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Where Would We Be Without Fracking? September 16, 2013 11:59 AM | Tagged as fracking
WSJ Sept 7, 2013, Page A14: “Fracking and the Poor” (editorial)
WSJ Sept 10, 2013, Page A16: More on Fracking and the Pool (editorial)
Hydraulic Fracturing, aka fracking, has been a game changer for the past few years in energy prices. This is producing a windfall for consumers, particularly the poor.
The price of natural gas averaged about $7 per MMBTU historically, with wild swings up to $15 per MMBTU at times. Now the price is hovering around $2.80 per MMBTU. This windfall translates in lower electricity prices. Compared to prior gas prices, consumers have saved over $100 billion.
For the poor, this means that the best anti-poverty program is fracking, not the myriad of well-intended welfare programs devised by bureaucrats.
Why haven’t other countries taken advantage of fracking? A major reason is our supportive property rights. In the USA, land owners own the dirt under their land all the way to the center of the earth. In most other countries, the state owns the dirt under land owner’s property. Since the state has no incentive to use their property, fracking is less prevalent. Capitalism is at work in the USA, not so much elsewhere.
In China, for example, investors have begun the process of gaining permits for fracking, but largely to no avail. The population sprawl and the lack of private property rights have thwarted much of that development. China lives with their $13 per MMBTU gas prices.
In the USA, Big Enviros (insert: Sierra Club and Matt Damon) have attempted to stop this wonderful anti-poverty program. Their misguided rhetoric against fracking is increasing the disparity between the poor and the middle class, the opposite of their stated populist goal of closing the gap.
Dang, this capitalism stuff just keeps on working, in spite of our progressive leaders and cultural influencers.
Once again, Winston Churchill’s comment is appropriate:
“The inherent vice of capitalism is the uneven distribution of blessings. The inherent virtue of socialism is the even distribution of misery.” May capitalism thrive. It is our only way to prosperity.
[The Biz Bucks Blog is primarily written to former students of Biz Bucks training courses to encourage their daily reading of the three opinion pages of the WSJ. This refreshes principles of Biz Bucks courses and improves business acumen on topics not discussed in Biz Bucks training.]
Posted in Capitalism, Energy Policy | 0 Replies
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