Popular Posts

Sunday, December 30, 2012

Welcome to Saudi Albany?

Most observers would agree, though, that changes in regulation do not come from objective scientific studies. (Both sides, after all, can flood any government hearing with experts and impressive-looking scientific reports.) Regulations are determined, in large part, by politics. And the politics of fracking are changing and are very likely to change drastically in coming years. As examples from the last century suggest, the sudden discovery of oil and gas can transform an entire economy and regulatory system to serve the industry’s interests. Economists call this the resource curse — the perverse process in which a valuable discovery like oil, gas, diamonds or gold ends up enriching a few at the cost of impoverishing most of the population. At its worst, the resource curse leads to deeply corrupt regimes like those in Iraq, Iran, Myanmar and Libya. At its mildest, this can create one-industry economies in which there is little innovation and even less resistance to the whims of a handful of powerful interests. Many believe this already describes the oil economies of Louisiana, Texas and Oklahoma and, increasingly, North Dakota, where the fracking industry is entrenched. Politically and economically, it’s hard to argue with an industry that has helped keep the state’s unemployment rate at about 3 percent.

If there is an uneasy equilibrium, right now, between environmentally concerned citizens and pro-fracking industrial groups, what will the political balance be like in a decade? What pressures will be on state legislatures and regulators if the projections are true and the millions of workers in Pennsylvania, Ohio, West Virginia and maybe New York will owe their jobs to fracking. There will be trillions of dollars of new wealth. Will environmental and health concerns have any chance against that juggernaut?

No comments: