Fracking Ethics: Environmental Risks and Stakeholder Impacts

Introduction

While "fracking"—the term applied to the practice of hydraulic fracturing of rock to gain access to oil or gas underground—has been hailed as a revolutionary way for the oil industry to draw oil from previously hard-to-reach places, there are a variety of ethical issues surrounding the practice (Evensen & Stedman, 2018). Stakeholders in the issue of fracking go beyond those in the oil and gas industry, however. They include people in communities whose water supplies have been contaminated as a result of fracking. They include people whose lives have been changed by fracking due to the opportunity to invest in companies engaged in this practice. They include the workers and employees who are given jobs because of the new opportunities that fracking provides. Thus, any position for or against fracking will impact all these stakeholders in different ways.

Some believe fracking is the way of the future. Others view it as a threat to the stability of communities and to environmental health. This paper will show why fracking may actually be both of these things—a hopeful path towards future prosperity and a threat to the well-being of the very society it seeks to satisfy. The main issue is that fracking in its current state still poses a number of dangers to various stakeholders and thus can be viewed as ethically irresponsible. If fracking could be perfected and practiced without risk to others—from investors to communities—it could be viewed in a far more favorable light. Until that moment comes, however, fracking must be viewed as a threat. This paper will discuss the history of fracking, where the argument comes from, what the counter-argument is, and why, in the final analysis, the ethics of fracking must be questioned.

The argument surrounding the practice of fracking has developed from a variety of approaches, mainly because there are so many different stakeholders involved. The first approach discussed here is from the economic standpoint; the second is from the environmental standpoint.

History and Background

In the beginning, fracking was seen as a way for oil and gas producers to access previously hard-to-reach reserves using the newly developed method of hydraulic fracturing. The problem the industry had faced regarding this method was that it was very expensive. It was far cheaper to pump oil out of the ground using the traditional oil derrick method. Fracking required a great deal of investment, and companies needed cheap financing or low interest rates in order to secure that investment just to get the process going and to keep it maintained.

That moment came in the wake of the 2008 financial crisis: interest rates were drastically cut by central banks and investors started putting money into the fracking industry, which promised positive returns. So long as rates stayed low, companies could produce oil without being hampered by margin calls. However, were rates to rise, the companies' debts would come due in a significant way and leave them without recourse to further investment to maintain the process. Even if the price of oil were to rise, the fracking industry would not necessarily benefit because other costs would rise as well (Sovacool, 2014; Strauss, 2019).

The other major issue with fracking is that it can cause damage to the environment and harm communities that depend on fresh water supplies, which have become contaminated in the past because of fracking (McDermott-Levy, Kaktins & Sattler, 2013; Mooney, 2011). Indeed, Busby and Mangano (2017) showed that infant mortality rates significantly increased in regions where fracking took place, while in the rest of the nation infant mortality rates declined. The authors concluded that "fracking appears to be associated with early infant mortality in populations living in counties where the process is carried out. There is some evidence that the effect is associated with private water well density and/or environmental law violations" (Busby & Mangano, 2017, p. 381). In short, fracking has been found to be harmful to the environment—and to human beings who rely on that environment to support their way of life.

From these two approaches—the economic side and the environmental side—the arguments against fracking have emerged. The ethical issues are essentially these: (1) fracking as an industry is unsustainable because it is too costly and is only currently booming because of low interest rates and investors' need for the high-yield returns promised by the industry (Heinberg, 2013); and (2) fracking pollutes the earth and can lead to the deaths of human beings (Bateman, 2010).

Current State of Fracking

Fracking actually began in the 1950s, but in recent years it has become more commercially viable, with a million jobs being created in the fracking industry in the U.S. alone (King, 2012). However, because of the risks associated with fracking, legal codes and cases vary from state to state (Cheren, 2013; Minor, 2013). The Environmental Protection Agency (EPA) has played an ambivalent role in the development of the arguments for and against fracking. As Taylor (2012) shows, there are ways for fracking companies to implement the practice more safely, but doing so is costly, and companies already operating with very thin margins are reluctant to implement these measures.

Those who argue against fracking and want to take legal action also face high costs. The cost of pursuing litigation against energy companies is substantial—which is one reason the EPA has only partially followed up on "explosion risk" level findings of methane in well water in Texas, as Banerjee (2014) has shown. These levels, the EPA contends, are directly related to fracking companies operating nearby. However, as energy companies have powerful interest groups in Washington that interact with legislators and members of the judicial and executive branches, the EPA has shown a reluctance to pursue legal recourse for fear of reprisal (Banerjee, 2014). Thus, there is reluctance on both sides of this issue: reluctance on the part of energy companies to implement costly but potentially effective methane controls, and reluctance on the part of the EPA to maintain costly and potentially politically dangerous suits against the energy industry. The result is that the public and the environment are left to suffer the consequences.

Conclusion

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