The Fracking Debate Is Over and Fracking Has Won

You may have noticed we haven't heard too much lately from groups opposed to the drilling practice, which involves sending millions of gallons of water and chemicals into the ground to free up oil and natural gas deposits trapped in rocks.

Their last big push seems to have come last year, with the film "Gas Lands II," about the possible ill effects that fracking Pennsylvania's Marcellus shale could pose to the Delaware River basin, at the vanguard.

But since that time, we have only seen more development. Oil production is now at a 28-year high, while gas production is at all-time highs. There are now even plans to snake a new natural gas pipeline under the west side of Manhattan.

There is a lot of evidence natural gas production harms the areas around where it occurs. Last month, a Texas jury awarded a suburban Dallas family $3 million for health effects suffered as a result of natural gas production activity near their home. Countless other families have privately settled with drillers over similar claims. Scientists say injecting fracking waste water into the ground probably causes earthquakes. And the oil and gas boom has also led to an increasing number of literal booms on trains transporting crude, as well as ruptured pipelines.

Despite all this, it is now safe to say the debate is basically over: Fracking has won.

At the FT's Oil and Gas Strategies Summit Wednesday in Manhattan, Rhodium Group's Trevor Houser contended that the Great American Shale Boom has been America's best economic story, adding up to 50 basis points of growth since 2008, and with the potential to add a further 20 bps through 2020 through lower energy prices, capital investment and jobs. "It's worked like a government stimulus, " he said, but without anyone in Washington having to get involved.

EIAAnnual U.S. natural gas production.

The Obama administration has recognized as much. Though the president has proclaimed an "all of the above" energy development strategy, the FT's Ed Luce argued this weekend that it's really been about "one of the above": gas. With the exception of stalling approval of the Keystone Pipeline - the debate around which is largely symbolic debate, and the importance of which the market is now finding ways to reduce - the administration has done nothing to impose federal regulations on fracking. What's more, the EPA's new CO2 regulations take direct aim at U.S. coal production, natural gas's main rival for electricity output. Combined with overall declining energy consumption and intensity in the U.S., coal production has declined 16% since 2008. Though the administration has vowed to revive nuclear, there have been more plant retirements than new plants built. Renewables have surged, but that's mostly been thanks to factors having nothing to do with Washington.

Obama can reasonably argue that allowing the natural gas boom to unfurl is part of his plan to fight climate change. For all its apparent ill effects locally, most experts agree the rise of natural gas has lowered CO2 emissions by displacing coal. While there remains some debate about whether methane leaks from gas wells ultimately cancel out the coal displacement effect on the environment, many scientists now advocate the expansion of natural gas production technology, and natural gas exports, to places like China as a means of helping to end their coal.

The debate over fracking is still simmering in some states. In New York, the oil and gas industry continues to urge Gov. Andrew Cuomo to open up the state for drilling. In Colorado, environmentalists are urging Gov. John Hickenlooper to impose a moratorium. But the issues have been before both leaders for years, and neither has shown much interest in making a decision either way - meaning New York remains the lone victory anti-fracking groups can point to.

The EIA projects natural gas production to continue well into the future, though there's more uncertainty about how long the shale oil boom can continue, given outstanding questions about prices, demand, and depletion rates. (And some groups do question the EIA's gas production estimates.)

Either way, as long as the booms are able to last, the country seems to have decided that it is willing to tolerate their local impacts for their apparent greater benefit.