From the September-October 2020 issue of News & Letters
The unmitigated disaster of fracking (hydraulic fracturing of rock to extract oil and/or natural gas) reflects the current condition of capitalism. The Barack Obama administration presided over a boom in fracking that turned the U.S. into the world’s biggest producer of both oil and natural gas—such a great achievement that Obama and Donald Trump both want to take credit for it. But it came at great human and environmental cost, including doubling down on fossil fuel production when it needed to be winding down to prevent climate catastrophe. And the lush profits turned out to be a mirage—stolen from the future economically as well as ecologically.
PEOPLE OF COLOR MOST AFFECTED
As with all pollution, the toxic effects of fracking hurt Black, Latinx, Native American and poor communities the most, and generated resistance in place after place. In Pennsylvania, fracking wells are disproportionately sited in poor rural communities. Those wells pollute the air and water, making people sick and likely more vulnerable to COVID-19.
Where the polluted wastewater is disposed of is also skewed. In South Texas, these wastewater sites tend to be placed near minority communities. Downstream industries processing the fracked gas and oil—refineries, plastics, petrochemicals and power plants—also disproportionately poison Black, Indigenous and People of Color communities. Those are where some of the most ferocious environmental justice battles are being fought. Facing a glut of natural gas, companies are ramping up plastic production, knowing that they are increasing that poisoning and worsening the climate and pollution crisis.
As with all fossil fuel extraction projects, the wells sooner or later run out of materials that can be extracted economically, leaving abandoned toxic waste sites, which often spew methane into the air, adding to the climate crisis. As bankruptcies decimate fracking companies, those toxic sites will mushroom.
By law, companies have to post bonds for cleanup, but the amounts are only a fraction of what is needed, and even that often disappears, particularly when companies declare bankruptcy. Take Spyglass Cedar Creek, which abandoned 40 wells in South Dakota, with an estimated cleanup cost of $1.2 million. The company spent their $30,000 bond five years ago, leaving the state to pay the rest.
Coal companies operate in the same way. Companies that have recently declared bankruptcy are producing half of U.S. coal. Coal executives use bankruptcy to escape pension and environmental responsibilities, while awarding themselves huge bonuses and shafting workers.
Just as importantly, the intended products of fracking, oil and natural gas, are climate-busters. Recent studies have shown that both companies and regulators have underestimated, probably vastly, the amount of methane leaked into the atmosphere during normal fracking operations. Since Trump administration standard operating procedure is to hide information and spew lies instead, they have tried to prevent production or dissemination of data about the leaks.
STATE-CAPITALISM PROPS UP BIG OIL
With all these terrible consequences, why was fracking allowed to boom? Was it favored over renewable energy because its profits were recognized by the “free market”? No! The fracked oil industry has been a financial failure for more than the past decade. For five years, the industry has been losing money, even before the COVID-19 crash in demand that caused the brief spectacle of a negative oil price. But the pandemic gave them an excuse to demand bailouts, when all countries should be winding down fossil fuel production and use.
For instance, fracking powerhouse Chesapeake Energy filed for bankruptcy on June 28—joining 227 North American oil and gas producers that declared bankruptcy in the five years that ended May 31, involving more than $134 billion in aggregate debt. And in 2020-21, almost 250 oil and gas companies could file for bankruptcy.
Shale fracking was never profitable, but it kept going by the power of state-capitalism—subsidizing fossil industries and keeping interest rates low to prop up the failing post-2008-crash economy—combined with a con game, in keeping with the times. Company executives and private equity firms siphoned off revenue for themselves, leaving investors in the lurch, and propping up operations by piling up cheap debt. Usually the bosses give themselves a big bonus right before they go bankrupt and kick their employees to the curb.
This is the current operation of decaying capitalism in miniature: cannibalizing the economy, people and the planet, destroying our future, in order to funnel wealth to the favored few.