Fracking: Frequently Asked Questions (FAQ)

The world has seen numerous revolutions in the energy industry over the last few centuries. We are producing and consuming unprecedented levels of energy. The rate of technological development is also startling. Even much of the developing world has access to modern energy sources; sources which only several decades ago were just being tapped. Perhaps the most amazing aspect of all this is the fact that despite the increasing demand and consumption, energy continues to be available at relatively stable prices. What's more, we've been told time and again that the world is running out of energy sources, specifically carbon-based fuels. So where is all of this energy coming from?

In the United States a lot of our energy comes from natural gas. And more and more of this is being collected by hydraulic fracturing ("fracking"). The controversial new process has created a massive boom in the previously dying natural gas industry. Though having been around for decades, new innovations in the technology have resulted in some experts claiming that natural gas could alone power America for centuries.

There are, however, downsides. Fracking has raised alarm among many environmental organizations and now faces increasingly strict regulation. Indeed, the consequences of the process are still quite unknown.

Yet, alternative energy sources are not yet sufficient to power even a fifth of America's energy demands. Nearly everyone would like to see the world move away from fossil fuels, but for the time being, they are necessary. As the price of oil soars and U.S. relations with some of the top oil-producing nations remain tense, some have heralded fracking as a monumental breakthrough in the energy industry. Most importantly, it would be able to keep prices reasonable for the average American. This FAQ looks at how fracking works, its history, and the debate surrounding it which has become a primary political issue in many states across the country.

1. What is the history of fracking in America?

Technically, the basic concept behind fracking has been used for over a century. Using a procedure which was then called "shooting," individuals and companies searching for natural gas and oil used to use nitroglycerin explosions to expose underground reservoirs. In fact, a Civil War veteran received a patent for the "exploding torpedo," later known as the "Roberts Torpedo," in 1865. The idea actually came to the former Colonel during a Civil War battle as he observed artillery shells splitting the ground open. Colonel Roberts' new device was wildly successful and made him a fortune, as some wells saw increased production of over 1000%. Below is a sketch of Roberts' "torpedo" patent.

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Roberts' invention set the groundwork for a company that still lasts today. Though the explosion techniques was refined and advanced, the basic concept remained the same. Now under the name Tallini and Otto Cupler Torpedo Company, nitroglycerin is no longer used, but the company is still in the fracking business.

Commercial fracking began to expand in the 1940s after Halliburton invented the modern fracking rig. Soon thereafter the process spread throughout the country. By 2010, about 2.5 million wells had been fracked with this technology. Because this technique does not use explosives, it quickly replaced most fracking which involved detonations. Moreover, natural gas consumption has increased to about 23% of the world's total. The Energy Information Administration (EIA) estimates that total natural gas consumption will increase by about 50% by 2035.

By the 1970s, in the midst of an energy crisis in America, fracking began to get more noticed. President Carter announced that the country was running out of natural gas. At the same time, the Eastern Gas Shales Project showed that, as natural gas entrepreneur Dan Steward said, "[There is] a hell of a lot of gas in shales." Since Steward's blunt announcement, fracking shale formations has provided America and the world with vast amounts of natural gas; so much gas, in fact, that prices have begun to plummet to levels which just a decade ago seemed impossibly low.

Though fracking has a long and colorful history, modern fracking techniques are quite new. The new fracking rigs are much more powerful and the projects are on a far larger scale.

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2. How does fracking work?

Fracking is the common name used to describe the process of hydraulic fracturing. The technique is used to extract natural gas, and less frequently petroleum, from deep below the earth's surface. Despite it being the current buzzword surrounding America's natural gas and oil companies, the process was invented in the 1940s and patented by Halliburton. Further development of the technique has opened the door to deeper reservoirs and other areas which were previously deemed to be unreachable. High-volume fracking, to be discussed later in this FAQ, was not developed until the 1990s and is the target of the most criticism.



Fracking targets natural gas contained in two types of rock - shale formations and coal beds. Normally, natural gas is collected by trapping it following its release from naturally occurring fissures in the rock. But the most heavily concentrated and richest natural gas deposits are found in reservoirs deep in the earth and thoroughly protected by thick shale rock.

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Natural gas is primarily methane. Indeed, once the gas gets to your home for use, it is almost pure methane. But the initial composition usually contains several other gases.



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As the technical name suggests, fracking consists of injecting a liquid at extremely high pressures causing the rock to partially split. Once the fissures in the rock are large enough, the natural gas can leak upwards to be collected and stored.

The process begins by installing the first drill to create the main wellbore (the hole). The initial wellbore is rather superficial. The majority of the drilling is actually done by the liquid pumped into the rock. This liquid is continually injected into the rock until the fissure is both wide and deep enough. In order to facilitate a continual release of natural gas some sort of solid solution, usually sand, is injected following the liquid. This solution, called a proppant, keeps the fissures from closing back up.

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Fracking was designed to reach natural gas in some of the more remote geologic regions. Some natural gas rigs drill miles beneath the surface. Fracking wells are usually bigger and deeper than traditional natural gas wells. Fracking rigs typically are between one and four miles deep. Moreover, the rigs are able to drill at many different angles. Unlike a traditional drill which could only move vertically, these new rigs can drill horizontally, vertically and diagonally. This maximizes the amount of shale formations that can be fracked while minimizing the total area above ground taken up by the surface rigs. It also enables the rigs to reach natural gas that is contained under environmentally protected or other areas which are not accessible by conventional drilling. Currently, some rigs are able to drill up to two miles horizontally.

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3. How much water is used, and what composes the chemical solution used in the process?

The amount of fresh water used in this process is dependent on the depth of the natural gas reservoir and the structure of the rock. In general, far more water is used when drilling into shale as opposed to coal beds. The Environmental Protection Agency (EPA) estimates that fracking a coal bed uses between 50,000 and 250,000 gallons of water. Meanwhile, to successfully frack a shale formation, 1-8 million gallons are needed. According to the U.S. Department of Energy, fracking wells use an average of 2-4 million gallons. A single well can be fracked over a dozen times.

This massive amount of water is combined with multiple chemicals before being injected into the rock. Depending on the conditions of the shale which is being fractured, anywhere from three to twelve chemicals might be added to water in order to make the necessary solution. There are several reasons that these chemicals are added to the water. Often referred to as slickwater, the solution's most important fundtion is to reduce the friction along the fissure in the rock. Biocides are added to prevent contamination of the materials by microorganisms. Several acids are also contained in the solution, which are either for protection of the piping or waste from the wellbore near the surface. These chemicals usually make up 0.5% to 2% of the solution. Below is a look at the chemical composition of one fracking procedure in Arkansas, followed by a chart describing the most common chemicals used in the process.

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Here is one more chart looking at fracking additives, created by Exxon Mobil. Coined "fluid disclosure," the federal government recently began to require each gas company to reveal all chemicals used at each drilling location. Prior to this, despite scientists finding volatile organic compounds (VOCs) in fracking wells, there was no requirement for the gas companies to disclose the chemicals which were being used. 



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On top of the chemical additives, the fracking process also releases naturally occurring chemicals in the rock, including the radioactive elements, barium and strontium, as well as benzene, a powerful carcinogen, though generally only in trace amounts.

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4. How is the waste stored or disposed of?

This is one of the more controversial aspects of the fracking procedure. Fracking companies have two options when it comes to dealing with wastewater, or, brine: store the waste (the left-over chemical solution used to split the rock) in underground reservoirs, or bring it back to the surface and dispose of it aboveground. 



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Wastewater storage is currently under investigation by the EPA and is already heavily regulated. For instance, an above-ground storage facility must have capacity of at least 1,320 gallons. An underground storage facility must be at least 42,000 gallons.

Underground storage is becoming more popular. After years of polluting local streams, rivers, and lakes, gas companies are now forced to properly dispose of the wastewater. The wastewater is extremely difficult to treat adequately, so long-term storage is often the easier route. These underground chambers can be well over a mile deep. One plant in Ohio, opened in 2011, hopes to be at the forefront of a new, lucrative industry. Given the increasing amount of fracking, brine storage could become a blossoming business. Indeed, off-site and out of state garbage dumping has been a profitable business for years, albeit not usually popular with the local population.

 



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Underground storage of toxic waste has been a common practice for decades. The most common form of disposal for nuclear waste has long been underground disposal. Sewage is of course commonly stored underground, although generally not for long periods of time. Some sites around the country have accumulated millions of barrels of waste over the last several decades. These wells are not intended to last forever. Thus far, there have been no significant leakages detected. But some are concerned about problems arising in the long-term.

Natural gas companies must also collect and store any air pollutants produced during the process, most notably benzene. Under the Clean Air Act (CAA), any "hazardous air pollutants" (HAP) must be captured and broken down. The Occupation Safety and Health Act (OSH Act) of 1970 established the Occupational Safety and Health Administration (OSHA) as well as certain regulations for storage and disposal of potentially harmful waste.

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5. What is the history of governmental support for natural gas and fracking?

The natural gas industry as a whole, as well as fracking specifically, have been federal subsidized for decades. Accessing deep gas deposits beneath thick layers of shale is an extremely difficult process. Though fracking technology didn't originally receive government support, the federal government began to invest in the technology following increased levels of lobbying for financial support throughout the 1970s and 80s. This continues today.

The first large-scale federal investment in shale gas occured in the 1960s. The U.S. Department of Energy and the Atomic Energy Commission worked together in detonating underground atomic bombs in New Mexico and Colorado. The bombs succeeded in cracking the shale and releasing the gas, but the project was quickly abandoned due to concerns over the levels of radiation.

Several years later, the first hydraulic fracturing (the form of drilling that we refer to as "fracking" today) was completed. It was a far too costly and massive undertaking for an individual company at the time to carry out. Because the Department of Energy saw the potential in this new process, fracking companies enjoyed continuing financial support from the federal government. Without this support, some argue, the industry would not have been able to survive and succeed today. As one proponent of energy subsidies argues:

"Private firms are really good at small, fast, smart, and cheap, but they mostly don’t do big, slow, dumb, and expensive, because the benefits are too remote, the risks too great, and the costs too high. But here’s the catch. You usually can’t do small, fast, smart, and cheap until you’ve done big, slow, dumb, and expensive first. Hence the reason that, again and again, the federal government has played that role for critical technologies that turned out to be important to our economic well-being."

The recent success of the natural gas industry has many hopeful that forms of renewable energy might take a similar route. Like fracking in its early years, these energy sources are thus far inefficient and small-scale, but continue to receive federal money in order to increase research and development with the goal of eventually creating cheaper, cleaner, and safer forms of energy.

Indeed, natural gas followed a similar path. As mentioned earlier, the natural gas industry was in a seemingly inescapable lull in the 1970s, just prior to receiving significant government support. The Eastern Gas Shales Project began in 1976 and changed the future of natural gas. By the mid-1980s natural gas production began to steadily rise.



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The man widely credited as being the pioneer of the fracking industry, George Mitchell, was well known throughout the 80s and 90s for petitioning the federal government for increased support. On the heels of the success from the Eastern Shales Project, Mitchell was able to garner the aid of the Department of Energy, Sandia National Laboratory, and the Gas Research Institute. Mitchell's company was finally able to hone the technology needed to drill both deeper into the earth as well as horizontally, two vital steps in making fracking an extremely efficient and lucrative procedure. Moreover, it was through this project that microseismic imaging was developed, allowing natural gas prospectors to get a much more detailed and accurate picture of the shale formations and natural gas reservoirs.

In 1980 the Section 29 tax credit for "unconventional gas" companies was started. This tax credit led to tripling in production of nonconventional gas. According to the U.S. Department of Energy

"The incentive provisions of the Section 29 tax credit were designed to reward efficient unconventional gas development and performance. During a time when national average wellhead natural gas prices were between $1.50 and $2.50 per Mcf, the tax credit for tight gas was about $0.50 per Mcf and for gas shales and was on the order of $1.00 per Mcf for coalbed methane, adding considerable economic value to the efficient production of these resources. The tax credits also helped justify the high investment needed for initial infrastructure."

This report also argues the the initial support through these tax credits and subsidies allowed the industry to construct the infrastructure base, so that even with diminished federal support, the industry would be established enough to survive and, hopefully, thrive. This is of course the stated goal of any federal support for energy.

One of the more recent breakthroughs in fracking technology came in the late 1990s. It was then that the chemical solution, "slickwater," was officially developed and put into use. This formula is vital in quickly and thoroughly creating fissures in the rock, while also keeping the cracks wide enough for the gas to leak upwards. Prior to this breakthrough, slickwater research had been the recipient of federal aid for over 25 years. It is new technology such as this which has the potential to make huge impacts on any energy industry.



