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OK, New York: It's Time to Lift the Fracking Ban

Source: Chesapeake Energy.

While the New York state legislature still considers extending the statewide moratorium on fracking for another two years, I think it's time for the state to lift the ban. It's only a matter of time before the long-awaited studies on the environmental and public health impacts of fracking are finally completed. The odds that those studies will turn up anything catastrophic to the industry are very slim, given all the fracking that has been done throughout the rest of the country. 

The problems with fracking are not only well documented, but the industry has gone to great lengths to refine its process and address the issues. Also, there is compelling evidence piling up that speaks to the overall benefit of using the fracking process and the natural gas it produces. To demonstrate, I'm going to highlight three areas that give reason for why it's time for New York to lift the moratorium on fracking.

Economic impact
recent study by the Manhattan Institute highlighted the economic impact of fracking in New York's neighbor to the south, Pennsylvania, which has had 5,000 wells fracked since 2002. The data is compelling, as counties with more than 200 wells, drilled between 2007 and 2011, saw a 19% increase in per-capita incomes, versus just 8% income growth at those with no wells fracked. Further, the number of county jobs grew by 7% in those with more than 200 wells fracked, against a 3% contraction in counties with no wells drilled. According to the report, the data suggests that if New York had allowed its counties to fully exploit the Marcellus Shale, the income-growth rates for New Yorkers would be 6% higher than what they're currently experiencing.

As someone who grew up in New York, I had to make the tough choice a few years ago leave to the state to obtain better employment. There were simply more opportunities at better pay in Pennsylvania, which I can partially attribute to the states pro-fracking stance. Among the few industries that were hiring at the time were those tied to the Marcellus.

We find similar stories throughout the U.S., as economic activity in the country is higher and unemployment lower in areas, such as the Bakken of North Dakota or the Eagle Ford shale of Texas, where fracking is being employed to tap our vast oil and gas reserves. Just look at North Dakota, which has one of the lowest unemployment rates in the nation:

Safety record
While the economic benefits appear to be quite obvious, there are many who are concerned that we'd be paying much too high a price elsewhere. Among the areas of grave concern are the public health issues that are currently being studied. The fluids and chemicals used in fracking are among the areas of concern;however, this is an area where the industry is making great strides. Halliburton  (NYSE: HAL  ) , for example, has a whole suite of products it's moving forward on to clean up the process. The company's CleanStim Hydraulic Fracking Fluid System, for example, is made entirely with ingredients sourced from the food industry. 

Further, a recent study by the Department of Energy has concluded that fracking chemicals do not taint drinking water. After a year of monitoring wells in western Pennslyvania, researchers found that these fluids stayed thousands of feet below the areas that supply drinking water. This study should go a long way to calm fears that fracking chemicals end up in the drinking water. 

The other concern is that methane gas from a well could end up in drinking water. A few years ago, a well drilled by Cabot Oil & Gas  (NYSE: COG  )  in Dimock, Pa., had been linked to being the root cause of methane gas found in water wells in that town. However, the industry has gone to great lengths to ensure the safety of the drilling of wells in an effort to completely mitigate these concerns. The industry continues to improve the well completion process, with safety being a very high priority for the industry. 

Clean water
The whole issue of clean water is one the industry has also taken very seriously. Not only are drillers switching to safer fracking fluids, but many are also turning to recycling the frack water so that less freshwater is used. One company that's leading the way is Chesapeake Energy  (NYSE: CHK  ) . The company is working to recycle most, if not all, of the water it uses in fracking. 

In fact, its Aqua Renew process enables the company to filter and reuse 97% of the wastewater produced at its northern Marcellus operations and 89% of its wastewater from the Utica. Overall, the industry is working on a number of initiatives designed to reduce, reuse, and recycle water. Going back to Halliburton, it has recently partnered with Nuverra Environmental Solutions  (NASDAQOTH: NESC  )  on a pilot program in the Bakken Shale to recycle wastewater on site, as opposed to trucking it to offsite recycling facilities or simply pumping the produced water down disposal wells. This project, H20 Forward, aims to leverage Nuverra's vast network and knowledge with Halliburton's technology. If successful, the service could significantly cut freshwater usage and trucking volumes. 

Final Foolish thoughts
The hydraulic fracturing process has changed dramatically over the past few years. The natural gas industry has worked feverishly to clean up, and even green up the process. That's why it's really time for my home state of New York to lift its moratorium on the process, so the state's residents can enjoy the economic prosperity that would come from unleashing the power of the natural gas locked underneath the state.

