Disruptive technology that comes at a price

Disruptive technology that comes at a price

Disruptive technology that comes at a price

New disruptive breakthroughs in technology can come in many packages — new devices, new software, new medicine. Some show up and force change overnight, and others percolate for years. Some grab headlines but do not change things much, others fundamentally change the world and we hardly notice. One of the most overlooked technologies that upended billion-dollar industries was the introduction of fracking for oil and gas extraction. It reduced the U.S. trade deficit, the global power of other countries, and carbon emissions. And yet, we usually only talk about its adverse side effects, of which there are many.

What is fracking?

Fracking is a nickname for hydraulic fracturing. Most oil and natural gas is extracted from large reservoirs in the ground. To get at it, you drill a hole down to the underground pool and pump it up. But a vast amount of fossil fuel is trapped in what is essentially compressed sand or coal. If you injected water at very high pressure into that sand, it breaks it up to create cracks. They put small particles into the water to hold open the cracks when the pressure is removed. Once enough cracks are made, the oil or gas is free to flow into the well hole, and up to the surface. Other chemicals are added to the mix to increase the efficiency of the process.

Why do people dislike fracking so much?

This article is about the disruption caused by fracking, but I should add a word about the downsides. And they are significant. In short, the process consists of taking a lot of nasty chemicals, a massive amount of water, and injecting it into the ground to break up rocks. You end up with those nasty chemicals in the water table, natural gas leaking into the water table, and it changes the geological structure of the ground. The visible effects of this are water faucets that can catch on fire, pollutants in the drinking water, and earthquakes in places that usually don’t have earthquakes. On top of that, the cheap fuel fracking delivers reduces the economic viability of non-carbon based energy.

What did it change?

In short, fracking freed up a lot of oil and gas in the U.S. Areas that had been pumped dry or that had never been explored could now be tapped. And a larger portion of the hydrocarbons being pulled out is in the form of natural gas. This cheap and abundant resource of fuel here in the U.S. resulted in two disruptive changes — we import less fuel and we burn more natural gas.

The U.S. produced 50% more crude oil in the last decade domestically, and imports dropped from 60% of consumption to 45%. The U.S. is now tied with countries like Saudia Arabia and Russia as leaders in crude oil production. All of that money that was leaving the U.S. to pay for jobs and equipment in other nations is staying here.

Burning natural gas has a disruptive impact because it’s cleaner than coal and produces fewer carbon emissions than other carbon-based ways of generating electricity. So, all around the country utilities are converting coal and oil power plants to natural gas. U.S. carbon emissions have actually gone down, not because of any policy changes or drop in energy usage.

Why did it force such a huge change?

It’s all about economics. Market forces are far stronger than regulation or policy. Natural gas is now cheaper than coal to get out of the ground and transport. When we can produce our own oil and gas, we import less, and the economic and political power of countries we buy from is lessened.

And all of this change happened in spite of the significant negative impacts of fracking. Why? Because it’s a lot of money. Billions of dollars pulled from the ground. And billions for those that make the equipment that does the fracking, pumping, transportation and refining. It’s hard to say no to all that revenue, even if you are looking at flames shooting from a faucet in your back yard.

When we think about innovation, we usually focus on computers, medicine and communication. But innovation can be about low-tech applications like how to get more hydrocarbons out of the ground. And the impact can be just as, or even more, significant in both in a positive and a negative way.

Read more: https://www.bizjournals.com/phoenix/news/2019/07/15/fracking-a-disruptive-technology-that-comes-at-a.html