This is mostly driven by fracking and the growing global demand for energy keeping fracking economical. I am not insinuating causation here, but it's probably not coincidence that the top energy producing nations are all corrupt, repressive, wealth imbalanced, polluted, and economically dysfunctional outside of the energy sector. Therefore, I am not sure we should want the US to go down the same path. The notable exceptions are Canada and Norway, but they benefit from strong public institutions and more balanced economies. In our post-Citizens United, underfunded-EPA, too-big-to-fail corporate reality, I just hope we don't resemble Nigeria or Russia too much.
We've already discussed all the potential reasons that fracking is an environmental risk, but what about the economic upside? Some in the industry would claim that the fracking boom vaulted the US out of recession. It's undeniable that more jobs, corporate profits, and taxes were generated, but enough to have a material overall GDP impact? Business Insider and W Post are not sure (see below). The boom has triggered the market price of gas and electricity to go down a lot, but energy is a small fraction of modern industrial costs (compared to labor and raw materials), so it's not like the lower prices led to much higher profits or cheaper products for consumers. Also, the oil & gas industry is fairly automated with low labor participation relative to capital investment. So there weren't that many new jobs created, and even in drill-baby-drill Texas, only 6.5% of jobs are in energy (and 1% nationally). So even if the industry doubles in size (and you believe the API's claim that for every 1 new petro-job created, 2.7 other indirect jobs are too), it's not enough to make up for the 7M-plus jobs lost during the Great R. But what about GDP growth? Well, oil & gas is only 2.5% of our economy (it's a commodity after all), and of the 7.6% GDP growth the US experienced since 2009, only 0.6% can be attributed to the "energy boom" according to Capital Economics.
Therefore, is all the environmental risk worth these meager benefits? As we've discussed before, just because it is economically justified at present to do something doesn't mean it's the best available course of action long-term. And in many cases, once we commit down a path, we can't undo it later. We can always drill in the future after more testing is done and if national needs dictate. But if we drill now (chasing short-term bucks and jobs, however small), we can never revert to "the way it used to be" if we discover that we made a mistake.