Even if New York decides not to frack, record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, The Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Read/Post Comments (17) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 28, 2013, at 2:48 PM, zombieboy79 wrote:

    It seems to me that natural gas companies should be made accountable to the Clean Water Act, the Safe Drinking Water Act, and Clean Air Act to which they are now currently exempt. If these companies are truly making efforts to make their activities safe for the surrounding environments then shouldn't they be able to conform to these laws which all other industries must also abide to?

    Perhaps if the natural gas companies want to be in the good graces of environmentally conscious people, then they should commit to having the government close the "Haliburton Loophole" from Energy Policy Act of 2005 which exempts natural gas companies from the very laws that make sure our water and air isn't poisoned.

    Sure it's nice to have cheap domestic energy that makes us a lot of money, but at what expense? Is it worth it to ruin the water we drink and the air we breathe?

  • Report this Comment On July 28, 2013, at 4:20 PM, fleaween wrote:

    I disagree, it"s not worth it! The fact is it does contaminate the water table, and as well releases a huge amount of methane. The fact that with global warming happing and the permafrost releasing a unknown amount of methane into the atmosphere, we shouldn't even take the chance.

    The fact that we have the technology to power all of our needs with solar, wind and hydroelectric, but sill chose to use these type of fossil fuels is shocking. This just enforces to me the fact that its all for monetary gain. I hope at some point the corporations (Haliburton, Bechtel) realize that facts are facts. The reports are not bs. This most likely will not happen till some of there higher ups are directly affected

  • Report this Comment On July 28, 2013, at 4:23 PM, scottyurb wrote:

    First time visitor to this site, is this some kind of sarcastic joke or what? Pennsylvania is just about the most polluted state in the Nation. New York is not interested in following Pennsylvania's lead. Fracking operation's are all over the country, stashed in unpopulated regions where the damage to citizenry is kept hushed to a minimal. But for those residents that do live near these operation's we see earthquakes, numerous wastewater spills into drinking water and wells, water that catches fire from the tap, a whole plethora of health issues and a Lobby that bypasses local authority all in the name of corporate profit. To think that deadly carcinogens are safely tucked away under the water table is "worth the risk". To back an industry that will not disclose the chemicals used in the process under the guise of "trade secrets" is hardly worth the risk...

  • Report this Comment On July 28, 2013, at 4:23 PM, TirasB wrote:

    Do not allow fracking !It is ruining our drinking water in our wells in Arkansas.When I moved to Arkansas 25 years ago the well water was fresh and clear now though it has a strong smell of oil.

    Take time friends for the evidence take time to protect your health and that of your children and for dairy farmers your animals.

    These are reckless and destructive companies.They care nothing for your land,water or wildlife.

  • Report this Comment On July 28, 2013, at 5:51 PM, andiconda wrote:

    You wrote this article? your pathetic Fracking is a known environmental destroyer. Spin your nonsense logic anyway you want but your doing the human race a disservice and it should be a crime. shame on you

  • Report this Comment On July 28, 2013, at 5:55 PM, Oilvet wrote:

    I still go with the old Texas saying about nese NE liberal-----Let the bastards freeze in the dark-----

  • Report this Comment On July 28, 2013, at 6:30 PM, bbaronjr wrote:

    I would like to hear what alternatives the anti fracking crowd has to offer. Should we keep burning coal which does far more damage to the environment? The EPA recently completed a year long tracer study in PA whereby their released findings were that they could find no groundwater contamination caused by fracking. Stop making stuff up about contaminated drinking water. Too bad you don't have a glass stomach so that you could see where you were going without taking your head out of your arse.

  • Report this Comment On July 28, 2013, at 6:56 PM, nappyfs wrote:

    Gee. perhaps you should watch the two HBO specials..Gasland 1 and Gasland 2,

    They both point out the REAL dangers of fracking to both ground water ans the environment..The release of huge amounts of methane into the atmosphere, methyane being one of the most dangerous gases affecting the warming of the atmosphere..which leads to global temperature rise, the meltng of the ice caps.. i mean really guys...DO YOUR SCIENCE HOMEWORK .

  • Report this Comment On July 28, 2013, at 8:06 PM, snowhawke wrote:

    The latest studies by government show that fracking is not nearly the environmental problem that the hysterical objectors claim. Who you gonna beleive, Gasland masterminds or the EPA/DOE?

    There ARE political reasons why the moratorium is obliged to continue. Here is just ONE:

    New York City, for it's own reasons, is intent on increasing its land holdings in the catskill region by about 100,000 acres, plus or minus(, according to this EPA report. If fracking were allowed to happen, how many landowners would sell out to the city? The answer is zero. Instead of being taxed out, the landowners would have positive cash flows and they would never let go.

