Posted: Wednesday, December 12, 2012 12:51 PM ET
Fracking has been among the most hotly debated topics in the energy sector in recent years. The technology has made it easier than ever to pull natural gas out of the ground, mainly a result of new fracking technology, but environmentalists have been upset about pollution of air and groundwater that they believe is created by the fracking process.
No one will deny that fracking has had some pollution problems. Even those who are in favor of fracking will admit that there have been problems, but fracking is getting safer.
Just a couple of years ago, most of the fracking was done by wildcatters, which definitely raised the chance of accidents taking place. Now we are seeing a new phase, where companies such as Exxon (XOM) and Chevron (CVX) are getting involved. These are much larger players who you would think would be more responsible.
The most notable positive impact that increased fracking is having on the environment is lower greenhouse gas emissons. A new report shows America’s greenhouse gas emissions have fallen to levels not seen since 1992.
There are a few reasons why greenhouse gas emissions have fallen. The slower economy has resulted in lower energy demand, but the increased use of natural gas has also played a major role, and is expected to continue doing so in the years ahead.
The success of fracking and the ease with which previously unreachable supplies of natural gas can be pulled from the ground has caused prices to tumble here in the U.S. These low prices are a major reason why we are seeing natural gas replace coal as a leading source of electricity.
The more coal that is replaced with natural gas the better. It has been shown that electricity that is produced from natural gas produces 43% less carbon dioxide than the same amount of electricity produced with coal.
With any type of energy, there are going to be risks and side effects, and fracking is no exception. Without the proper safeguards in place, it can have serious environmental impacts.
Natural gas usage will continue to rise, especially if prices remain as low as they currently are. America has a huge supply of natural gas, and until we see better ways to export this natural gas, the bulk of the supply will remain here and keep prices low. One company trying to boost the nation’s natural gas exports is Cheniere Energy, Inc. (LNG) which is building an export terminal in Sabine Pass, La., which could reduce natural gas stockpiles in the U.S.
It needs to be done with care, but fracking is a good thing. In the long run it will help not only the environment, but also the economy. It will create jobs, and will lessen the America's dependence on foreign oil.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors.
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