What is the fracking? This is a technique that instead of drilling for oil and extracting it as if you are drinking a soda from a bottle with a straw, you blast your way into a deposit of a mixture of oil and gas, pump in water and you extract the remaining stuff. Fracking is much more like shaking a bottle of champagne so you get a nice celebratory pop!
And this pop is making the US economy again independent of foreign oil!
What is interesting to note from a management point of view is how the US and Europe are dealing with hydraulic fracturing.
In the US some states made fracturing legal within a very tight environmental regime. In other states, where NIMBYism is very strong and influential fracking is still off the cards.
In Europe fracturing is a more sentimental in nature. France and Bulgaria have banned it along with several other countries. Fear of earthquakes and groundwater contamination is rife. In these two countries most of the electricity is nuclear driven and the nuclear lobby is well known to have seen fracking as the devil in disguise.
Why ban fracking now?
Oil extraction techniques has been using hydraulic fracturing for a number of years. It was started some fifty years ago - for example in Canada and Germany. The hullabaloo of fracking is mainly green-driven and NIMBYism.
As we run out of dinosaur-era hydrocarbons marginal extraction techniques will continue to play an essential part in the production of oil and gas. Global prices of hydrocarbons will stabilize with these technique especially when one considers that the deposits in China can make China the 2nd largest gas producer after the US if it exploits its shale gas reserves.
Street protests in Saudi Arabia might warm our hearts, but they could easily lead to $250 a barrel oil and a global recession.
- Fareed Zacharia
Managing Director and Chief Programmes Officer based in Malta and an avid entrepreneur who likes sharing his expertise in various fields with people from all walks of life.
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