Why You Should Ignore the Negative Noise About Fracking

Mark Ruffalo is an idiot.

The Hollywood actor may be decent on the big screen. I’ll leave that to you. But a couple weeks ago, he proved to be a real-life idiot.

You see, today, I want to go slightly off script and talk about the politics of oil and gas. We’ll cover a little bit about climate change and the greater effects of hydraulic fracturing, or “fracking” (an integral part of America’s energy boom) — all in an effort to get some little-known facts out on the table.

Indeed, I receive emails all the time as managing editor of Daily Resource Hunter, to the extent of: “Matt, I don’t want to invest in something that harms the environment. I keep hearing that fracking is polluting everything. Is that true?”

Today, we’ll walk the tightrope of the environment, politics and investing. Like you, I don’t want to invest in something that will send the world into an unstoppable tailspin or lead Earth to one of those zombie scenes you see on TV. Heck, that’d be like investing in ISIS. And that’s not what we’re about in these pages.

Today we’ll pull back the curtain on the whole fracking industry.

Now, let’s get back to Ruffalo…

I caught this gem on Twitter:

Mark Ruffalo - Misunderstanding What "Fracking" Is

Sweet sign, Mark. I’d love to hear you explain fracking to me.

Ruffalo, along with other celebrities, politicians and plenty of the bourgeoisies marched the streets of New York for the fight against climate change. The donned signs… chanted catchy slogans… and more.

Unfortunately, most of the climate change folks (including Ruffalo) have a poor grasp on the connection between fracking and the fight against climate change.

Making this all too obvious, Ruffalo held the sign above that reads “FRACKING = CLIMATE CHANGE.”

Wow. This B-list actor must have received an “F” in math class. Fracking doesn’t equal climate change. In fact, as you’ll see, it’s the exact opposite.

It’s a massive shame that the thousands of folks marching on New York, and in general “kids these days,” don’t realize the real power of what’s happening in America’s shale plays.

Fracking isn’t pollution. It’s potential.

Over the past 10 years, the U.S. has turned the ship around, quite literally.

We’ve gone from a country that was expecting to import massive amounts of oil and gas — to a country sitting on massive supplies of recoverable oil and gas, right under our own soil.

This huge shift in global energy is all a result of two technologies: horizontal drilling and fracking. Both technologies are equally important. But for today’s purposes, “fracking” is the buzz word.

Celebrities and activists alike are creating an environmental boogeyman out of the fracking industry. These folks pose that hydraulic fracturing pollutes groundwater. They pose the idea that it fuels climate change. In both cases, the naysayers are wrong.

Thousands of wells per year are utilizing this long-known technology to make great leaps forward in production. They’re doing it safely, too. Since hydraulic fracturing occurs nearly a mile below the water table, separated by impermeable rock, the risk of an effect on groundwater is statistically close to nil.

Meanwhile, fracking has unleashed a wave of economic potential and prosperity in America.

With natural gas, we’re seeing all-time highs in production. Since domestic gas is essentially stranded here in the U.S. market (with exports slow to ramp up), we’ve got an abundance of clean-burning cheap fuel. From residential to industrial use, this natural gas is putting the U.S. back on top.

…if you’re against oil and gas, then you should also be against most things in a modern lifestyle.

Oil production is booming, too. With the newfound oil bounty under U.S. soil, we’re less dependent on Middle East production. The gas lines of the ’70s? That may be a distant memory by the time America’s shale boom has played out. That’s great news for every American.

Indeed, the anti-fracking celebrities, politicians and activists have it wrong — in epidemic proportion.

Fracking = Potential

Remember, energy is important.

It’s silly to have to remind folks of this — but with climate change marches on the mind, it helps put things in perspective…

Energy keeps the lights on… transports food… makes quick travel from LA to NYC possible… powers cellphones… creates building materials and plastics… powers the Internet… etc. Take a quick look around right now and you’ll see energy is an integral part of it all.

That seems obvious, I know. But kids these days, some politicians and some celebrities don’t seem to get it. The point is if you’re against oil and gas, then you should also be against most things in a modern lifestyle. Add in the fact that there are 7 billion folks on planet Earth striving for modern conveniences that we take for granted, and there’s a need for a lot more energy.

Connecting the dots even more, it’s extremely foolish to think that America (or the world) could economically sustain living on renewable energy. Right now, renewables account for 13% of U.S. electricity production — hydroelectric dams account for half of that. And solar, for instance, accounts for less than half a percent of U.S. electric generation.

Needless to say, moving directly from the current mix of coal, natural gas, nuclear and renewables to a fully renewable electric grid is IMPOSSIBLE.

I just don’t think people get it these days. Present company excluded, of course. Renewables in an “ideal” sense are great — but, as the saying goes, so is communism.

Today, the U.S. runs mainly on coal. COAL! That’s reality. Coal is the major reason that we have power for our laptops or juice for our smartphones.

Renewables are a far cry from keeping the lights on. Instead, it’s coal, with 39% of the U.S. electricity market, and then come natural gas (27%) and nuclear (19%.)

That said, let’s get back to my comment above about Ruffalo’s sign “FRACKING = CLIMATE CHANGE.”

The truth is the exact opposite.

You see, fracking unlocks trapped natural gas. And when used for electricity generation, natgas produces approximately half (51%) the CO2 emissions of coal. Said another way, a switch to natural gas electricity from coal would cut the threat of climate change in half.

Better yet for your reality-loving editor, natural gas-powered electricity is quickly scalable. Meaning it can take the place of coal quickly — something we’ve seen happen over the past few years.

Here’s the kicker…

…to say that “fracking”… equals climate change is downright idiotic.

America’s natural gas boom, brought about only with the advent of fracking, is decreasing America’s CO2 output (the bailiwick of the climate change argument). That is, without fracking, we’d be using more coal. But with fracking, we’re using much more cleaner-burning natural gas.

So to say that “fracking” increases the risk of climate change is dead wrong. To say that it equals climate change is downright idiotic. Today, fracking is moving the needle in the right direction and bridging the decades-long gap to cleaner-burning fuels. It really is a feel good story right here in America.

So not only has fracking proven to be safe, but it’s also proving to be a game changer for the U.S. economy and the environment. Fracking = potential.

Maybe celebs should focus their eyes on a much less regulated beast. China’s pollution situation is spiraling out of control. According to Bloomberg, China recently passed the EU in per capita pollution for the first time. So while the U.S. CO2 footprint is ebbing, China’s is starting to flow. And you guessed it: China is the world’s largest consumer of coal.

Well, we’ll leave that for the “experts” to tackle. In the meantime, I’ve given you my take on the positive side of the oil and gas industry. Now you can decide for yourself.

Keep your boots muddy,

Matt Insley
for The Daily Reckoning

P.S. If you’re looking to get started, investing in today’s shale patch, you don’t want to look past the well-run producers. I gave my Daily Resource Hunter readers the names of three great companies to get them started. If you’d like to learn more about this and a host of other great investment opportunities in the resource and energy sectors, you can click here right now to sign up for Daily Resource Hunter for FREE.

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