There’s no doubt that the recent shale energy boom is a game changer for America. Gas extraction from shale through a combination of horizontal drilling techniques and hydraulic fracturing (also known as “fracking”) will have a huge effect on matters large and small – from generating wealth for small landowners to changing international politics. On some level it has already affected us all: cheaper natural gas is a godsend for households and small businesses whose budgets have been strained by the fluctuating price of gasoline.
But you won’t have to live or work in any of the gas boom towns that are springing up around the country to see the signs of economic revitalization. How that revitalization will play out, however, remains to be determined. Last month Dow Chemical’s vice president, Jim Fitterling, discussed this at IHS Inc.’s World Petrochemical Conference in Houston highlighting the four potential waves of economic potential that will result.
The first wave affects landowners and energy companies and is the literal BOOM! of the boom. It involves land purchases and leases, drilling and fracking, and the selling of the recovered natural gas. Chemical and steel companies take advantage of lowered gas prices to power or supply their plants during the second wave. The investment in these industries is also happening right now, most of it in the Gulf Coast region. We may see trickle-down effects in the Michigan, but this doesn’t directly affect our industry or manufacturing for the immediate future.
The third wave, Fitterling explained, involves companies investing in new power plants and U.S. manufacturing. The fourth wave, and perhaps the most important long term, is the investment in research and development knowledge. This last one could have serious impact in generating better paid American jobs which are less vulnerable to offshoring. It is, of course, in Dow Chemical’s best interest that U.S. policy be made limiting the export of natural gas and therefore keeping it available domestically and at a lowered rate to Dow Chemical.
For Michigan workers, the most promising employment options will be in engineering and research and development. A STEM education has never a bad idea, but it’s a great idea now. It’s unlikely that we will see fracking boom towns in Michigan for a number of reasons, so the quick and dirty jobs aren’t on the immediate horizon, but waves two, three, and four will have impact, and we all know Michigan could use a manufacturing jolt. We have the workers, just not the work.
Of course, extracting gas from shale through fracking is not uncontroversial. The process itself takes a tremendous amount of water and chemicals to accomplish. Most of the toxic chemicals used are not recoverable but are left in the fractured shale rock where they can eventually evaporate into the air or leach into the groundwater. The EPA has expressed concern about the potential for contamination of our drinking water. Also, of late there have been a number of oil spills and gas explosions that have exposed the poor condition of much of our country’s pipeline infrastructure.
No matter the dangers of fracking, its benefits to people with and without money, will sway policy and investment. This has always been the case historically with energy, so it’s wise to understand it and what it means for our future as a country and as individuals – good and bad.