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Some argue that this technology would have emerged without any federal support; hence, the belief that renewable energy should not receive government subsidies, or at least less than the industry is currently receiving. Yet, because no fracking company has existed without being subsidized, others believe this argument cannot be substantiated. The former Vice President of Mitchell Energy, Dan Steward even acknowledged the role of federal support in developing natural gas: "They did a hell of a lot of work and I can't give them enough credit for that. DOE (Department of Energy) started it, and other people took the ball and ran with it. You can't diminish DOE's involvement." Steward went on to add, "Government has to be looking down the road. We really cannot wait to develop those other energies. Industry doesn't look as far down the road as the government should."

In 2011, the New Alternative Transportation to Give Americans Solutions Act (NAT GAS Act) was proposed. This would grant billions of dollars to the development of vehicles run on compressed natural gas. Again, just like those arguing on behalf of solar or wind power, NAT GAS supporters have claimed that the bill will add thousands of jobs, cut energy prices, and lessen America's energy dependence.

President Obama has openly supported government subsidies for natural gas and fracking, taking credit for its recent successes. And like his support for "clean coal," Obama's support for subsidies for these fossil fuels has drawn criticism from many supporters of increased renewable energy. Meanwhile, others have criticized the President's support for the alternative energy sector. The history of government subsidies for energy research, development and production makes the current discussion very complicated and reveal the many nuances behind it.

The recent boom in natural gas and fracking in light of significant government support help make the debate over the government's role in energy very interesting. The key, however, in this debate, as in most debates, is finding consistency. All forms of energy in America have long been subsidized. Should this continue to be the case? There have certainly been successes and failures in all energy fields. But would America be better off with less regulation, fewer subsidies, but increased risk? When attempting to come to a conclusion over this, it is crucial that the full history be examined and assessed. The current state of affairs does not provide sufficient evidence for a conclusion to this question.

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6. What areas in the United States are ideal for fracking?

A distinction must be made between natural gas production in general versus shale and coal bed natural gas production, using fracking. First, here is a map of the shale gas plays (areas that has been targeted as optimal for drilling) across the United States. Below is a second map showing the conventional natural gas fields in the United States.

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This next map distinguished between shale gas basins and Devonian shale. The latter is much more difficult to drill and has only recently begun to be tapped.

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Here is a look at the existing fracking wells, along with some future proposals. Several of the larger, established sites are often discussed in conversation surrounding fracking, such as the Marcellus and Barnett shale formations.

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Natural gas production has increased in most areas of the United States. In general, the best areas for production are parts of the Mountain West, Appalachia, and the southern Midwest. Below is a look at the highest producing states (the Barnett shale bed is in Texas and was the first modern-day fracking site, drilled by Mitchell Energy in the 1990s). Pennsylvania's Marcellus shale formation opened for drilling in 2010 and is one of the most discussed and controversial.

Despite heavy criticism, Pennsylvania saw the biggest percentage jump in total natural gas production between 2009 and 2010, nearly doubling.

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The United States produced over 24 Tcf (trillion cubic feet) of natural gas in 2011. The highest-producing states were Texas, Wyoming, Louisiana, Oklahoma, Colorado and New Mexico. These six states accounted for over half of all natural gas production in the U.S. The next chart shows the change in regional production between 2009 and 2010.



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Natural gas production has been expanding so rapidly that many international companies have rushed in to invest in individual companies.

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Offshore drilling for natural gas in the Gulf of Mexico contributes a significant amount of America's gas (1-2 Tcf/year), but sharply declined in 2011 following the BP oil spill and new regulations. In fact, fracking regulations both locally and federally have led to declines, though less drastic, elsewhere around the country.

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7. How much of America's natural gas comes from fracking?

In 2000, only about 1% of total natural gas production came from fracking. By 2010, that number had risen to nearly 20%. Some sources say that currently fracking accounts for nearly 30% of natural gas production. Still others claim that fracking is responsible for closer to 40%. These numbers can often become a bit hard to decipher because some sources cite the amount of natural gas from fracking, while others cite natural gas from unconventional methods in general. Fracking is included in unconventional methods, but extraction from tight sand is also included. Adding to the confusion over exactly how much natural gas fracking contributes is the fact that fracking is sometimes applied after initial, conventional drilling has already taken place. The amount of additional gas which is produced following the fracking procedure varies. Fracking is applied to about 90% of all wells in the United States.

Global energy demand is expected to increase by about 30% by 2040. Natural gas will most likely be the largest contributor to this rise, specifically gas that is produced from fracking. Natural gas produced from fracking is estimated to rise to over 50% by 2020. Moreover, the American Petroleum Institute (API) claims, "that if fracking were eliminated, natural gas production would fall 57 percent by 2018."

The natural gas industry currently employs 3 million people and adds nearly $400 billion to the American economy. Further, some have claimed that the current supply of natural gas reserves could power the country for over a century. The most recent estimates from the EIA claim that there are over 2500 trillion cubic feet of potential natural gas resources in the United States.

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Given these incredible facts, it is hard to believe that the industry will be completely shut down any time soon.

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8. Have other countries used fracking yet?

Fracking has quickly spread across the world. Canada has a huge shale formation throughout Alberta, while Europe also has some significant proven natural gas reservoirs.

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Fracking is currently in widespread use in Canada, the UK,  Russia, Australia, China, and India. Many other countries are in the process of building the infrastructure necessary for such a large-scale project. Meanwhile, France and Bulgaria have completely banned the practice. Below is a closer look at the recent developments of fracking in Europe.



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Many countries have been drilling for natural gas for a long time. Fracking the same areas will usually produce more gas. It is likely that most of the nations with such reserves will begin to frack in the near future if they haven't started already. Below is a look at the world's supply of both proven gas reserves (areas that have been determined to contain sufficient natural gas to justify fracking), as well as "recoverable" shale gas reserves (less is known about these reserves, making those sites unlikely to be drilled in the near future).

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As with oil reserves,the Middle East has the largest amount of proven natural gas reserves. Fracking proponents hope that the new technology will even the "natural gas playing field."  



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Finally, here is another look at the proven natural gas reserves on a regional and national basis. Click on the source to reach the interactive map and explore it yourself.

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9. What are some of the common criticisms aimed at fracking?

In the last several years there has been an amazing amount of debate surrounding the possible environmental implications caused by large-scale fracking. There have been numerous, large demonstrations around the world against the expansion of fracking. In 2011, the New Jersey legislature voted to outlaw fracking. Though the bill was vetoed by Governor Chris Christie, he still instituted a 1-year moratorium on fracking while the process went under investigation. Meanwhile, the legislature, as of 2012, was attempting to override his decision. Other states have also put moratoriums on fracking while the long-term risks are being assessed. Elsewhere, France and Bulgaria have both banned fracking nationally, the first nations to do so.

Given these recent trends, the future of fracking is very much up in the air. So what exactly are the environmental concerns which are driving so many people against fracking? Below is a list of the main issues brought up and some specific instances which are used to support the concerns.

Water Contamination

Opponents to fracking argue that water contamination will greatly increase in areas near the the natural gas drills. There are two main sources of potential contamination of the water table: (1) excess methane released during the process which is not captured and brought to the surface; and (2) the chemicals used in the slickwater solution escaping the casing of the well.



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Numerous cases around the country have been brought to the public's attention. Some people have reported finding sand and dirt, grease residue, and increased levels of methane in their drinking water. In several instances, most famously in a scene of the 2010 documentary GasLand, homeowners are able to light their tapwater on fire due to high levels of methane.

The fracking rigs are designed to keep both the excess methane and the used slickwater safe from the water supply. These wastes are either brought back to the surface and stored above-ground or are left in a sealed underground reservoir. But there have already been several instances of wastewater leakage or spills. Moreover, little is known about the lifespan of the underground containers. Eventually the toxins could escape the reservoirs and possibly reach the water table. 

The process of fracking also causes the release of several naturally occurring radioactive elements in the rock. These elements can easily be brought to the surface along with the natural gas. Some companies carelessly store these chemicals, increasing the risk that they reach local streams or rivers, contaminating the water supply from above. There is also the argument that there is currently not nearly enough accountability in the fracking industry.

The huge Marcellus shale wells (4,000 have been built since 2008) have been linked to the most water pollution.

In 2008, local residents were warned not to consume the tapwater due to dangerous levels of toxins. Though not confirmed, the toxins are believed to have originated from local fracking wells. The steel and concrete casings of the fracking well are quite resilient but do not guarantee protection against leaks. One of the freshest rivers in America, the Delaware River in eastern Pennsylvania, is now listed as one of the most endangered due to nearby fracking in the Marcellus shale field. Millions of people get their drinking water from the Delaware River, and there have already been numerous cases of contaminated tapwater in the areas that have been linked to local fracking wells.

Despite water pollution standards and regulations set by the EPA, groundwater contamination can still occur. One of the largest natural gas companies, Chesapeake Energy in Oklahoma, was fined several hundred thousand dollars for water pollution. The EPA is currently conducting multiple studies regarded the matter; yet they do not expect to release the results until 2014. According to preliminary reports, fracking wastewater contains excessive levels of total dissolves solids, fracking additives in the slickwater, toxic metals, and radioactive elements. Furthermore, there are currently no regulatory standards for the disposal of fracking wastewater, and many local treatment and waste facilities are ill-equipped to handle the chemicals.

In Wyoming the small Wind River Indian Reservation began to have increased water pollution following the construction of dozens of fracking rigs nearby. Residents claim that this has been happening for years. Though many in the area support drilling, they are arguing for more stringent regulation to protect the groundwater. In 2011 the EPA conducted a full investigation into the matter. Residents near this rig as well as others have reported increased levels of cancer, liver and kidney problems, and neurological disorders. The Wyoming case is unique because the natural gas sits far closer to the surface than typical shale gas formations. Because of this, universal laws and regulations are not sufficient. More case-specific judgment is necessary.

Finally, though fracking companies have recently been forced to give full chemical disclosure of the slickwater used ("fluid disclosure"), this still does not prevent them from using the chemicals. Toxins are being pumped into the ground across the United States. It took years for the EPA to require full disclosure of the chemicals used in the process. Prior to this, the oil and natural gas industries were the only industries exempt from such a requirement. This was coined the "Halliburton Loophole," so named because of suspicion that former Vice President and Halliburton CEO Dick Cheney, played a key role in keeping the EPA out of regulating this aspect.

Air Pollution

Air pollution has also been a concern due the release of greenhouse gases during the process. Fracking companies are able to capture the majority of the methane that rises toward the surface after fracking, but a significant amount still escapes. Though the quantity of methane released is far smaller than carbon dioxide from a typical industrial plant, methane is a far more potent greenhouse gas. There have been several studies done recently comparing the air pollutants of fracking and coal. Experts have estimated that about 2% of the natural gas which is extracted is not successfully captured.  Fracking also releases volatile organic compounds which are the main source of urban smog. Several types of confirmed carcinogens are also expelled in the waste. Most of this pollution occurs after the well has been drilled but before it is properly hooked up to transport pipes.

Earthquakes

There has been an increasing number of small-scale earthquakes in areas surrounding fracking rigs. The wells are dug so deep and with such force, that actual earthquakes, though small, can result. The underground disposal units are also generating concerns. They have been linked to larger earthquakes, including over ten in 2011 near a large Ohio rig. There have been similar reports in Texas, Oklahoma, Colorado, and Arkansas. NPR correspondent Christopher Joyce sums up the difference between the two types of earthquakes:

"Hydraulic fracturing pumps a lot of water underground, where it's used to crack the rock and liberate gas. This may cause tiny quakes, but fracking goes on for a day or two, and the quakes are small.

Recent quakes reported in Ohio and Arkansas are associated with wastewater wells, not fracking wells. The water first used in fracturing rock is retrieved and pumped into these waste wells, which take in lots of water. And at more than 9,000 feet deep, the water is under high pressure that can build up over months or years. It's this pressure that can actually create earthquakes."

Ohio has opened numerous facilities across the state to house the wastewater from fracking wells in nearby Pennsylvania. Though the state gets compensated nicely, the pollution and earthquake worries have forced the state to temporarily suspend further fracking waste disposal. There are alternatives for disposing the toxic water, but surface storage or treatment is very expensive and, in many locations, not possible. Seismologists can also scout certain areas to find an optimal location for the wastewater reservoirs, but the process currently costs $10 million for each well.

