rock layer sounds quite alarming and harmful to the environment around it. Indeed, it is controversial due to the fact that it can cause small earthquakes, and that it injects potentially carcinogenic chemicals to extrapolate the gas and oil. This can pollute the groundwater around the site, and may pollute the drinking water for nearby inhabitants as well.

As for the advantages of fracking, it seems to only benefit the energy companies and the economy of the countries where the reserves of shale gas are located in. Its common news now that Brent crude and WTI prices have significantly reduced due to lower global demand and higher supply. The increased supply is in part caused by the significant increase in oil production by the US, a positive result that can be traced back to fracturing as the US is becoming more energy independent. Unfortunately for the environment, fracking “is estimated to have offered gas security to the US and Canada for about 100 years”, which is an extremely hard offer to refuse. In fact, whenever I discuss energy related topics in my finance and accounting classes, there hardly ever seems to be a mention on the corporate social responsibility or environmental impacts of oil production. There is however, always a discussion on how the US is benefiting and the only harm being done is to large energy companies such as Chevron Corp, Royal Dutch Shell, Halliburton and Baker Hughes regarding low oil prices.

I could also imagine that fracking alleviated economic troubles in different US states, providing yet another incentive to allow hydraulic fracturing activities. It is definitely great news then for NY state inhabitants, environmental and liberal groups that Governor Andrew Cuomo banned fracking in all of New York. As great as fracking could be economically for upstate New York, I definitely do not want NY state’s groundwater to possibly be polluted by dangerous chemicals. Upstate is a very attractive area for this type of oil and gas drilling because the Marcellus Shale runs through a part of NY, along other states such as Ohio, Pennsylvania and Virginia as well. It is a gas-rich rock that has provided a great amount of energy for profit-hungry energy companies. But at the same time, it is not so surprising that a health study on fracking found it to have “significant public health risks”.

It is because of these kinds of risks that 63% of the Marcellus Shale is fortunately off limits to drilling. Interestingly, Joseph Martens, the state environmental conservation commissioner has stated that “The economic benefits are clearly far lower than originally forecast.” I would definitely want to read more about a cost-benefit analysis on fracking, although I could imagine it would be hard to quantify the expenses related to harming peoples’ lives with fracking pollutants. I actually think it’s crass for Koren Moreau, the executive director of the New York State Petroleum Council, to say that Cuomo made the decision so that he could “align himself with the left (political party)”.

Moreover, it’s just morally horrendous that Moreau says “Our citizens in the Southern Tier have had to watch their neighbors and friends across the border in Pennsylvania thriving economically. It’s like they were a kid in a candy store window, looking through the window, and not able to touch that opportunity.” As much as it is financially beneficial to the state, that statement is just preposterous and gives absolutely no hint of care for the people whose health is signficiantly harmed due to fracking. Hydraulic fracturing seems much more dangerous than some innocent candy store, and needs to be investigated much more than the government and environmental groups are currently doing so. The public needs to obtain facts on what chemicals are actually being used and what the effects are on the human body. We also need to eventually calculate the true costs of fracking, a topic which will definitely be debated as much as the subject of fracking itself.

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