When people look at “fracking”—the production of natural gas through hydraulic fracturing techniques--they see different things. Critics see polluted wells, exploding houses, and earthquakes—an environmental disaster in the making. These anti-frackers have a simple solution: ban it. In contrast, industry supporters see hydraulic fracturing as a safe technology that drillers have been using for decades without controversy and that now promises a new era of energy abundance. The pro-frackers, too, have a simple solution: get the government out of the way and drill baby, drill.
As an economist, I see something still different: a
familiar pattern of negative externalities and missing market signals,
to which the appropriate response is unlikely to be either prohibition
or laissez-faire. >>>Read more