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December 23, 2014

Fracking Strikes an Unexpected Blow at Iran

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Bret Stephens pens an incisive editorial in the Wall Street Journal discussing the positive effects redounding from fracking technology (hydraulic fracturing of shale). Fracking has been the main driver for sharply reduced oil prices. This has had a salutory effect on the American economy; at the same time, the reduction in oil prices has had a negative impact on Iran and other regimes that heavily rely on oil revenues.

A reduced flow of money means the Iranians will face constraints in their activities underwriting terrorism, fighting proxy wars and building a nuclear weapons arsenal. The relaxation of sanctions and robust oil prices had provided a considerable boost to Iran in recent years. Its economy had turned the corner and was showing signs of improvement and the regime's proxies were on the march in Yemen and elsewhere.

The credit for fracking according to Stephens belongs to that characteristically American figure, the stubbornly individualistic entrepreneur. He writes of fracking,

It didn’t happen because America’s big energy companies are uniquely skilled or smart or deep-pocketed: Take a look at ExxonMobil ’s 2004 Annual Report and you’ll barely find a mention of “fracturing” or “horizontal” drilling.

Nor, finally, did it happen because enlightened mandarins in the federal bureaucracy and national labs were peering around the corners of the future. For the most part, they were obsessing about the possibilities of cellulosic ethanol and other technological nonstarters.

Instead, fracking happened in the U.S. because Americans, almost uniquely in the world, have property rights to the minerals under their yards. And because the federal government wasn’t really paying attention. And because federalism allows states to do their own thing.

Stephens continues, "Fracking has now upended energy markets, pummeled petrodictators, confounded OPEC..."


Posted by SS at December 23, 2014 03:31 PM

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