Tennessee’s Fracking Controversy

Shale gas deposits underlie about a third of the State of Tennessee. Tapping that low-carbon resource is essential if electric utilities there and across the nation have any hope of complying with the Environmental Protection Agency’s Clean Energy Plan, which mandates a 30 percent reduction in carbon dioxide emissions by 2030.

Yet environmental groups are fighting furiously against proposals to recover Tennessee’s abundant natural gas supplies because doing so requires expanding hydraulic fracturing (“fracking”) of the state’s shale formations. That opposition is both perverse and disingenuous of people demanding action against climate change, not by shifting from coal to natural gas, but instead by relying more heavily on solar and wind power to meet the nation’s energy needs.

“Perfect” energy options have become the enemy of “good” and practical ones.

Generating electricity from renewables hinges on the availability of other energy sources on days when the weather isn’t cooperating. Without natural gas as a backup, the sun and the wind are not reliable enough to supply today’s energy demands. Solar and wind combined contribute less than 5 percent of the nation’s electricity requirements – and that share would be much smaller but for tax credits and state mandates requiring greater reliance on renewable energy sources.

Wind turbines, on average, generate electricity 25 percent of the time and solar arrays are online even less regularly. The nation’s base-load natural gas and nuclear-powered plants, in contrast, produce electricity over roughly 90 percent of the day and the year.

Although energy companies have been buying mineral rights to the Chattanooga Shale in the eastern part of the state, fracking has yet to take hold in a big way because it hasn’t been profitable at today’s low natural gas prices. But if and when those prices rise or new drilling innovations reduce the cost of fracking, gas production will take off.

Even now, though, TVA needs the state’s natural gas – and additional nuclear power – to reduce its reliance on coal-fired electricity generators. And Tennessee needs the jobs and other huge economic benefits that will come with more natural gas production.

There’s a lot at stake. The University of Tennessee wants an energy company to frack on about 8,000 woodland acres maintained as an outdoor laboratory on the Cumberland Plateau. The lease revenues potentially total hundreds of millions of dollars. The university has proposed using some of that revenue to support research on fracking’s environmental risks. But corporate funding of public institutions of higher learning is anathema to Greens and some faculty members, who contend that such a pact with the “Devil” creates a conflict between the public’s interest and that of external sponsors.

The reality is that universities nationwide face mounting pressures to increase corporate funding to offset ongoing reductions in government spending on teaching and research. There’s nothing wrong with this. To the contrary, private financial support for universities has led to breakthroughs in everything from biotechnology and computing to public health. Why not use oil and gas money to support good science at Tennessee’s flagship school on fracking or to endow a chair in petroleum engineering?

Fracking is underway nowadays in a dozen states around the country. Shale formations underlie a wide swath of Appalachia, and the oil and gas industry is eager to expand its fracking operations into New York, North Carolina, and Maryland. No one can deny the huge economic potential of the Chattanooga Shale, which is an extension of the giant Marcellus Shale to the northeast.

Fracking ordinarily involves injecting large amounts of water underground under high pressure, but the Chattanooga Shale is too fragile for that, so nitrogen gas is injected instead. That process reduces the quantity of water needed for drilling, leaving more available for irrigation and other uses. Hence, there is little or no need for wastewater injection wells in Tennessee, a recovery technique that has been linked to incidents of groundwater contamination – but only a few of them – since fracking began in the 1940s.

The growth of shale-gas production has produced unquestionable environmental benefits. Natural gas has less than half the carbon content of coal. Owing largely to a switch from coal to gas in electricity generation, U.S. greenhouse-gas emissions have fallen to 1990 levels. Fifteen years ago, gas accounted for 16 percent of national electricity production; its share has increased to 27 percent today. Coal use has gone in the opposite direction, plummeting from 51.3 percent of the total in 2000 to 39 percent today.

Neither Tennessee nor any other state can meet the EPA’s carbon-dioxide reduction goal without natural gas and nuclear power. If fracking is banned, electricity prices will go up, heating prices will rise, and the jobs created by the resurgence of U.S. manufacturing, all of which can be attributed to falling energy prices, will go by the wayside.

William F. Shughart II is Research Fellow and Senior Fellow at the Independent Institute, the J. Fish Smith Professor in Public Choice at Utah State University, past President of the Southern Economic Association, and editor of the Independent book, Taxing Choice: The Predatory Politics of Fiscal Discrimination.
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