Saturday, September 07, 2013

Frack the Poor

Environmentalists who want to us to reduce or even eliminate the use of carbon based fuels in order to prevent the coming catastrophe of global warming seem to pay little heed to the impact that such policies will have on the millions of poor people around the world whose quality of life would be dramatically improved by the jobs, electricity, heat, and transportation that such fuels help provide. They’ve got their air conditioned homes, but the poor in China and India are going to make do without in the interests of saving the planet.

One of the causes that environmentalists and socially conscious Hollywood stars have embraced of late is to ban fracking in the United States. Fracking of course has revolutionized the America’s energy environment. It’s directly and indirectly created thousands of jobs, lowered energy costs, and may even lead to a situation where the US is actually exporting oil and gas. It’s one of the few economic bright spots in recent years and should be celebrated for its positive impacts for all Americans.

Especially the poor. Fracking and the Poor:

Mercator's most notable finding is that the income group helped the most by this bonanza is the poor because energy is a big component of their family budgets. Data from the annual report of the federal Low Income Home Energy Assistance Program (Liheap) show that poor households spend four times more of their income on home energy (10.4%) than do non-poor households (2.6%). That same report says that roughly 40 million households, or 36% of U.S. households, are eligible for Liheap. Though the poor on average spend less overall on heating and electricity, lower natural gas prices have still shaved about $10 billion a year from the utility bills of poor families.

To put it another way, fracking is a much more effective antipoverty program than is Liheap. In 2012, Liheap provided roughly $3.5 billion to about nine million low-income households to subsidize their home-heating costs. New drilling technologies saved poor households almost three times more. Low gas prices benefit nearly all poor households, while Liheap helps fewer than one in four.

These energy savings are especially impressive compared to what residents of other industrialized nations are paying. The natural gas price this summer increased to about $3.70 per million BTUs, but that compares to the roughly $10 that consumers pay in Spain or $13 in China. According to the Mercator analysis, if natural gas prices were that high in the U.S., average home heating bills for millions of Americans would be almost 75% higher.

You can’t deny the passion and commitment that environmentalists have for helping the planet. It’s too bad they don’t feel the same way about the people.