Fracking stimulus beats Obama doldrums

American energy is booming and energy is driving the economy. It is a stimulus much larger, more effective and sustainable than anything the Obama folks have done. And it is reaching all over the U.S. Fracking is lowering energy costs and reducing pollution. It is giving business to railroads, jobs to truckers and money to rural landowners. Beyond that, the fracking boom is stimulating a renaissance in heartland industries, such as fertilizers, plastics and other petrochemicals.

My sister in law owned a farm in western Wisconsin. It was a hardscrabble affair. She and her husband sold it when they retired; a little worried that their savings would not last long enough. They kept about ten acres of land, "a worthless pile of sand" that nobody wanted to buy at a price worth selling. You could not grow much on it and the shifting soils made it difficult to build. Then came the fracking boom in North Dakota. Fracking fluid is mostly sand and water and Wisconsin sand is particularly well-suited for fracking. My sister in law now has a secure retirement and is able to help with the education of her grandchildren thanks to the royalties from that worthless pile of sand.

This story is being repeated all over the American heartland. I suspect that the immense proportions of the success are under reported because much of the value and the jobs are going to smaller cities or rural communities outside the general purview of the bicoastal elites. But it is real and sustainable. This is not cash for clunkers or Solyndra pipe dreams. This is real and sustainable. And instead of costing billions, it is providing billions in earnings and taxes.

Of course there is also the conspiratorial reason to think it is under reported. The bicoastal elites tend to dislike both fossil fuels and the "hicks" in the heartland. Beyond that, if we understand the true engine pulling the American economy, what will we give Obama credit for doing?

W/o the fracking stimulus, our economy would be even more in the dumps and it may be fracking and its less expensive energy and abundant petrochemical complex that pulls us out.

Everything about fracking appeals to me. My blue collar heritage loves jobs for honest working people in an America is making real things, wealth through creation, not artificial stimulus or redistribution. The environmentalist in me sees the carbon reduction and the clean burning gas energy. My inner economist figures the potential salvation for an economy smashed by the great recession and then held in the thrall of the Obama doldrums. My spirit of enterprise is excited by the courage and imagination of the men who took this technology discarded by big oil and made it great. My sense of fairness is enamored with the spread of prosperity to my people of Middle America and my patriotism is exalted by American energy letting us give the middle finger salute to despots and tyrants that control foreign oil and gas. We did it again. Even Obama cannot hold us down. WE did it again.

Posted by Christine & John at December 4, 2013 4:19 PM
Comments
Comment #374773

The development of unconventional gas is a model of government/private cooperation which should serve as a template for solar and other high potential energy resources.

It took a fairly long time beginning with the initiatives of the Ford and Carter administrations. Government provided key support for R&D, including the first successful Massive Hydraulic Fracturing (MHF) demonstration. Government also provided tax incentives for investment in well head development.

It seems to me that we got it right with unconventional gas. Government provided long term and key support for R&D through the DOE and tax incentives for private investment. It supported risk taking and innovation in the private sector (Mitchell Energy).

As former Mitchell Energy Vice President Dan Steward said in an interview with the Breakthrough Institute, “Government has to be looking down the road. We really cannot wait to develop those other energies. Industry doesn’t look as far down the road as the government should.” http://thebreakthrough.org/index.php/programs/energy-and-climate/where-the-shale-gas-revolution-came-from/

Posted by: Rich at December 5, 2013 7:09 PM
Comment #374774

Rich

The frackers indeed built on joint research. But they fought against bureaucracies in big government and big business that had no faith in the process.

This is the challenge of innovation. Words and programs work fine for words and programs. But somebody has to make it work in real life. That takes innovation of a different sort. The frackers could not have won the internal battle for government funding and they did not.

I have found a serious disconnect in government. Those who write the best proposals are often not those who do the best jobs. In fact, there seems to be an inverse relationship.

In proposals, you get points for being “inclusive” having the right racial or gender balance. You get points for spreading your efforts. You get points for having a step by step plan, when innovation is almost always disruptive and not step by step.

So governments crucial role is to support basic science and science in what they call the “Pasteur quadrant” (Please look that up if you are unfamiliar. It is interesting) but then get out of the way. We don’t need more Solyndras and innovation is rarely “inclusive.”

Innovators are often assholes. It takes an asshole to believe and push so far. They are not the type that government officials like.

I see lots of proposals for many things. I am so completely sick of the questions about “gender balance” or racial justice or LGBT rights or helping the poor. These are good things in themselves, but when it comes to innovation there are only two sorts of things: those that work and those that do not. And in this we are truly colorblind & gender blind, or should be.

Posted by: CJ at December 5, 2013 8:18 PM
Comment #374776

“But they [frackers] fought against bureaucracies in big government and big business that had no faith in the process…The frackers could not have won the internal battle for government funding and they did not.”

