Hydraulic fracking has resulted in a boom in the Bakken oil shale formation under North Dakota and Montana. North Dakota is now the No. 4 state in oil production.
And hydraulic fracking has made commercially viable huge volumes of natural gas previously imprisoned in shale rock in western Pennsylvania and West Virginia.
The U.S. Energy Information Administration has estimated that there is at least six times as much natural gas available now as a decade ago as well as a big increase in commercially recoverable oil.
All thanks to hydraulic fracking, a phrase I bet you didn’t hear in the energy debate in the 2008 presidential campaign or in the debate over the cap-and-trade bill passed by House Democrats in June 2009. My (perhaps defective) search for the phrase in the New York Times and Washington Post websites didn’t yield any mentions earlier than 2010.
While government’s ethanol subsidies and renewable requirements have made little difference, the private sector’s hydraulic fracking has increased our energy supply and reduced our dependence on dicey Middle Eastern oil.
This kicks back against the efforts of government under the Obama administration to restrict energy supply. The administration has shut down much offshore drilling in the Gulf of Mexico (even though Obama cheered Petrobras’ drilling off the shore of Brazil) and has been denying permits for oil drilling in Alaska that is needed to keep the pipeline pumping. This on top of environmental groups’ successful attempts to prevent drilling on the desolate tundra of the Arctic National Wildlife Refuge. …
… There is a lesson here for public policy generally, including health care. No centralized government expert predicted the vast expansion in energy supply from hydraulic fracking. It was produced by decentralized specialists in firms subject to market competition.
Just as Friedrich Hayek taught, no central planner can know or foresee enough to produce the beneficial results regularly produced by competition in free markets regulated in accordance with the rule of law. And no central planner can accurately predict the course of innovation that can be achieved in decentralized markets.