Paul Krugman has written an editorial posted on Truthout. Basically, he says that falling oil prices might render some fracking operations less-than-feasible economically. The 'drill baby, drill' mentality that has seemed to rule our domestic oil production was made possible by horizontal drilling combined with fracking; when oil prices are high, it is economically (though not environmentally) feasible to frack in order to extract oil from shale beds. The so called 'patriots' told us that it would be good for the United States to have all this fracking because they reasoned that if lots more oil is produced here, we won't have to import as much. However, we all know the oil companies sell this oil to the highest bidder, so the only real bottom line impact is to increase profits for oil companies. Same for the fracking process; these same 'patriots' tell us fracking is good for us, but if you think it through, it is only good for increasing profits for oil companies. At BEST, it is neutral for us, unless, of course the fracking fluid is spilled or leaks into the water table. Then it's not so good for anyone.
But now, oil prices have gone down. Krugman is saying that as this happens, more and more fracking operations will be too costly to break even for the oil companies, so they will stop in these cases until the price per barrel rises again. He says it may contract the economy when these operations are put on hold. He doesn't say the word 'recession,' but in my state of Colorado, our economy could slow down because of it.
Since we now have higher carbon dioxide levels in the atmosphere than we have ever had, and we're getting alarming climate reports from all over the world, now would be the time to be way more aggressive in trying to convert us to much higher percentages of energy coming from renewables. In spite of what Alison Lundergen Grimes said while pandering to the coal industry in KY, coal is certainly NOT the way to go. There is no 'clean' coal.
So do you guys think we'll actually have the wisdom and fortitude to lead the world in converting to renewable power sources? The political will?
LOL. Nah. But here's Krugman's article, which is his first take on the oil price plunge.
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About PatrickforBCounselor, economist and public servant.
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