    NY City and corrupt,disgusting, pandering politicians trump private landowners and their non existent rights every time. Wake up people, the government wants your lands and it will force you to sell out and become a landless serf.

    When the city gets all the lands it wants,(if it ever does) fracking will be found to be harmless.

  • Report this Comment On July 28, 2013, at 9:01 PM, tikiskis wrote:

    And this is why I cancelled my Fool subscriptions. They lost perspective on balancing economic needs with public safety.

  • Report this Comment On July 28, 2013, at 9:18 PM, Frackman wrote:

    A well written article that has only facts and science behind it not some scenes from a glory seeking film director. Fracking has been around far to long with no Scientific evidence of any ground water contamination from the process itself. There have been a few cases in the early stages where a well casing has leaked causing localized contamination to a few residents wells. Since those happened Well casing have been redesigned and this no longer poses this risk.

    New York is extremely political in its decision to restrict us landowners from leasing and drilling OUR land. The science is in and it is safe when done with proper regulation and New York has written a 765 page SGEIS clearly regulating the industry to extremely high standards. Time to Start Drilling you can start on my property.

  • Report this Comment On July 29, 2013, at 8:15 AM, fingerlakes13 wrote:

    After reading hundreds of articles, studies and rants, both pro and con on tracking, the personal stories are the most compelling. Go to List of the Harmed website. There are approx. 1,500 stories of families living near gas wells nationwide. Read as many as you can and then think about whether or not you would like to trade places with these folks. I am sure many would be happy to send you samples of their water that EPA and DEP (Pa) says are safe to drink. Do your homework and don't be a fool.

  • Report this Comment On July 30, 2013, at 1:14 AM, Prvs8760 wrote:

    Natural gas is a bridge to nowhere. It undermines progress on clean energy and is dangerous for our climate.

  • Report this Comment On July 30, 2013, at 9:24 AM, rtekosky wrote:

    If fracking turns out not to be safe - polluting NYC's water supply is a potential result. Why are the frackers who will make billions, always lobbying to LIMIT their damages?

    IF they are wrong, they aren't nearly as exposed as is the public.

    So why is this even a debate?

  • Report this Comment On August 05, 2013, at 2:30 PM, BBen719 wrote:

    I completely agree with the majority on this page. Fracking must be kept out of NY at all costs! How could you possible think that cracking rocks, which took nature millions of years to produce, by injecting carcinogenic chemicals into the ground is in any way safe? I know this sounds extreme, but I really think that this is the beginning of the end. The Global shale initiative fracking all over the world is probably going to double the global warming rate until we're all f*%#ed. We have all seen the increase in negative weather worldwide and don't seem to realize that something needs to change. Hubris is going to be our downfall.

  • Report this Comment On August 24, 2013, at 10:07 AM, MelNY wrote:

    I've lived near fracking for about 15 years. I don't live in an "unpopulated region," but a beautiful suburb with an excellent school district outside a major city. There is a bidding war for every house that comes on the market in my town. The drilling that we have here is hardly noticeable, and has caused no problems. In fact, I read about the fracking in my town in a magazine article-it's that unobtrusive. Instead of speculation and crazy exaggeration, why doesn't NY just look at other areas where this is being done? It's no big deal, but NY seems to live in a provincial bubble and considers itself "different" than other states. It may be different in that it leans left, but drilling is going on everywhere. I'm always surprised that NY, which is supposed to be so "progressive" still doesn't know anything about it. Oh yes, and I don't "work for the industry" which always causes me to chuckle, as if to be pro-drilling you must be bribed or 'paid off' by the industry.

    The earth's temp has been the same for the last 15 years, and a couple of decades of fossil fuels won't make a dent. By then, we will have perfected other means of energy. There is drilling at a local airport, and it reaps 45 million dollars per year in royalties, all of which is spent on reviving public buildings and maintaining the airport, which is about the size of Manhattan. Look at other places-don't re-invent the wheel.

  • Report this Comment On September 15, 2013, at 12:44 AM, BillFromNY wrote:

    If New York does not want to exploit its natural gas resources, I don't think the country needs it. The proven natural gas reserves are already off the charts and most are located in areas not so densely populated. The people that will suffer are those who reside in the economically depressed regions of upstate New York. And the narrow minded Luddites who comment here certainly don't care about them.

    If the industry really wants to overturn the ban on fracking, then they should offer to be exorbitantly taxed by the state. New York can never pass up another good tax.

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