The economics of oil or natural gas hydrofracking are seldom analyzed
from the perspective of the American consumer. Most discussions focus
upon the investment opportunities of specific companies, royalties to
leaseholders, windfall tax revenues that state governments will benefit
from and the bonanza that local communities will enjoy from the added
business activity. Missing is a clear understanding of the pricing
points and factors that will determine the actual selling charge and
total all inclusive retrieval costs in the domestic market. Will the
price of energy drop precipitously, or will the net effect be that the
native end user sees no direct benefit from the rush to drill?
The environmental risks of the fracking process are real.