Waste of Freshwater

Each large-scale rig uses millions of gallons of freshwater to frack the shale just one time. This water cannot be recovered because it is mixed with numerous toxins. Therefore, if fracking were to continue at its current rate or increase, hundreds of billions of gallons of freshwater would be lost every year. According to estimates in Pennsylvania, the site of a large section of the Marcellus shale fields, the natural gas industry uses 1.9 million of the 9.5 million gallons of water used in the state every day.

Mineral vs. Surface Rights

One problem for individuals with natural gas beneath their land has been the issue of mineral rights. Mineral rights differ from simple property rights. In fact, when a property is sold, the mineral rights can, and often are, held by former landowners. Because of the possibility that the land contains valuable natural resources, owners of mineral rights do not often want to sell. In most areas of the world, the government owns all mineral rights, but in the United States landowners own the ground beneath and air above the surface of their property.

But because the mineral rights are often more valuable than the surface rights, there have been numerous occasions in which the mineral rights owner is compensated far more lucratively by fracking companies than the surface rights owners. Meanwhile, it is the landowners that have to deal with any pollution issues. Many have complained about this process, arguing that it is unfair to the landowners. Moreover, in some instances, the homebuyers are not informed that the owners of the mineral rights intend to lease the rights and allow drilling. In North Carolina, the nation's largest homebuilder, D.R. Horton, is building homes without granting the homeowner the mineral rights. The company then transfers the rights to its subsidiary, DRH Energy. Drilling the property can not only be a significant nuisance, but it can also greatly reduce the value of the property.

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10. What do fracking's proponents say?

All of the vigor and passion seen in recent protests against fracking is equally matched by its supporters. The natural gas industry has been growing at an incredible rate since large-scale fracking began. Meanwhile, the price has plummeted and the natural gas consumed in America is now largely domestically produced. Fracking has enjoyed the support of politicians on both sides. Several states have seen significant booms in spite of the national economic difficulties. In many ways, natural gas in general, and fracking in particular, have revolutionized the energy industry in America. Below are several of the main reasons that so many Americans still support fracking.

Energy Prices

The price of natural gas has fallen to levels that just several years ago were unimaginable. The breakthrough in natural gas technology and production began around 2000. Since that time prices have fallen from around $15 per million British thermal units (Btu) to under $3/million Btu in early 2012. The percentage of natural gas which is derived from shale has risen to over 25%. Furthermore, this trend isn't likely to break any time soon; America's proven natural gas reserves are the highest since 1971. 

The falling prices have had amazing effects on both the producers and consumers. Not only has it helped to revive many struggling regional economies, but the average consumer is now able to heat  their home for a fraction of the price that was paid 10 years ago. This leaves consumers with more money to spend elsewhere, in turn propping up other struggling industries in the United States.

In a time of sharply rising energy prices and a continually sluggish economy, falling natural gas prices have been crucial in curbing the downward spiral.

Cleaner Energy

Natural gas is the cleanest fossil fuel available. Renewable energy is not yet capable of producing a sizeable portion of America's energy. For the time being, energy demands will remain high and they can only be fulfilled by fossil fuels. Natural gas is cheap, abundant and cleaner than oil. 

The facts surrounding the environmental risks of natural gas, and in particular, fracking, have been exaggerated, manipulated, and even made up.

The Academy Award nominated documentary GasLand was released in 2010. The film portrayed the industry in an extremely negative way, stirring up public anger over the dangers of fracking. Yet, there was little science in the documentary. The film's creator, Josh Fox, is an activist with no expertise in natural gas, engineering, or geology. Not only did the film demonize everything and everyone in the industry, but it also depicted horrifying environmental consequences caused by fracking. The now iconic scene of a rural resident lighting his tapwater on fire highlights Fox's egregious journalistic errors. This scene was deceptive. The water obviously contained methane, which of course is a problem. But further testing of the water revealed that the methane didn't originate from the fracking well near the resident's property. For a more in depth look at specific errors contained in the film, see Energy in Depth's "Debunking GasLand."

Of course GasLand is not the only source of criticism of fracking. Fracking's proponents address each of the issues discussed in the previous question. Most admit that there are certain environmental risks, but these are far more remote than usually portrayed. For instance, groundwater contamination is highly unlikely because the shale gas reservoirs are far below the water table. Any slickwater or methane leakage will not go into the water table. Moreover, the EPA has still not discovered one proven case that a fracking well contaminated drinking water. Methane contamination is also unlikely and much more harmless than many claim. Methane contamination can occur for a number of reasons and though fracking might be a culprit, there are many others.

The dangers of the chemicals in the fracking fluid are also exaggerated. Most of the chemicals used in the slickwater solution are benign. And to prevent against any harmful pollutants being released, many states have begun to pass more rigid laws. Even though there have been leaks in the well casings, there has never been any groundwater contamination of anything considered dangerously toxic. The similar charge against fracking and the phenomenon of radioactive elements being released is also false. Several drilling sites have been tested and radioactivity was at or below normal levels. The chemical of choice for those seeking to indict the fracking industry has been benzene, an extremely dangerous carcinogen. Yet, when benzene levels were tested in several towns across the country, the levels of benzene were normal and safe. This was not how it was reported in some instances. Several sources referenced higher levels of benzene in some of the city's residents. What it failed to mention, though, was that all of these people smoked (a very common source of excessive benzene).

The possibility of earthquakes is also a much discussed topic. What fracking opponents fail to mention is that similar worries arise from geothermal exploration (an increasingly prevalent source of alternative energy), as well as underground carbon dioxide storage. Both of these enjoy nearly universal support, but do come with certain risks. Fracking, though really no more of an earthquake risk, and arguably not an earthquake risk at all, faces far more criticism.

Finally, there is the claim that fracking is in many ways ignored by the EPA and other regulatory agencies, giving the industry free reign over the environment. This is simply false. Fracking is currently up against many city, state, and federal regulations. New Jersey is moving to eliminate the practice completely. 

Energy Indpendence

This topic has permeated maintstream political discussion in America for decades. Almost all agree that more energy produced domestically is good for America's economy. The United States has been a gross importer of oil for over 60 years now. The oil resources on American soil are not nearly as vast as natural gas. The renewable energy sector, though growing, is many years away from being able to replace current fossil fuel consumption. 

Natural gas, almost wholly due to fracking, has emerged at a time when many were on verge of declaring an energy crisis in the United States. Many experts believe that the current amount of natural gas may be able to power America for centuries. Some have called this decade the "golden age of gas."  The new fracking technology is able to reach countless new natural gas reservoirs deep beneath thick layers of shale. Moreover, it is now able to do so efficiently and cheaply. This vast resource should not go to waste. 

Job Growth

Since the 2008 recession and the subsequent spike in unemployment few industries have done more to revive the job market in America. In 2012 there were over three million people employed in some way through the natural gas industry. The development of drilling in the Marcellus shale formation created 72,000 new jobs in Pennsylvania alone between the fourth quarter of 2009 and the first quarter of 2011.

President Obama, generally known for siding against the fossil fuel industry, has pushed for increased fracking. In his 2012 State of the Union Address, the President vowed to "take every possible action to safely develop this energy." A large part of his stated incentive was due to estimates that the industry, which has already created hundreds of thousands of new jobs, will add another 600,000 by the end of the decade.

Cut National Spending on Subsidies

The federal government and many state governments are currently subsidizing renewable energy companies with billions of dollars every year. To be sure, the fossil fuel industry is also subsidized, but the amount of production from renewable resources in light of the number of dollars they receive is startling. America's rogue national spending must be curbed. Though cutting subsidies on renewable energy would not come anywhere near solving our debt problems, it would be a step in the right direction. Rather than spend billions on unproven and, as yet, inefficient technology, we would all be better off using our cheap and productive resources.

 

Natural gas and fracking have been tagged as corrupt, greedy, unaccountable, power hungry cronies of the D.C. elite. And like any industry that has ever existed there are certainly some of those out there. But it is an unfair assumption of the industry in general. These companies have brought affordable energy to millions of struggling people across the country. Though there are certainly some environmental concerns, they are not as extreme as some would like the American people to believe. Precautions must be taken and risks assessed, but no energy source, not even wind or solar, comes without some chance of environmental harm. The fracking technology is quickly advancing and becoming more safe. Cities and states are taking actions against those companies which have made mistakes. If left to the market with the incentive to make massive profit, natural gas companies will continue to provide cheap energy while also ensuring safe procedures and minimal local damage. The most productive and safest companies will succeed. Fracking is just another example of an ingenuous and brilliant technology becoming wildly successful only to face widespread, unfounded criticism. In order to ensure an America that is still profitable in the coming decades, industries such as natural gas must be allowed to exist and thrive.

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11. What legislation has been passed recently concerning fracking? What might be the future of fracking in America?

The list of environmental regulations is far too extensive for the purposes of this FAQ, but there are several laws, regulations, and government agencies which are continually brought up in the discussion over fracking. Further, government agencies such as the EPA have been strongly criticized because of the leniency which the fracking industry has historically been given. Over the last several years, however, natural gas companies have been faced with more and more regulation due to environmental concerns. Here is a list and brief description of those which directly connect to the natural gas industry.

Clean Air Act (CAA - 1963) - The CCA has been amended several times since it was first enacted in 1963. The subsequent amendments further regulated things such as vehicle emissions, ozone protection, and excessive carbon waste. The CCA is often referenced when discussing the methane which escapes into the atmosphere during fracking. Only recently has fracking been more regulated under the CCA; prior to that the EPA's CCA standards had not been updated for decades and had not accounted for the emissions that result from fracking. The EPA began to regulate greenhouse gas emissions under the CCA beginning in 2011.

Safe Drinking Water Act (SDWA - 1974) - Due to the chemical components used in the fracking solution as well as possible methane leaks into the water supply, the EPA has begun to more strongly regulate fracking under the SDWA. Because of this and the Clean Water Act, natural gas companies are now almost universally required to give "fluid disclosure." The disposal of the wastewater is also closely monitored. 

Clean Water Act (CWA - 1977) - Similar to the SDWA, the CWA has been a key topic in discussions over fracking regulation. The images of flammable tapwater spurred many to seek further rules and regulations from the EPA over the natural gas industry. 

Superfund Law (The Comprehensive Environmental Response Compensation, and Liability Act - 1980) - This law gave the federal government vast authority for cleaning up areas heavily contaminated with dangerous toxins. The EPA called upon the Superfund Law several times in order to carry out investigations of fracking rigs and the surrounding area. The most notable cases were the Marcellus Shale tapwater contamination accusations and Wyoming's Wind River Indian Reservation complaints.

Environmental Protection Agency (EPA) - This government agency started in 1970 under President Nixon. Over the last four decades the EPA has grown to almost 20,000 employees and has obtained broad federal powers.

Occupational Safety and Health Administration (OHSA) - Created in the same year as the EPA, OSHA is a part of the U.S. Department of Labor. It is charged with ensuring "safe and healthful" working conditions throughout the United States. Several industries, however, are wholly or partially exempted from OSHA's regulation. Fracking is one of these. Some have been urging that OSHA, along with the EPA, be given more jurisdiction over natural gas companies.

Energy Policy Act of 2005 - This Act was passed by President Bush in an effort to address the growing energy problems in the U.S. It offered large tax reductions/credits and grants for renewable energy companies, added stricter regulations and provisions, and instituted further energy plans on a national scale. In many ways, Bush's Energy Policy in that year set the stage for America's current energy policy. This Energy Policy was also unique because it was comprised of so many parts. It has been the most encompassing energy policy in America for decades. Yet the policy hardly touched the topic of fracking. Therefore, it has been widely criticized for neglecting regulation in this area. It was from this policy that the infamous Halliburton Loophole emerged, as many claimed that Washington purposely ignored fracking regulation because of the sitting administration's close ties with the natural gas and oil industry.

 

It is legislation and federal agencies such as these that will determine the future of fracking in America. After looking in depth at this incredible industry, there are two widely accepted truths about fracking which help put the issue into perspective. First, fracking comes with some level of environmental risk. Second, fracking provides large quantities of cheap energy. These two facts must be weighed appropriately to decide where one stands on the issue.

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"In his State of the Union address, President Obama invoked the 30-year history of federal support for new shale gas drilling technologies to defend his present day investments in green energy. Obama stressed the value of shale gas—which will create thousands of jobs and billions in profits—as part of his 'all of the above' approach to energy, and defended the critical role government...

"The federal government has done much to boost the U.S. ethanol industry and is largely responsible for the growing use of this costly fuel additive. Now, Congress should do something for America's drivers by ending tariffs that limit imports of cheaper ethanol that could help lower pump prices. Even by the standards of special-interest-driven Washington, the ethanol industry gets an unusually...

"The public and decision makers are left with the erroneous impression that fracking will create vast numbers of new jobs."

"John has already noted what ought to have been above-the-fold news in every newspaper last week—the testimony of the GAO's head of natural resources that the U.S. has recoverable oil shale 'about equal to the entire world’s proven oil reserves.'  It wasn't front-page news, however, because it doesn't fit the liberal narrative and favorite talking point that the U.S. only has '2...

This piece describes how San Francisco's energy-saving, low-flush toilets actually created extra costs and unforeseen problems. Loris also touches on the ill-effects of several other energy efficient products and concludes by recommending that governmental subsidies are unnecessary in promoting these types of consumer goods.

"The conservative case for government intervention in energy markets is just as flimsy as the liberal case for government intervention in any other sector of the economy. Energy markets may not work as perfectly as in a textbook model, but they work — and government works even less perfectly."

"What’s needed to get the economy back on its feet is less wasteful government spending, less government tinkering with the energy economy, limiting regulations to the mitigation of clear and present dangers, minimizing the costs of regulatory compliance and unshackling the free-enterprise energy economy that drove the American economy to heights other countries could only envy.

Markets...

"The world's governments are beginning to come to grips with the reality that crude oil is a finite resource."

"A group of the nation’s leading experts on energy and the environment are at Duke this week attending a workshop to try to ferret out the facts (and tamp down the hype) around shale gas and fracking, the controversial method for extracting natural gas trapped in shale deposits. With yesterday’s sessions held as a public forum and today’s held in private, the two-day workshop aims to find...

"Electricity rates are not rising because of the competition brought about in those states that restructured electricity. Many of the states that introduced retail competition incorporated rate freezes that kept rates unchanged for a period of years even as the input costs for generating electricity increased dramatically. These artificial price freezes are not sustainable in the face of these...

"Natural gas plays a key role in our nation's clean energy future. The U.S. has vast reserves of natural gas that are commercially viable as a result of advances in horizontal drilling and hydraulic fracturing technologies enabling greater access to gas in shale formations. Responsible development of America's shale gas resources offers important economic, energy security, and environmental...

"Natural gas is a plentiful domestic resource with tremendous potential to increase the U.S. energy supply. Tapping this resource will create jobs and boost an ailing economy. More affordable energy will support additional business formation and growth. The role of the government is to regulate—not over-regulate and hamper—natural gas production. Hydraulic fracturing (fracking)—which has never...

"The bipartisan New Alternative Transportation to Give Americans Solutions (NATGAS) Act provides preferential tax treatment to subsidize the production, use, and purchase of natural gas vehicles (NGVs). Supporters argue that it promotes transportation fuel competition and reduces foreign oil dependence and greenhouse gas emissions.

In reality, the NATGAS Act simply transfers a portion...

"No one could have predicted that oil prices would rise to today's levels. Saudi Arabia's oil minister, Ali al-Naimi, says that they are irrationally high, pointing out that world demand is lower than the available supply and that Saudi oil inventories around the world are largely untapped."

"Natural gas is a vital component of the world's supply of energy. It is one of the cleanest, safest, and most useful of all energy sources. Despite its importance, however, there are many misconceptions about natural gas. For instance, the word 'gas' itself has a variety of different uses, and meanings. When we fuel our car, we put 'gas' in it. However, the gasoline that goes into your...

"According to many experts, the United States stands to be the Saudi Arabia of natural gas production. Last month, the New York Times reported otherwise, questioning the economics of shale gas extraction and overstating the amount of gas available in the vast formation in the United States."

According to Robert Michaels, "Natural gas is the commercial name for methane, a hydrocarbon produced by the same geological processes that produce oil. Relatively abundant in North America, its production and combustion have fewer adverse environmental effects than those of coal or oil." Michaels goes on to trace the history of Natural Gas usage in the U.S. from its earliest subjection to...

"The 'golden age of gas' could be cleaner than greens think."

"The technological revolution allowing for the cheap extraction of natural gas from shale occurred thanks to more than three decades of government subsidies for research, demonstration, and production, a new Breakthrough Institute investigation finds.

Both directly and indirectly, the government was behind the critical moments and tools in the shale gas revolution - massive hydraulic...

"Despite a challenging economic outlook, green building will support 7.9 million U.S. jobs and pump $554 billion into the American economy – including $396 billion in wages – over the next four years (2009-2013), according to a new study from the U.S. Green Building Council and Booz Allen Hamilton. The study also determined that green construction spending currently supports more than 2...

"Are Americans energy dependent? Yes—dependent on government energy subsidies. In 2007, American taxpayers subsidized government-preferred energy sources to the tune of nearly $17 billion. Increasingly, it is politicians in Washington who decide how Americans produce and consume energy. But subsidies for special interests stifle competition, raise energy prices, and decrease economic...

"The Nonconventional Fuels (Section 29) Tax Credit went into effect in 1980, following energy shortages and deep concern about American dependence on imported oil. Congress sought to encourage production of oil and natural gas from 'nonconventional' sources, such as Devonian shale, tight formations, and coalbeds. These deposits are unusually expensive to produce."

"The continuing boom in North Dakota seemingly has no end. Last June oil production from the Bakken Formation exceeded 11 million barrels a month. In February it reached 16 million with estimates that by late spring North Dakota could be producing more oil than either California or Alaska. That’s more than double what the state produced just two years ago."

Nuclear power may be back according to the Economist. They list multiple reasons that are encouraging this nuclear comeback; safer and more efficient designs, the fuel being located in geopolitically stable locations instead of the tumultuous middle-east, and potential climate-change costs associated with traditional fossil fuels. But the Economist warns that many industry insiders and...

"Given Americans’ increasing anxiety over made-in-Washington socialism, it’s a wonder that the nuclear power industry has escaped scrutiny for so long. The federal government socializes the risk of investing in nuclear power while privatizing profits. This same formula drove the frenzied speculation that cratered the housing and financial markets. What might it cause with nuclear power?"

"President Barack Obama on Friday released an executive order that will coordinate the administration's activities on natural gas and perhaps answer criticism that the White House is trying to end hydraulic fracturing. ...

It comes on the heels of complaints by GOP leaders — including Mitt Romney — and the gas industry that too many departments are working on hydraulic fracturing...

"President Barack Obama pushed drilling for gas in shale rock and support for cleaner energy sources to boost the economy in his final State of the Union address before facing U.S. voters in November.

Hydraulic fracturing, the process of injecting water, sand and chemicals underground to free gas trapped in rock, could create more than 600,000 jobs by the end of the decade, Obama said...

"Indeed, recent advances in the technologies used for oil and gas exploration are saving the U.S. economy hundreds of millions of dollars per day, creating lots of high-paying jobs, decreasing the need for foreign oil, and spurring manufacturing growth, which is leading to billions of dollars of new investment (and even more jobs). Yet, the Obama administration is using its fiscal year 2013...

"The Energy Information Administration recently released its Annual Energy Review 2011. The Annual Energy Review is a report of historical annual energy statistics, with many of the series dating back to 1949."

"A recent report on the November 2009 U.S. trade deficit found that rising oil imports widened our deficit, increasing the gap between our imports and exports. This is but one example that our economic recovery and long-term growth is inexorably linked to our reliance on foreign oil. The United States is spending approximately $1 billion a day overseas on oil instead of investing the funds at...

"When oil prices hit record levels, many people look for a scapegoat, and hugely profitable oil companies are an easy target. Even so, the typical political 'solutions' overlook the crucial role that market prices play in resource allocation, both among competing uses in different areas of the world today and among competing uses in different time periods (i.e. today versus the future)....

"Are futures markets a friend or foe of consumers? To hear the political class tell it during this season of soaring gasoline prices, they are clearly an enemy of nearly all mankind, a playpen for wild speculative orgies where nothing is produced — except higher fuel prices — and no services are rendered except to those who profit from the resulting price volatility.

Economists, however...

"Gas prices are high and Americans want the villains responsible held accountable. Congress doesn't want to be blamed, though it certainly deserves a portion for refusing policy changes that would make a difference even in the long run. So, to deflect attention Congress has joined in the finger-pointing, and the easiest targets are 'speculators.'"

"Like the close of most years recently, the end of 2011 marked the sunset of several important programs and subsidies for alternative fuels. The difference now, however, is that these short-term incentives have not been renewed. Since renewable fuels do not enjoy the longer-term subsidies and programs of oil, we are back asking Congress and the administration for some stability. As we enter...

"The U.S. House of Representatives recently passed H.R. 2360, the Providing for Our Workforce and Energy Resources (POWER) Act, which according to its sponsor, Representative Jeff Landry (R–LA), would 'close a loophole in existing law that allows offshore renewable energy resources to be installed and serviced by foreign workers.' ... This would supposedly result in more American jobs, reduced...

"America has an energy addiction - and it’s not an addiction to oil, as many politicians would have you think. It’s an addiction to government subsidies. The addicts, you see, are energy producers, not the consumers.

Their growing dependence on federal handouts is the real cause of America’s energy crisis. Energy subsidies have needlessly wasted taxpayer dollars, retarded...

This piece discusses the age old problem of price controls. As an example, Rockoff uses the gasoline price controls of the 1970s to demonstrate the economic loss this type of policy brings to individuals and society.

"America needs lots of clean, low-cost, secure electricity. Unfortunately, renewable sources don't fill the bill, and a national requirement wouldn't change things.

Renewables (excluding hydroelectric dams) produce less than 3% of U.S. electricity, much of which is hardly clean. About two-thirds comes from burning scrap vegetation ('biomass') and garbage, which produce the same...

"A few months ago my editors asked me to look into the potential danger for manmade earthquakes triggered during the hydraulic fracturing process.

The basic story I found at the time was pretty simple: Yes, when wastewater used during the fracking process ...

"President Obama spoke from the White House's South Lawn this morning, urging Congress to end the $4 billion in tax subsidies oil and natural gas companies receive from the government every year. Obama noted that 'Exxon pocketed nearly $4.7 million every hour' last year, and simply doesn't need taxpayer subsidies on top of companies' massive profits."

"According to data from the EIA, more natural gas was produced in October - 2,330,551 million cubic feet - than in any previous month in U.S. history (see chart above). I couldn't find this reported elsewhere, so I'm claiming this as a 'Carpe Diem exclusive'!

As John Tierney reported recently in the New York Times:

'The really good news is the discovery of vast quantities of...

"People should worry less about fracking, and more about carbon."

"America's shale-gas industry has since drilled 20,000 wells, created hundreds of thousands of jobs, directly and indirectly, and provided lots of cheap gas. This is a huge advantage to American industry and a relief to those who fret about American energy security."

"In May 1990, Pennsylvania’s Otto Cupler Torpedo Company 'shot' its last oil well using liquid nitroglycerin – abandoning nitro but continuing to pursue a fundamental oilfield technology.

Although President Rick Tallini remains in the business of improving oil wells’ production, today’s fracturing systems are much advanced from Lt. Col. Edward A. L. Roberts’ original 1865-1866 patents...

"The bankruptcy filing by solar panel manufacturer Solyndra, which received $535 million in loan guarantees from the federal government, is grist for many controversies. While some of them are narrowly political, others involve legitimate policy questions that deserve a full airing. It's fair to ask, for example, why the government is subsidizing alternate energy sources in the first place....

"At one time, natural gas was seen as little more than a superfluous byproduct of the oil extraction process. But once the potential of natural gas as an energy source became clear, a new era in energy production was soon off and running. Today, natural gas accounts for 23 percent of the world’s total energy consumption, and the International Energy Agency is projecting that by 2035, natural...

"Last month First Solar (FSLR) achieved a milestone in the solar industry with its announcement of $1 per Watt reducing its production cost for solar modules to 98 cents per watt, thereby braking the $1 per watt price barrier. While the achievement is great news for the solar industry some studies suggest more work is needed. An article in Popular Mechanics $1 per Watt talks of university...

"Solar grid parity is considered the tipping point for solar power, when installing solar power will cost less than buying electricity from the grid. It's also a tipping point in the electricity system, when millions of Americans can choose energy production and self-reliance over dependence on their electric utility.

But this simple concept conceals a great deal of complexity. And...