C&J,

Not true. The story of the fracking success is a story of cooperative ventures between government and private industry. In addition, government also supplied generous tax credits for private investment in well heads.

“Mitchell Energy’s first horizontal well was subsidized by the federal government, according to former geologist and Vice President for Mitchell. “They did a hell of a lot of work,” said Steward, “and I can’t give them enough credit for that. DOE started it, and other people took the ball and ran with it. You cannot diminish DOE’s involvement.”

Variations of fracking techniques through the 1980s led George Mitchell to bring the Department of Energy and the Gas Research Institute in 1991. “By the early 1990s,” said Steward, “we had a good position, acceptable but lacking knowledge base, and then Mitchell said, ‘Okay, I’m open to bringing in DOE and GRI’ in 1991.” http://thebreakthrough.org/archive/interview_with_dan_steward_for

You may be correct about much of government grant funding. But, in this instance, it appears that government and private innovators like Mitchell worked in a mutually supportive manner.

I don’t necessarily believe that government should be restricted to the “Pasteur quadrant.” In the case of fracking, it seems to me that it fell somewhere between the Pasteur and Edison quadrants.

Posted by: Rich at December 5, 2013 9:38 PM
Comment #374778

Rich

I never say we don’t need government. Its role, however, is limited and it takes very wise government officials to let things go as they can. It is difficult for government folks to let things happen because they have political constituencies.

One of the most successful government-private partnerships was USDA. They would help bring innovation to farms. Farmers would try them out. Some would succeed; others would copy.

I guess what I fear in government is two-fold. Government tend toward hubris and the desire to create equality. This has been pronounced during the Obama times. Obama is simply not competent in actually making stuff work. His ideas sound better than they work.

Excuse the partisan attack. It is based on my observation of Obama officials, but let’s get back to the general case.

Government officials have to be willing to play a facilitating role, as you describe above. Many times they like to play a leading role. And, as I said above, I really think we went off the deep end on this equality shit. I am pragmatic. I ask not what you are but what you can do. This is the American tradition that made us great. The Obama folks are more interested in making sure every group is representative of all Americans. Doing this is the sure way to kill innovation.

Fairness is an important government function, but it should not be much mixed with innovation. You must first create wealth before you can redistribute it.

Government used to be better at this. Take my example of the USDA. In recent years, the USDA has neglected some of its core duties of helping farmers and spend a lot of time and money on “social justice.” This is great, but it won’t feed people.

Innovation is never equal. Government, especially Obama, loves equality. Both innovation and equality are good things sometimes, but they rarely work well together. I strongly prefer innovation in most things, while defending equality before the law that limits it purview.


Posted by: CJ at December 6, 2013 4:37 AM
Comment #374779

Perhaps C&J instead of trying to blame the Obama administration for the “doldrums” which is much more partisan and misleading than anything you try to put on the “Obama folks” the focus should be on what we the people are doing today for the people of tomorrow. Just as we the people of the Ford/Carter years did for the people of today. Instead of whining about taxes, Instead of whining about Government.

Posted by: j2t2 at December 6, 2013 9:33 AM
Comment #374780

Good lord, for a person who touts that they have dealt with government for a good part of their adult life you seem to have no clue as to what government really is. I wouldn’t want you anywhere near any governing body, either as a partner or a foe. You have to much angst to be rationale. You should look at Nelson Mandela for someone who understood how innovation and equality can and does work for the common good in conjunction with government. His life was the very statement of that coming to fruition. This “equality shit” of which you speak only serves to point out your absolute stupidity. The conservatives of today would be well advised to take a page from Nelson Mandela’s life and realize that they can overcome their hostility (he had 27 years of that to get over) and work for the better of mankind. If they could just get over themselves and start contributing instead denigrating.

Posted by: Speak4all at December 6, 2013 10:19 AM
Comment #374781

Do you have the numbers to substantiate your claim, or are you just once again trying to obfuscate the fact that the failures you said would occur on Obama’s part have not occurred?

Posted by: Stephen Daugherty at December 6, 2013 10:39 AM
Comment #374798

Stephen

What kind of numbers would you like? Really. The economy is not doing well by historical standards. The numbers prove this. Someone like you wants to explain the numbers by saying that things were worse than the numbers indicated. So what numbers could substantiate it to you? Give me a standard and let’s see how the numbers work.

Speaks4

I actually have very extensive experience in government. I love the Federal government. I know its immense strengths and its dangerous weaknesses.

Re equality – innovation will always create inequality as some people adapt the innovation sooner than others. If you look at the history of anything we have today, it never spread evenly. When I was in college, they wanted to ban calculators, not because of the need to learn math but because “the poor” might not be able to afford them. In computers, they used to talk about the digital divide. Television was first available to the rich and then to people who lived in certain “favored” areas, i.e. big cities.

Government must work on the basis of equality. Good. But there are limits to that.

Posted by: CJ at December 6, 2013 5:50 PM
Comment #375348

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