A fascinating article in the New York Times published on Dec. 11 described what could happened to America, and more specifically the steel industry, if hydraulic fracturing, or hydrofracking industry, booms like it very well may.
Steel companies like U.S. Steel, which stock price has fallen 90 percent since the housing bubble burst, could see a nice shot in the arm if fracking became a big deal like economist think it could. U.S. Steel, based out of Pittsburgh, is essentially sitting on top of the Marcellus Shale, an “oil rich formation that stretches from New York to Ohio,” as said in the NYT.
What does hydrofracking need for it to extract the huge amounts of natural gas embedded in the shale rock underneath the earth? Huge tubular steel piping stuck thousands of feet underground to search for the hydrocarbons.
The NYT article suggested “at least 100 trillion cubic feet” of gas is down there, which is why U.S. Steel spent $100 million on a “facility whose entire purpose” is to manufacture steel tubes for gas companies.
This could be the leading edge of new energy and new technology that the United States has bountiful amounts of.
There is a catch though.
The problem isn’t the suggested three million jobs it could bring to the US economy by the end of this decade, as Citigroup analyst Ed Morse thinks, but chemicals injected into the ground needed to extract the gas — some of which can and have been proven to cause cancer.
Although Ohio, West Virginia and Pennsylvania are allowing fracking, it comes with extremely strict regulations. New York has yet to allow fracking and has a commission panel of experts reviewing whether fracking can “operate without hurting citizens,” as the NYT put it.
This is certainly something to keep an eye on over the next few years. It will come down to politics, the economy vs. health.