"The atavistic fear of gas lives on in public anxiety over fracking."

"Guy Benson’s recent report about a lifelong New Jersey Democrat who already is so fed up with Obama-Pelosi-Reid shenanigans that she pulled the lever for Chris Christie is one pebble in the avalanche of opinion holding that Republicans are due for a big year in 2010. Maybe the Republican optimists are right: I’m no good at electoral prognosticating, so I’ll defer here to the psephological...

"When the government decides to favor a technology with subsidies, it’s a good bet that subsidy 'winner' is a loser in the marketplace. Political decisions to provide subsidies distort the marketplace at the expense of economic growth and prosperity. That’s exactly what has happened--and what continues to happen--with America’s energy tax policy. Reversing this practice will benefit American...

If things continue as they are in Spain, the world’s poster child for renewable fuel, wind and solar energy may not save us after all—or renew the capitalist economy.

"Is nuclear power the answer for a warming planet? Or is it too expensive and dangerous to satisfy future energy needs?

Interest in nuclear power is heating up, as the hunt intensifies for 'green' alternatives to fossil fuels like coal and natural gas. Even some environmentalists have come on board, citing the severity of the global-warming threat to explain their embrace of the once-...

"Some households just can’t afford to save energy. When the upfront costs of new light bulbs exceed the savings from using less electricity, people will stick with the old ones." This piece goes on to describe how the Department of Energy has difficulty practicing what they preach in terms of energy efficient resources.

"The U.S. is in the midst of an energy revolution, and we don't mean solar panels or wind turbines. A new gusher of natural gas from shale has the potential to transform U.S. energy production—that is, unless politicians, greens and the industry mess it up.

Only a decade ago Texas oil engineers hit upon the idea of combining two established technologies to release natural gas trapped in...

"Even if we could find evidence that green energy is more labor intensive than its brown counterpart, that's an argument against green energy."

"There's a wealth of natural gas trapped underground—but what depths do we have to plumb to extract it? More and more, oil and gas companies are opting for fracking, or hydraulic fracturing: injecting a mixture of sand, water and chemicals into dense rock layers and shale, creating cracks that allow natural gas trapped inside to flow to the earth's surface. Once an also-ran in fossil-fuel...

"Most every politician and pundit says 'energy independence' is a great idea. Presidents have promised it for 35 years. Wouldn't it be wonderful if we were self-sufficient, protected from high prices, supply disruptions and political machinations?

The hitch is that even if the United States were energy independent, it would be protected from none of those things. To think otherwise is...

"Adding to a long list of energy-efficiency legislation, two Members of Congress—David B. McKinley (R–WV) and Peter Welch (D–VT)—recently proposed a federal energy-efficiency bill that gives tax rebates to homeowners who make energy-saving improvements to their homes. This bill and its predecessors reward consumers for saving money.

Let’s propose a simpler, more direct, and more...

"A majority of the populations in the developed world or strategically critical countries (India, Pakistan, China, etc.) will be traumatized by the ongoing destruction of financial wealth, as well as water resources necessary for agriculture and household consumption (and, ironically, industry as well). Many of these locations can be considered 'central hubs' of our global network civilization...

"Much like other important industries in the Commonwealth—coal, iron, steel, timber, and railroading—the production of oil in northwestern Pennsylvania was fraught with danger. Among the perils petroleum speculators and drillers faced were fires, explosions, and fatal jams while shipping crude oil to market on waterways.

One of the most dangerous tasks in extruding oil from the earth...

"Natural gas from shale is a game-changer for the United States.

It offers us greater control over our energy destiny, more jobs and government revenues, energy affordability, and reduced environmental impacts. Unfortunately, there are myths associated with this resource and its method of extraction, which is why I would like to provide a simple explanation of how the process actually...

The bottom line is that more nuclear power would mean less coal, less natural gas, less hydroelectric power, and less wind energy. But more nuclear won’t mean less oil.

"In his State of the Union address on January 31, 2006, President Bush called for more research on alternative energy technologies to help wean the country from its oil dependence. The proposal was not surprising: After all, R&D investment has long been a staple of government efforts to deal with national challenges.

Yet despite its prominent role in the national debate, R&D has...

"I have come to believe that extracting natural gas from shale using the newish technique called hydrofracking is the environmental issue of our time. And I think you should, too.

Saying so represents two points of departure for me. One: I primarily study toxic chemicals, not energy issues. I have, heretofore, ceded that topic to others, such as Bill McKibben, with whom I share this...

"New subsidies, like the NAT GAS act, should be off the table. It’s time to stop picking winners and losers, cut back on unnecessary regulations and let the free market unleash America’s energy resources based on consumer demand — not political whim."

"Energy consumption is arguably the largest contributor to carbon dioxide emissions and is at the center of much of the blame for climate change. To better understand how we use this carbon-creating energy, this is a look at which states use the most."

"The government spends billions of dollars to support the energy industry, which allows it to make energy cheaper than it should cost on the open market. These subsidies—either in the form of tax breaks or direct funding—favor some types of energy over others, giving our country a skewed sense of what each gallon of gas or wind-powered electron costs. This is a look at where the government...

"Americans are growing increasingly concerned about energy. Their demand for energy is increasing faster than secure supplies. Much of the world's sup­ply of oil is delivered in a restrictive market dominated by unstable or hostile nations, some of which are using energy as a tool to frustrate U.S. national secu­rity and foreign policy objectives.

Meanwhile, many Americans harbor...

"The biofuels revolution that promised to reduce America's dependence on foreign oil is fizzling out."

"Energy purchases made by the U.S. Department of Defense do not influence world oil prices, making cutting fuel use the only effective choice to reduce what the Pentagon spends on petroleum fuels, according to new reports issued today by the RAND Corporation."

"President Barack Obama pledged in the State of the Union address last week that the government would develop a road map for responsible natural gas production and roll out new rules to ensure drillers protect the environment.

Companies would be required to disclose the 'complete chemical makeup of all materials used' in fracking fluids under the Interior Department's draft rules, a...

"The history behind the shale gas boom remained relatively unknown until late 2011, when researchers at the Breakthrough Institute conducted an extensive investigation revealing the role that federal agencies like the Department of Energy and the National Laboratories played in supporting gas industry experimentation with shale fracking.

Featured in the ...

This piece comments on the Standard Oil Trust case. According to Epstein, history shows that during Rockefeller's time in the oil industry, prices dropped dramatically, suggesting that Rockefeller's drive and ability to do exceptional business helped rather than hurt the American people.

"The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the...

"The flood of salty wastewater that's washing into Ohio from a growing number of natural-gas wells in Pennsylvania is spreading west.

Mansfield city officials said this week that Austin, Texas-based Preferred Fluids Management wants to drill two, 5,000-foot disposal wells on the north side of town."

"There are two prominent justifications for biofuel subsidies—to reduce gasoline consumption and carbon dioxide emissions. But how much does it cost to achieve these goals? According to the Congressional Budget Office (CBO) ..., subsidies for biofuels are costly to consumers and have high abatement costs for mitigating carbon dioxide emissions."

"The government has given the go-ahead to the controversial technique known as 'fracking'."

"The recent press about the potential of shale gas would have you believe that America is now sitting on a 100-year supply of natural gas. It's a 'game-changer.' A 'golden age of gas' awaits, one in which the United States will be energy independent, even exporting gas to the rest of the world, upending our current energy-importing situation.

The data, however, tell a very different...

"The safe, tightly-regulated development of America's clean-burning natural gas resources continues to provide broad benefits, ranging from job creation, strengthened energy security, and a cleaner environment."

"A few days ago Alex Planes published an extraordinary article on The Motley Fool titled the "Real Costs of Alternative Energy" that summarized direct US subsidies for our principal energy sources, restated annual energy consumption from each of those sources using equivalent barrels of oil...

"On 11 March last year, Japan was hit by massive earthquake and tsunami, resulting in thousands of tragic deaths, as well as a nuclear catastrophe in Fukushima.

While global attention has long since shifted elsewhere, the nuclear catastrophe in Fukushima is far from over. This is the nature of nuclear accidents: they leave a long-lasting radioactive legacy.

One year on, the...

The U.S. could meet its Kyoto target by replacing 59 percent of coal energy with between 214,000 and 236,000 wind turbines?

Despite its alleged success abroad, NRDC believes that Americans still need to fork over millions of dollars for alternative energy technologies like windmills—taxpayer money that has not made the industry any more viable.

"Malodorous brown smoke from a power plant enveloped this logging town on April 29, 2010, and several hundred residents fled until it passed.

Six months later, the plant got $5.4 million from a federal program to promote environmentally preferable alternatives to fossil fuel.

The plant, Blue Lake Power LLC, burns biomass, which is organic material that can range from construction...

"On the mountainous Wind River Indian Reservation in western Wyoming, cattle grazing in a valley share space with more than a hundred gas wells.

Pumps puff and click, like alarm clocks for long-time farmers and ranchers who wait for their Thursday deliveries from the Big Horn water truck.

The driver stacks up pyramids of five-gallon bottles at 19 stops. Encana Corporation, an...

"As concerns grow in the U.S. about the environmental impact of hydraulic fracturing, or 'fracking,' to extract natural gas from shale, companies have set their sights on Europe and its abundant reserves of this 'unconventional' gas. But from Britain to Poland, critics warn of the potentially high environmental cost of this looming energy boom."

"When the Department of Energy panel on hydraulic fracturing released its 90-day report on shale gas production, I mentioned a few areas of concern.

But one finding from the report where we can agree is the importance of disclosing the composition of fluids used in the hydraulic fracturing process.

'Fracking' fluid is pumped down the well under controlled...

Chart or Graph

"The Alternative Energy Pricing chart was base on research from Solarbuzz which is one of the leading research firms in solar energy."

"Electricity from biomass plants is rising; a breakdown of sources in the U.S."

Created by the U.S. Department of Energy, this chart shows how much American consumers spend per energy source.

"The CBO calculated the costs to taxpayers of using ethanol to reduce gasoline consumption by one gallon to be $1.78 for ethanol made from corn and $3.00 for cellulosic ethanol."

"Abundant crude, combined with a huge refining base and waning demand at home turned the U.S. into a net exporter of refined products last year; the EIA expects that situation to continue beyond 2020."

"In the wake of the credit crisis and a sharp economic downturn, the federal government launched several new energy-specific direct expenditure programs that are largely directed at renewables and energy conservation."

"Because the company had not properly cemented its boreholes, gas migrated up along the outside of the well, between the rock and steel casing, into aquifers. The problem can be corrected by using stronger cement and processing casings to create a better bond, ensuring an impermeable seal."

The cost of utility-scale wind power has come down dramatically in the last two decades due to technological and design advancements in turbine production and installation.

"The following table condenses and reorders the data from the lowest to the highest direct Federal subsidy per unit of useful energy consumed."

"As Table 1 demonstrates, production of natural gas liquids increased almost 20 percent from 2009 to 2010 on the east coast of the United States, which includes the Pennsylvania Marcellus."

"The map below, produced by the Tribune-Review, best portrays who stands to gain from the North American fracking boom happening in every crevice of the United States. 'Boosting the local economy'? As can be seen quite clearly, this is merely a pipe dream."

"Exhibit 36 provides a summary of the additives, their main compounds, the reason the additive is used in a hydraulic fracturing fluid, and some of the other common uses for these compounds."

This graph demonstrates that nuclear power costs are rising. Despite advances in technology, nuclear power is not becoming cheaper. Mark Cooper argues this fact should lead us to invest in other alternative energy sources.

"Approvals [are] taking longer. Exploration and development plan approvals are down by more than 85 percent from previous levels; approvals of drill permits covered by those exploration and development plans show a decline from previous levels of nearly 65 percent (see Figure ES-2)."

Charting the oil and gas, nuclear, biofuel, and renewable energy industries, this chart "shows the average annual subsidies to each sector over their lifetimes."

Chart shows future natural gas supply estimates.

On an absolute dollar basis, renewables receive over twice the level of subsidies compared with conventional energy sources.

"Hydraulic fracturing often called fracking or hydrofracking is done from a wellbore drilled into reservoir rock formations."

A key question, therefore, is whether the real gain in consumer surplus shown in Figure 1 can ever be greater than the cost of the subsidy. In other words, can a subsidy increase the overall economic value of a market? The answer is no.

"[T]he historical data suggest that today's renewables subsidies are having just about the same level of success in promoting growth as earlier U.S. subsidies did, even with less support."

