Nevada is poised to join the country’s energy revolution. The one that has nothing to do with solar panels and wind turbines. The one that actually makes money and creates high-paying jobs.
Areas across the United States are enjoying an economic boom thanks to hydraulic fracturing, better known as fracking. The process taps vast deposits of natural gas and oil once believed to be inaccessible, using high-pressure injections of water, sand and chemicals into deep rock. As reported by the Review-Journal’s James DeHaven, state officials are fine-tuning Nevada’s rarely utilized oil and gas regulations so drilling companies can get to work here.
Houston-based Noble Energy hopes to begin drawing oil out of two new Elko County wells as soon as next month. The company plans to invest around $130 million in the coming years to develop seven other permitted wells in northeastern Nevada. Noble Energy believes those wells ultimately will produce up to 50,000 barrels per day. That’s more than 18 million barrels per year, or about nine times as much oil as Nevada has produced in the past six years, according to the U.S. Energy Information Administration. That’s a lot of jobs and a lot of tax revenue.
Remember all that alarmist talk about “peak oil”? Fracking advances have turned the theory upside down. As oil production has increased, so have recoverable reserves. Suddenly, the United States has the resources to become one of the world’s leading energy exporters — for generations.
The energy sector wasn’t supposed to evolve this way. Recall that a major plank of Barack Obama’s 2008 presidential campaign was creating 5 million “green” jobs over 10 years. It’s been a complete bust. Although green energy is making advancements in efficiency, renewable projects aren’t viable without huge federal subsidies and government mandates to use their overpriced power. The green jobs revolution has been a huge wealth consumer, not a wealth generator.
But the natural gas and oil shale revolution — despite obstacles to drilling offshore and on federal land — has almost single-handedly driven the economic recovery the president is taking credit for.
Exhibit A, as reported by The Washington Beacon’s Lachlan Markay: Midland, Texas, has the lowest unemployment rate of any metro area in the United States, at 2.9 percent, and is one of the fastest-growing cities in the country, thanks to the oil shale boom in West Texas. Conversely, Yuma, Ariz., has the highest unemployment rate of any U.S. metro area, at a whopping 26.1 percent. Yuma is home to the Agua Caliente solar plant, the largest photovoltaic solar generation facility in the world, thanks largely to a $967 million loan guarantee from the Department of Energy.
William Yeatman, an energy policy expert with the Competitive Enterprise Institute, told Mr. Markay: “It represents the difference between an industry which exists of its own accord, providing goods and services that people actually want to buy, and an industry that exists only by the grace of government, which acts to mandate demand and subsidize supply.”
That same federal government also controls land supply. Nevada would already be part of the fracking revolution if not for the fact that Washington owns more than 80 percent of the entire state.
The state has a legitimate interest in regulating fracking, and environmental concerns must be addressed. Noble Energy executive Kevin Vorhaben counts fracking rules devised by Nevada Minerals Division Administrator Richard Perry and state legislators among the most stringent in the United States. That’s fine, as long as Nevada doesn’t make it impossible for companies to obtain permits in a reasonable amount of time.
Nevada needs more good-paying jobs and more industry to diversify and grow its economy. Fracking fits the bill.