Development of Fracking Helped by Government Funding and Tax Breaks

Wednesday, September 26, 2012
(graphic: Living Green Magazine)

Hydraulic fracturing became the successful, and controversial, way to extract natural gas from shale deposits only after decades of financial help from Washington, despite what some advocates say.

 

Industry groups and free-marketers have claimed recently that hydraulic fracturing, or fracking, developed into a money-making opportunity without government interference.

 

But some who pioneered the drilling technique fully admit that if it weren’t for Congress and the Department of Energy, the business wouldn’t be where it is today.

 

“I’m conservative as hell,” Dan Steward, the former Mitchell Energy geologist whose company pioneered shale gas in Texas, told The Breakthrough Institute. “They [the government] did a hell of a lot of work, and I can’t give them enough credit for that. [The Department of Energy] started it, and other people took the ball and ran with it. You cannot diminish DOE’s involvement.”

 

According to the Associated Press, Washington contributed more than $100 million in research to develop fracking, as well as billions of dollars more in tax breaks.

 

The DOE began funding research into fracking and horizontal drilling in 1975, and five years later, lawmakers approved an important tax break to encourage “unconventional” natural gas drilling. Among the most important government contributions was the development by government scientists of micro-seismic (3D) mapping, which is known in the industry as “frack mapping.”

 

Federal subsidies for the oil and natural gas industry began in 1916.

-Noel Brinkerhoff

 

To Learn More:

New Investigation Finds Decades of Government Funding Behind Shale Revolution (by Ted Nordhaus, Michael Shellenberger, Alex Trembath and Jesse Jenkins, The Breakthrough)

Decades of Federal Dollars Helped Fuel Gas Boom (by Kevin Begos, Associated Press)

Positive University Study on Fracking Was Led by a Gas Company Insider (by Noel Brinkerhoff, AllGov)

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