"Table 1 also summarizes the INTEK shale report's assessment of technically recoverable shale oil resources, which amount to 23.9 billion barrels in the onshore Lower 48 States."

"The estimates of technically recoverable shale gas resources for the 32 countries outside of the United States represents a moderately conservative ‘risked’ resource for the basins reviewed."

"[O]il provided an energy return on energy invested (EROEI) of about 100:1 in 1930, but it is now less than 20:1 for imported oil and 10:1 for domestic (>85% of our crude oil is imported). No other alternative energy source (except hydroelectric) even comes close to these ERsOEI, and some, such as biodiesel, are probably net energy losers."

"According to data from the EIA, more natural gas was produced in October - 2,330,551 million cubic feet - than in any previous month in U.S. history (see chart above)."

"Created by the U.S. Department of Energy, this chart shows America's natural gas imports and exports since 1950."

Compare U.S. natural gas prices against other countries.

"The increase in natural gas production from 2010 to 2035 in the AEO2012 Reference case results primarily from the continued development of shale gas resources (Figure 107)."

"Major natural gas production in conventional fields in the continental US reported by amount of gas produced."

Indeed, as Figure ES-1 ... shows, subsidies to the nuclear fuel cycle have often exceeded the value of the power produced. This means that buying power on the open market and giving it away for free would have been less costly than subsidizing the construction and operation of nuclear power plants. Subsidies to new reactors are on a similar path.

"[M]ajor oil companies.... have ploughed hundreds of billions of their profits into further investment, in order to expand production capacity in the future. Indeed, from the early 1990s through 2006, new investments have tracked (and usually exceeded...) earnings (see Chart 1)."

"Energy consumption is arguably the largest contributor to carbon dioxide emissions and is at the center of much of the blame for climate change."

"Wind and biomass dominate projected increases in U.S. renewable electricity generation, excluding hydropower, in EIA's Annual Energy Outlook 2012 (AEO2012) Early Release Reference case."

"Americans endorse increased government efforts to encourage energy production from alternative sources of energy, but at the same time do not believe the government should reduce its financial support for the production of energy from traditional sources."

"It appears the public clearly recognizes the need to develop alternative energy sources and the benefits of doing so, but may also think it is too soon to do away with the current way of doing things."

"A key factor in the increased support for conservation programs, end-use technologies and renewables was the passage of several pieces of legislation responding to the recent financial crisis and subsequent economic downturn...."

Much of the American Recovery and Reinvestment Act was dedicated to stimulated the "green economy."

This chart reports how many billion cubic feet of natural gas were produced per day in select states.

"Global reserves have been steadily increasing for at least 30 years. According to a report from the Massachusetts Institute of Technology (MIT), published last year, world production has grown significantly too, rising by two-fifths between 1990 and 2009, twice as fast as that of oil."

In 2009, renewable energy made for 8 percent of the United States' total energy consumption. This chart breaks those 8 percent into categories such as wood, biofuels, and wind.

"Filling the borehole with water provided Roberts his 'fluid tamping' to concentrate concussion and more efficiently fracture surrounding oil strata. The technique had an immediate impact — production from some wells increased 1,200 percent within a week of being shot – and the Roberts Petroleum Torpedo Company flourished."

"Here are the countries that are spending the most on renewable energy, along with how much of it they currently produce, and what percent of their energy output that represents."

Much of the report focuses on the costs associated with various renewable energy mandates at the state and regional level.

Location of Shale Basins and Devonian/Mississippian Shale in the United States and Canada.

"The Energy Information Administration estimates the U.S. has 2552 trillion cubic feet of potential natural gas resources."

According to this chart, the cost of solar energy has dramatically decreased over the last 30 years.

"Western Hemisphere nations provide about half of our imported petroleum."

"The government spends billions of dollars to support the energy industry, which allows it to make energy cheaper than it should cost on the open market."

"Hydroelectric is the most cost effective at $0.03 per kWh."

"The government spends billions of dollars to support the energy industry, which allows it to make energy cheaper than it should cost on the open market."

"This chart shows the common ingredients in hydraulic fracturing fluids, as well as how they’re used in everyday life – in everything from detergents to cosmetics to food."

"Natural gas is a combustible mixture of hydrocarbon gases. While natural gas is formed primarily of methane, it can also include ethane, propane, butane and pentane. The composition of natural gas can vary widely, but below is a chart outlining the typical makeup of natural gas before it is refined."

"Although U.S. government investments in ERD&D have increased somewhat in recent years, they remain far below the levels of the late 1970s, when the economy was far smaller (see Figure 1.)"

"More than 85 percent of the growth in U.S. energy demand since 1980 has been met with electricity."

"There is no doubt that the federal government should help guarantee the development of alternative energy for the nation. You can see in this DOE chart that America is losing the race to produce solar energy products, particularly to China and Taiwan."

Comparison recoverable oil from shale estimates done by Arthur Berman and the well operators.

A sustained slowdown in the Gulf of Mexico is already having a negative impact on job creation and domestic oil production, and will do so even more in 2012. The potential opportunities associated with a proactive approach by regulators to successfully restart the Gulf of Mexico 'engine' are significant.

"Exhibit 35 demonstrates the volumetric percentages of additives that were used for a nine-stage hydraulic fracturing treatment of a Fayetteville Shale horizontal well.... Evaluating the relative volumes of the components of a fracturing fluid reveals the relatively small volume of additives that are present."

"This map, produced by BP’s Statistical Review division, shows countries based on known crude oil reserves."

"This map divides the world into five solar performance regions based on yearly averages of daily hours of sunlight and ambient temperature. Each specific site will, of course, be different. Also, local weather conditions and seasonal changes can significantly affect the amount of sunlight available."

Analysis Report White Paper

"A group of studies, rapidly gaining popularity, promise that a massive program of government mandates, subsidies, and forced technological interventions will reward the nation with an economy brimming with 'green jobs.'"

"Large-scale federal intervention into America’s energy markets began in the 1930s and continued through the 1970s. A series of major laws and executive actions sought to control energy prices, regulate electric and gas utilities, and limit imports. Competition was stifled and domestic investment was suppressed."

"There is little connection between used-fuel management programs and the needs of the nuclear industry. Any successful plan must grow out of the private sector. The time has come for the federal government to step aside and allow utilities, nuclear technology companies, and consumers to manage used nuclear fuel."

"This system masks the social costs arising from those energy choices, including shorter lives, higher health care expenses, a changing climate, and weakened national security. As a result, we pay unnecessarily high costs for energy. New 'rules of the road' are needed to improve our living standards."

"Any energy policy that tightens supplies and raises prices will hurt everyone—but especially the lower and middle income—and needlessly prolong the economic misery. It is vitally important to thwart policy initiatives that raise energy prices, make American manufacturing uncompetitive, and send American jobs abroad."

The most important day of the year for the many energy companies that receive federal financial support isn’t the day the president releases his proposed budget, or the day appropriations bills get passed, or even the day when government checks get sent out. It’s tax day. Why?

The projections in the U.S. Energy Information Administration's (EIA's) Annual Energy Outlook 2012 (AEO2012) focus on the factors that shape the U.S. energy system over the long term.

This analysis is quite lengthy, but Koplow essentially concludes, "The picture that emerges from our analysis on biofuels markets illustrates not only that subsidies to ethanol and biodiesel are pervasive and large, but that they are not a particularly efficient means to achieve many of the policy objectives for which they have been justified."

"Market forces have propelled the progressive electrification of factories, offices, and homes for over a century. Electric motors and associated systems that convey and control the electricity they need, powered by onboard diesel generators, have likewise displaced mechanical alternatives in locomotives and monster trucks."

"A favorite approach to reducing carbon dioxide emissions among Washington bureaucrats is the 'market-oriented' cap-and-trade program, which under a global warming bill proposed by Representatives Henry Waxman (D-CA) and Ed Markey (D-MA), would establish."

Policymakers and businesses are now trying to figure out the best way to limit the emissions of greenhouse gases, especially carbon dioxide, which is produced by burning fossil fuels such as coal, oil, and natural gas.

Future historians of efforts to address climate change will almost certainly look back on 2010 as the end of one era and the beginning of another.

This report acknowledges that the growing ethanol market has broad policy failures. It states that "without appropriate information, incentives, and rules, the biofuels industry is likely to expand production in environmentally harmful ways." This report proposes an index to track the environmental effects of biofuels.

"The arguments advanced against increasing gasoline taxes are applicable to the broader discussion about America's reliance on oil generally. The case for policies designed to discourage oil consumption is nearly as threadbare as the case for increasing the gasoline tax—and for largely the same reasons."

"Proponents of intervention contend that gasoline markets are not competitive (with some accusing producers of price collusion), that fat profit margins induce little more supply than might otherwise be induced by healthy but 'reasonable' profit margins, and that the gasoline profits are largely unanticipated and unearned."

"Competition in electricity markets – as with competitive market structures for other commodities – creates incentives for efficiency and innovation while providing the most affordable prices consistent with long-term investments."

"Our energy crisis today is all about misguided government rules, regulations, and taxes that have endangered consumers, businesses of every size and type, U.S. competitiveness, and the economy."

"By liberalising energy markets, EU countries have started to introduce policies aimed at encouraging new operators to enter the market and compete to offer gas and electricity to customers at the best price."

"But affordable energy is under assault. Many politicians and ideological special-interest groups are working to place onerous restrictions on the energy we use and on how we use it."

The energy industry has been heavily regulated and subsidized by the federal government for decades. The Department of Energy's array of subsidy programs grew out of atomic research efforts of the 1950s, responses to the energy crisis of the 1970s, and concerns about conservation and global warming in recent decades.

"This publication reviews the history of U.S. ethanol policy, explains the economics of ethanol production in today's market environment, and outlines some policy alternatives that could be considered for the future."

"Cracking down on greenhouse gas emissions to comply with the Kyoto Protocol would provide economic help for renewable energy technologies, but such initiatives would result in only a 7 percent market share for renewable energy and a 43 percent increase in electricity prices in return for benefits that are still very uncertain."

"Budget deficits drove the conversation in Washington in 2011 with the daily news dominated by government shutdown threats, the 'super committee,' continuing resolutions, and arcane budgeting practices. Unfortunately, this left Americans convinced that government investments in the future are off the table because of large federal budget deficits that need to be reduced.

The authors explain that before undertaking efforts to restructure and possibly impoverish our society, careful analysis and informed public debate about these assumptions and prescriptions are necessary.

"In this environment, some have seized upon the 'Green Economy' as a cure for both the nation’s current economic ills, and as a way to address the issues of global warming and energy security."

The Global Warming Solutions Act of 2006 (AB 32) mandates that California reduce its greenhouse (GHG)emissions to 1990 levels – 427 million metric tons of carbon dioxide equivalent – by 2020. Although the electricity sector contributes about 25% to California’s GHG emissions, it is expected to provide well over a third of statewide emissions reductions.

Lesser discusses some of the most egregious examples of "green jobs" and the economics behind their failure.

"Abstract: H.R. 1280—a new bill currently before the House of Representatives—is intended to ensure that America’s commercial nuclear exports do not lead to the proliferation of nuclear weapons."

"The wealth effects of energy production increase during peak oil shocks that help energy-producing states hedge against peak oil shocks. I test this hypothesis using consumption and gross state product data for US states for the period 1963-2007."

Exploiting the world’s vast resources of unconventional natural gas holds the key to a golden age of gas, but for that to happen governments, industry and other stakeholders must work together to address legitimate public concerns about the associated environmental and social impacts.

"The Federal government provides a range of subsidies, tax incentives, and regulatory mandates to promote the use of ethanol and other renewable fuels into the national gasoline pool. ..."

Contrary to popular opinion of John D. Rockefeller, this article declares that his chief goal was to provide oil for the poor at a decent price. Folsom goes on to describe Rockefeller's strong work ethic and philanthropic spirit, while also describing his sharp and successful career in the oil business.

"This paper discusses the lessons learned from electricity sector liberalization over the last 20 years. The attributes of reform models that have exhibited good performance attributes are identified, drawing on empirical analysis of market structure, behavior and performance in many countries."

In 2004 Logan, Utah, saw the opportunity to place a turbine within the city’s culinary water system. The turbine would reduce excess water pressure and would generate clean, low-cost electricity for the city’s residents. Federal funding was available, and the city qualified for a grant under the American Recovery and Reinvestment Act.

"The United States has allowed multiple large, vertically integrated oil companies to merge over the last five years, placing control of the market in too few hands. The result: uncompetitive domestic gasoline markets."

