Why the Fracking Boom May Actually be an Economic Bubble
It might be too soon to put all our eggs in the fracking basket.
Fracking proponents like to use an evocative economic metaphor in talking about their industry: boom. The natural gas boom. Drilling is exploding in North Dakota and Texas and Pennsylvania. Only figuratively so far, but who knows what the future holds.
The Post Carbon Institute, however, suggests in a new report [PDF] that another metaphor would be more apt: a bubble, like the bubbles of methane that seep into water wells and then burst.
PCI presents the argument in its most basic form at ShaleBubble.org:
[T]he so-called shale revolution is nothing more than a bubble, driven by record levels of drilling, speculative lease & flip practices on the part of shale energy companies, fee-driven promotion by the same investment banks that fomented the housing bubble, and by unsustainably low natural gas prices. Geological and economic constraints — not to mention the very serious environmental and health impacts of drilling — mean that shale gas and shale oil (tight oil) are far from the solution to our energy woes.
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