In his New York Times Magazine column this week, Adam Davidson writes about fracking, the new technique for extracting natural gas that has suddenly become a huge — and controversial — deal in this country.
If there is an uneasy equilibrium, right now, between environmentally concerned citizens and pro-fracking industrial groups, what will the political balance be like in a decade? What pressures will be on state legislatures and regulators if the projections are true and millions of workers in Pennsylvania, Ohio, West Virginia and maybe New York will owe their jobs to fracking. There will be trillions of dollars of new wealth. Will environmental and health concerns have any chance against that juggernaut?
It doesn't necessarily have to end badly. In the late 1960s, Norway's economy was immediately transformed when it discovered massive crude deposits off its North Sea shores. Back then, Farouk al-Kasim, an Iraqi-born Norwegian petroleum engineer, warned that all that sudden easy money could create "so much pressure that it will completely overwhelm environmental concerns; the force can undermine moral, ethical barriers." The money available to the industry and government was so ample, he told me recently, that people soon began to say, "I don't care, I'm getting rich, to hell with everybody else."
Norway avoided the curse, and America will, too, Kasim said, because it has a huge, diverse economy. Still, as oil-rich states have shown, it's possible for even a relatively small extractive industry to cause severe damage. In fact, the best thing that any U.S. environmentalist can do is to start thinking like an economist — particularly a Norwegian one. In 1990, Norway began channeling money from oil and gas into a pension fund designed to keep the country stable when the crude ran out. It's now the largest sovereign wealth fund in the world, as Norway showed that the best defense against an extraction industry was diverse economic growth. For environmentalists, and even steel behemoths, it's a point worth remembering.