"This paper analyzes the effect of energy price shocks on business cycle fluctuations in a model with monetary policy and a tax code that includes a tax on realized nominal capital gains."

"We believe that the contention that energy markets are riddled with market failures, however, is a myth. While energy markets don’t work with textbook efficiency (in fact, few do), energy markets do not exhibit special problems that require government attention."

"This winter's unprecedented natural gas price rise--as much as 60 percent in some cases--demonstrates dramatically that the Natural Gas Policy Act (NGPA) fails to protect the consumer."

"This section will outline the major historical regulatory events related to the natural gas industry, and show how the current structure of the industry in the U.S. is the product of a long regulatory evolution."

"Despite the subsequent collapse in commodity prices with the onset of the financial crisis, this criticism of speculation has not disappeared. Indeed, it has led to specific regulatory and legislative proposals."

"This report catalogues in one place and for the first time the full range of subsidies that benefit the nuclear power sector. The findings are striking: since its inception more than 50 years ago, the nuclear power industry has benefited—and continues to benefit—from a vast array of preferential government subsidies."

This piece describes the economics of nuclear energy.

"One of the central questions in recent macroeconomic history is to what extent monetary policy, as opposed to oil price shocks, contributed to the stagflation of the 1970s."

Currently, the NRDC believes nuclear energy cannot compete without significant subsidies. They suggest cutting subsides and allowing the free-market to select the best alternative energies.

"With gasoline and electricity prices skyrocketing, politicos on both the Left and Right agree that the government must do something to promote alternative energy sources. The debate is not whether to intervene, but how. Which fuels should we promote? How aggressively should we subsidize those fuels?"

"This report presents the findings of the first stage of a longer research program that IHS CERA and IHS Global Insight are conducting to evaluate the pace of plan and permit approval in the post-moratorium environment in the Gulf of Mexico."

The deregulation of oil and gas prices made it unnecessary for the Federal Energy Regulatory Commission to continue to review the determinations previously called for under the Natural Gas Policy Act. The NGPA standards, however, were linked to tax credit eligibility under Section 29.

"The Center for American Progress has long championed efforts to create jobs through building a clean-energy economy."

"The measurements, trends, and discussions offered here provide an encouraging but also challenging assessment of the ongoing development of the clean economy in the United States and its regions. In many respects, the analysis warrants excitement."

"The Reagan Administration is proceeding with its plan to dismantle much of the Federal solar energy program as it existed under the Carter Administration. The objective is to reduce Federal expenditures and bureaucracy and to limit Federal involvement in program areas where the private sector can take over."

An examination of Europe’s green jobs experience reveals these policies to be terribly economically counterproductive.

"To be able to compare historical and alternative hypothesized responses of monetary policy to economic disturbances, one needs to select some interesting set of macroeconomic shocks to which policy is likely to respond."

The incoming Obama administration and the 111th Congress face enormous challenges and opportunities in tackling the pressing security, economic, and environmental problems posed by the energy sector in the United States and worldwide.

"Many politicians and pundits are panicked over the existing state of the oil and gasoline markets. Disregarding past experience, these parties advocate massive intervention in those markets, which would only serve to repeat and extend previous errors. These interventionists propose solutions to nonexistent problems."

"Many politicians and pundits are panicked over the existing state of the oil and gasoline markets. Disregarding past experience, these parties advocate massive intervention in those markets, which would only serve to repeat and extend previous errors. These interventionists propose solutions to nonexistent problems."

"Public- and private-sector leaders are working hard to create a brighter economic future for our country, one in which new industries create well-paying, enduring jobs for Americans and spark growth from coast to coast."

This paper summarizes various estimates of the costs of mitigation of adverse impact of the climate change via cap-and-trade.

This paper claims that despite supporters hopes and dreams, the nuclear renaissance is simply cost inefficient. Examining historical data, current cost projections, relative cost of other alternatives, and finally other factors such as environmental or safety concerns, Mr. Cooper claims that costs in the future are increasing for nuclear power.

"Among the most fashionable preoccupations in foreign policy circles is 'energy security.' Although it is unclear what exactly energy security means, foreign policy elites have long been concerned about reliance on foreign energy."

This paper argues that changes in the energy industry lead to proliferation concerns.

"Since the early 1950s, every major government in the Western Hemisphere, Asia, the Middle East, and Europe has been drawn to atomic power’s allure only to have market realities prevent most of their nuclear investment plans from being fully realized."

"No one likes paying more for gasoline (except maybe folks who have always resented America’s relatively cheap gasoline, its SUVs, and other signs of bourgeois opulence), but government-imposed price restrictions would only make matters worse."

"With $2.3 billion in Recovery Act tax credits allocated for green manufacturers, President Barack Obama and other Democratic politicians have high hopes for green technology. But their expectations clash with both economic theory and practical experience in Europe."

"Although there were several credible candidates for the title, fifteen years ago natural gas was probably America's most misregulated industry."

For this study, we conducted a survey of producers to estimate drilling activity, spending levels, and production rates. The survey results clearly show a significant increase in activity, with total spending increasing from $3.2 billion during 2008, to nearly $5.3 billion during 2009.

Barry Brownstein argues that the Price-Anderson Act funneled resources into an industry (nuclear power) that probably would not exist without this subsidy, harming the general welfare.

Wynn and Lowe argue that renewable energy mandates will be difficult to implement, will raise costs for energy consumers, and may even negatively affect the environment.

The gloomy, almost crisis-like outlook for the future of domestic natural gas in the late 1970’s set in motion a set of national-level energy initiatives for adding new gas supplies.

This piece goes on to present a positive history of John D. Rockefeller and his commitment to capitalism and strong business principles.

"Although energy subsidies can and do serve many policy purposes, the most basic relate to furthering the development and commercialization of technologies deemed to be in the public interest."

"Among the great misconceptions of the free economy is the widely-held belief that 'laissez faire' embodies a natural tendency toward monopoly concentration."

The energy world faces unprecedented uncertainty. The global economic crisis of 2008-2009 threw energy markets around the world into turmoil and the pace at which the global economy recovers holds the key to energy prospects for the next several years.

Video/Podcast/Media

"Certainly natural gas is a great and clean fuel. But government should not use our money to tell us which fuels to use; the free market is the best way we can decide for ourselves."

In this podcast, Andrew Morriss explains some of the problems with renewable energy products. According to Morriss, renewables such as wind or solar are less efficient because they actually rely on a good deal of "brown" energy to make them effective.

"Prof. Steve Horwitz addresses the common belief that the world is running out of natural resources. Instead, there are economic reasons why we will never run out of many resources. In a free market system, prices signal scarcity. So as a resource becomes more scarce, it becomes more expensive, which incentivizes people to use less of it and develop new alternatives, or to find new reserves of...

"Economics professor Antony Davies answers the question of whether increased spending by the US government increases gross domestic product (GDP) in the short term. Using data relating government spending to economic growth, he concludes that government expenditures have a slightly negative effect on growth. Far from being a solution to economic downturns, increasing spending might exacerbate...

"$18.6 billion worth of direct financial subsidies were provided by the federal government to energy companies and organizations in 2009 – with the promise that such support would reduce America’s reliance on foreign energy sources, push technological breakthroughs, and ensure that Americans had access to reliable and affordable energy sources. Unfortunately, this approach has failed miserably...

A brief explanation of the process of fracking.

"The Moritz Federalist Society is proud to host Author Tim Carney as he debates Professor Peter Swire on the topic of 'Are Government Regulations or Free Markets the Better Solution to America's Energy and Environmental Problems?' as part of the John Templeton Foundation's The Rule of Law and Wealth Creation debate series."

Parts...

"FBN's Liz MacDonald on what the bankruptcy of Beacon Power Corp. means for your wallet."

"Dr. Robert Murphy explains the relationship between the Federal Reserve and Energy Markets in front the Committee on Government Oversight and Reform."

The bottom line: If green jobs are a good idea, they will just happen. The give and take of free market competition will provide them.

"On July 31st, 2011, a group of Democrat and Republican community leaders boarded a bus to travel an hour north to see, hear, and feel the negative effects of gas drilling.

This is the tour the gas companies don't want you to see.

Sure, there are a few millionaires made from gas drilling, but for every millionaire, there are countless other who are lied to, have their rights...

In this news clip, energy policy analyst, Nick Loris, discusses the issue of Solyndra and green energy.

In this brief news clip, Patrick Michaels explains the extreme inefficiency of renewable energy such as wind and solar power. According to Michaels, government spending on energy sources such as these is wasteful.

"Congressman Mike Pompeo (KS-04) and Congressman Raúl R. Labrador (ID-01) joined with Americans for Tax Reform's Grover Norquist and Heritage Action's Michael Needham at a press conference where they voiced their opposition to all government energy subsidies. The two Congressmen utilized the occasion to unveil House Resolution 267."

"As Congress debates extending biofuel tax credits and the ethanol import tariff, questions are being raised about the broader policy mix that includes subsidies, tariffs, mandates, and sustainability standards. As a recent CBO report revealed, some of these policies — the Volumetric Ethanol Excise Tax Credit (VEETC) in particular — are quite expensive. Although biofuels were once hailed as a...

"President Obama spoke from the White House's South Lawn this morning, urging Congress to end the $4 billion in tax subsidies oil and natural gas companies receive from the government every year. Obama noted that 'Exxon pocketed nearly $4.7 million every hour' last year, and simply doesn't need taxpayer subsidies on top of companies' massive profits.

The president added, 'It's like...

Cato Senior Fellow Jerry Taylor delivers a harsh critique of green energy advocates. What's more, he explains why government subsidies on behalf of renewable energy are currently a waste of taxpayer money.

"Many petroleum experts predict that world oil production will peak by the end of the decade. Will the United States soon be entering a period of worsening energy shortages and soaring energy costs? And, if so, what should the government to do about it? Or will the ever-improving technological efficiencies of the free market provide access to virtually endless sources of new energy? Peter...

A dedicated, unabashed, free market capitalist, T. J. Rodgers takes a businessman's and engineer's view of global warming.

"America’s experiment with laissez-faire capitalism in the 1800s was a disaster, historians tell us, because businessmen used anticompetitive tactics to form giant, invincible monopolies. The textbook example of these evils of Big Business is John D. Rockefeller’s Standard Oil Trust. In an era before government regulations and antitrust laws, the story goes, Rockefeller wielded market power to...

"Residents and business people of Mansfield, Pennsylvania discuss the central role that the natural gas industry has played in creating jobs and boosting the local economy. Mansfield, PA can continue to see these economic benefits through continued exploration of the Marcellus Shale. "

"There are lot of different perspectives on how to solve America's oil dependency problem. Some would argue that government needs to make gas more expensive while subsidizing renewable energy. Others would argue that government needs to step out of the way and let American ingenuity take over. Learn more with this video and make up your own mind."

"On the mountainous Wind River Indian Reservation in western Wyoming, cattle grazing in a valley share space with more than a hundred gas wells.

Pumps puff and click, like alarm clocks for long-time farmers and ranchers who wait for their Thursday deliveries from the Big Horn water truck.

The driver stacks up pyramids of five-gallon bottles at 19 stops. Encana Corporation, an...

"The Heritage Foundation and the Institute for Energy Research traveled to Harvey, LA, to film Leslie Bertucci, owner of R and D Enterprises, for this oil spill anniversary video. Bertucci welcomed us to her warehouse with a weary smile, handed us hard hats and cheerfully guided us through her equipment yard, even as she explained the difficulties she's endured since the spill -- most...

Primary Document

"The purpose of the 1603 payment is to reimburse eligible applicants for a portion of the cost of installing specified energy property used in a trade or business or for the production of income. A 1603 payment is made after the energy property is placed in service; a 1603 payment is not made prior to or during construction of the energy property."

"Many Americans understandably are upset with the sharp spike in gas prices since Hurricane Katrina hit the gulf coast in August, and are concerned by reports of oil company profits. But we must understand that high oil prices are not the result of an unregulated free market. On the contrary, the oil industry is among the most regulated and most subsidized of U.S. industries. Perhaps we need...

"Canada is on the edge of an historic choice: to diversify our energy markets away from our traditional trading partner in the United States or to continue with the status quo.

Virtually all our energy exports go to the US. As a country, we must seek new markets for our products and services and the booming Asia-Pacific economies have shown great interest in our oil, gas, metals and...

"A report of historical annual energy statistics. For many series, data begin with the year 1949. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, coal, electricity, nuclear energy, renewable energy, international energy, as well as financial and environmental indicators; and data unit conversion tables."

After the successful militarization of nuclear power, Congress passed this legislation to promote peaceful nuclear power. This Act created the Atomic Energy Commission. It also established that the government controlled nuclear materials. However, the goal was to have private companies run nuclear power plants. As a result, all nuclear materials -- until the 1960's -- were on loan to private...

Produced by the Australian government, this document describes the nation's determination to seek energy security through market forces rather than government intervention. According to the document, "energy market and policy framework reforms have been central to improving our energy security and efficiency. Energy outcomes are increasingly a product of market forces rather than government...

If there is one commitment that defines our people, it is our devotion to the rich and expansive land we have inherited.

The issue of coal-derived energy was one of the many topics discussed by Coolidge in his first annual message. Coolidge declared that "[t]he supply of coal must be constant. In case of its prospective interruption, the President should have authority to appoint a commission empowered to deal with whatever emergency situation might arise, to aid conciliation and voluntary arbitration, to adjust...

Approved by President Roosevelt in 1933, this code attempted "[t]o meet the emergency in the petroleum industry; to increase employment, establish fair and adequate wages, enlarge the purchasing power of persons related to this industry and improve standards of labor; to conserve the Nation’s petroleum resources and to prevent physical and economic wastes which demoralize the national market...

"This report responds to a November 2010 request to the Energy Information Administration (EIA) from U.S. Representatives Roscoe G. Bartlett, Marsha Blackburn, and Jason Chaffetz for an update to a 2008 report prepared by EIA that provided a snapshot of direct federal financial interventions and subsidies in energy markets in fiscal year (FY) 2007, focusing on subsidies to electricity...

"I HAVE today issued a Proclamation adjusting and regulating imports of crude oil and its principal products into the United States.

The Voluntary Oil Import Program has demonstrated to me the willingness of the great majority of the industry to cooperate with the Government in restricting imports to a level that does not threaten to impair security. I commend them, and to me it is...

"I AM TODAY further modifying Proclamation 3279, March 10, 1959, which established a mandatory oil import control program within the Department of the Interior.

The purpose of this amendment is to permit, effective April 1, 1961, the orderly entrance of new importers, who do not currently qualify as importers, into the residual fuel oil markets of the East Coast. These new importers...

"A Bill To amend the Internal Revenue Code of 1986 to terminate certain energy tax subsidies and lower the corporate income tax rate."

To move the United States toward greater energy independence and security....

According to the U.S. Department of Energy, "The Energy Policy Act of 2005 (EPAct 2005) established a number of energy management goals for Federal facilities and fleets. It also amended portions of the National Energy Conservation Policy Act (NECPA)."

"Energy tax policy involves the use of one of the government’s main fiscal instruments, taxes (both as an incentive and as a disincentive) to alter the allocation or configuration of energy resources and their use. In theory, energy taxes and subsidies, like tax policy instruments in general, are intended either to correct a problem or distortion in the energy markets or to achieve some...

"Welcome to Part II of our hearings on the Environmental Protection Agency’s Mining Policies and the Environmental Protection Agency’s Assault on Appalachian Jobs.

The Appalachian region is being subjected to un-equal treatment under the law by the Environmental Protection Agency (EPA) for the arbitrary reason that it produces a domestic source of energy.

The United States...

"We've already made progress toward reducing that energy vulnerability. We've diversified our suppliers so that we are not unduly reliant on any single source. What's more, through the Strategic Petroleum Reserve, we've vastly improved our ability to respond flexibly to supply interruptions. And we have already begun moving on the path toward improved energy efficiency.

But we are, I...

"The bill recognizes that America is the world's leader in technology and that we've got to use technology to be the world's leader in energy conservation. The bill includes incentives for consumers to be better conservers of energy. If you own a home, you can receive new tax credits to install energy-efficient windows and appliances. If you're in the market for a car, this bill will help you...

When the savings of new, more energy efficient technologies exceed the costs of adopting those technologies, markets have the incentive to adopt them. Indeed the difference between the savings and the costs is the measure of the increased value the economy generates.

"Resolved, That the House of Representatives should--

(1) provide no new energy subsidies by refusing any legislative proposal that includes new energy subsidy programs of any kind;

(2) prohibit the expansion or extension of existing energy subsidies;

(3) eliminate existing energy subsidies; and

(4) begin tax simplification and reform by eliminating energy tax...

"The United States relied on net imports (imports minus exports) for about 45% of the petroleum (crude oil and petroleum products) that we consumed in 2011. Just over half of these imports came from the Western Hemisphere. Our dependence on foreign petroleum has declined since peaking in 2005."

Dated a couple of months before Solyndra declared bankruptcy, this letter from Solyndra CEO, Brian Harrison updates the U.S. House Committee on Energy and Commerce on the company's progress.

"Summarized below are the consensus views of the six banks named above regarding the minimum conditions necessary for a workable loan guarantee program as authorized by Title XVII of the Energy Policy Act of 2005 that can achieve the twin goals of supporting the financing of new nuclear plants in the United States while adequately protecting the U.S. taxpayer."

"For the first time, it will allow private ownership in the United States of special nuclear materials--the materials used as fuels for nuclear plants.

We have made the most substantial progress in this Nation since 1954 in developing peaceful application of atomic energy particularly in the generation of electric power with nuclear reactors.

The new law recognizes that great...

This document relates President Johnson's comments on nuclear energy. According to Johnson, much progress had been made in 1966 toward harnessing nuclear energy for purposes other than weaponry. Johnson concludes by exclaiming over "what a great force nuclear energy can be for peace."

Here the Supreme Court ruled that the Environmental Protection Agency must develop automobile carbon dioxide (C02) emissions standards because the relationships of CO2 and other greenhouse gasses to global warming pose "a risk..."

"Natural gas production from hydrocarbon rich shale formations, known as 'shale gas,' is one of the most rapidly expanding trends in onshore domestic oil and gas exploration and production today. In some areas, this has included bringing drilling and production to regions of the country that have seen little or no activity in the past. New oil and gas developments bring change to the...

"Natural gas plays a key role in our nation's clean energy future."

"Due to the growth in natural gas production, primarily from shale gas, the United States is benefiting from some of the lowest prices for natural gas in the world and faces the question of how to best use this resource."

"To amend the Internal Revenue Code of 1986 to encourage alternative energy investments and job creation."

The implications of this cap-and-trade are devastating for the American people and for the American refining and petrochemical industries.

"As we sit here today there are approximately 440 commercial nuclear reactors operating around the world. One hundred and four of them are operating in this country alone. With the exception of a few highly publicized and, I might add, mostly misunderstood, accidents, these reactors have operated safely, cleanly, and to the benefit of society for most of their lifetimes.

This is not to...

"This study assesses the commercial viability of advanced nuclear technology as a means of meeting future demand for electricity by comparing the costs of producing electricity from different sources under varying circumstances. The Congressional Budget Office (CBO) estimated the cost of producing electricity using a new generation of nuclear reactors and other base-load technologies under a...

In a speech at Georgetown University, President Obama outlined his energy policy for the nation. While past presidents have continually argued for the need to reduce America's dependence on foreign oil, President Obama urged reduction on all oil dependency. Furthermore, the President condemned the idea that increased domestic oil drilling will solve the energy problems the nation faces.

Discussing plans for the Recovery Act, President Obama particularly emphasizes government support of jobs in the energy sector as a method for reviving the economy.

"The use of horizontal drilling in conjunction with hydraulic fracturing has greatly expanded the ability of producers to profitably recover natural gas and oil from low-permeability geologic plays—particularly, shale plays. Application of fracturing techniques to stimulate oil and gas production began to grow rapidly in the 1950s, although experimentation dates back to the 19th century....

In this speech, President Nixon outlined some of his energy policies. Nixon stated that "A sufficient supply of clean energy is essential if we are to sustain healthy economic growth and improve the quality of our national life." Among other things, Nixon suggested that the U.S. "[b]egin work to modernize and expand our uranium enrichment capacity."

In a speech accepting his party's nomination to run for the presidency, Ronald Reagan described Jimmy Carter's approach to energy policy as "weak" and "based on the sharing of scarcity." Reagan went on to encourage innovation and less regulation in the American energy sector.

"A more abundant, affordable, and secure energy future for all Americans is a critical element of this administration's economic recovery program. While homeowners and business firms have shown remarkable ingenuity and resourcefulness in meeting their energy needs at lower cost through conservation, it is evident that sustained economic growth over the decades ahead will require additional...

In Executive Order 12287, President Reagan overturned price controls on domestic oil production. This statement describes President Reagan's reasons for this move, one of them being the fact that "[p]rice controls have ... made us more energy-dependent on the...

"Restoring America's energy security has been a top priority since I assumed office. We have changed regulations and laws, held discussions with our neighbors concerning a North American accord, and increased cooperation with our friends and allies to enhance our energy security. The United States has made dramatic gains in augmenting production and enhancing efficient consumption of energy....

Consider Solyndra, the now-bankrupt California solar panel company, which was once the poster child of the administration’s 'green jobs' initiative. Solyndra is proving to be Exhibit A in the case for why the president’s economic policies have failed.

"The question of green job creation is simply a variant on the general question of whether or not government can create jobs. That question has been debated since at least the 1850s, when Frédéric Bastiat, a French journalist and politician wrote 'What is Seen, and What is Not Seen,' an essay that should be mandatory reading for anyone interested in public policy."

The NRDC's testimony deals with nuclear subsidies, spent fuel reprocessing, and nuclear waste. They argue loans should only be available to radically new nuclear power plants. This is to offset first-mover costs. They claim the current loan system amounts to subsidizing a mature industry. Secondly, they argue that reprocessing is not currently feasible and the government should table this...

"Energy markets work best when free market forces drive decisions on how oil and gas are produced, transported, and purchased. This is normally the case for private firms and can even be the case for state-owned oil and gas companies. But governments can and should play a facilitating role. Governments should put in place the right business climate to attract investment and should work with...

I appreciate the opportunity to appear before the Select Committee to discuss the effects of the Recovery Act on our economy with respect to non-traditional green job creation.

Oil entrepreneur, Mr. T. Boone Pickens, participates in a U.S. Senate hearing to examine the challenges and solutions to developing energy security from domestic resources. Pickens emphasizes that imported oil is the main cause behind domestic energy woes.

"Despite growing political and public support for nuclear power, progress toward actually building any new plants has been a struggle. While the blame for this stagnation often goes to inefficient government subsidy programs, the real problem lies in why those subsidies are necessary to begin with. Chief among these structural problems is the nation’s incoherent nuclear waste policy....

"Meeting the energy, environment, and climate demands of the 21st century will require creating new solutions and reimagining older but still crucial technologies. Civil nuclear technology combines elements of both approaches. And while large reactors that produce in excess of 1,000 megawatts of electricity are the most common, they are not the only possible designs for power stations. Small...

Part 1 of the Energy Security Act of 1980, Pennsylvania State University declares that this act "[e]stablished the Synthetic Fuels Corporation (which only existed until 1985) for the purpose of partnering with industry for the creation of a market for domestically-produced synthetic liquid fuels; moved research and...

In the 2007 State of the Union address, President George Bush asked Congress and America to "join him in pursuing the goal of reducing U.S. gasoline usage by 20 percent in the next ten years - twenty in ten."

"I am pleased to be here today to participate in your hearing on the challenges and opportunities related to the potential development of unconventional oil and natural gas resources. As you know, fossil fuels are important to both the global and U.S. economies, and among other things, we rely on oil to fuel our transportation vehicles and on natural gas to a significant extent to heat and...

"Currently (as of July 2012), there are 104 commercial nuclear reactors in the United States."

"The use of horizontal drilling in conjunction with hydraulic fracturing has greatly expanded the ability of producers to profitably produce natural gas from low permeability geologic formations, particularly shale formations. Application of fracturing techniques to stimulate oil and gas production began to grow rapidly in the 1950s, although experimentation dates back to the 19th century....

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FAQs

This FAQ examines the primary types of renewable energy available to us today, some instances of both failed and successful renewable energy companies, and what the future might have in store for this sector of America's energy industry.

This FAQ looks at how fracking works, its history, and the debate surrounding it which has become a primary political issue in many states across the country.

Solar energy has been at the forefront of the alternative energy discussion for decades. At times, solar power has shown more potential than any other renewable energy source. In other instances, the technology has failed miserably. The most fundamental obstacle is finding a way to lower its cost. Currently, solar power is simply not able to provide our homes with affordable energy. Government...

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