Archive Page 2

10
Feb
12

Opinion: Nostalgia for factory jobs that won’t come back

updated 8:46 AM EST, Fri February 17, 2012
President Obama visits a Master Lock factory. Jeffrey Bergstand says manufacturing's heyday is over in the United States.
President Obama visits a Master Lock factory. Jeffrey Bergstand says manufacturing’s heyday is over in the United States.

STORY HIGHLIGHTS
  • Jeffrey Bergstrand: Theme of economic talk is desire to return to our factory roots
  • President Obama is stressing revival of manufacturing as a route to greater prosperity
  • Bergstrand says the nostalgia is understandable but naive
  • He says the golden days of U.S. manufacturing in the 1950-1970 era are gone

Editor’s note: Jeffrey Bergstrand, professor of finance at the University of Notre Dame, is an expert on international trade.

(CNN) — If there is a central public sentiment about economics prevailing in America right now, it seems to be this: We want to go back to our manufacturing roots.

The heyday of manufacturing, the block-long plants that produce not just tangible goods, but big, heavy ones like cars, gave us economic stability once; it can do it again.

On Wednesday, President Obama spoke at the Master Lock factory in Milwaukee and said, “What’s happening in Detroit can happen in other industries. What happens in Cleveland and Pittsburgh and Raleigh and Milwaukee, that’s what we’ve got to be shooting for, is to create opportunities for hardworking Americans to get in there and start making stuff again and sending it all over the world — products stamped with three proud words: Made in America.”

But as with most nostalgic visions, this one doesn’t reflect economic realities.

Jeffrey Bergstrand

Jeffrey Bergstrand

First, it’s understandable why we have a romantic association with manufacturing. “Factory nostalgia” is economically legitimate, because it harkens back to the period of the greatest growth in the U.S. economy in history, basically 1950 to 1973.

During that period, there was growth not just in production, but in real household incomes, which is something we have seen little of for the last 40 years. This gave rise to a burgeoning, powerful middle class, and more than that, a sense that all of America shared in the economic boom, with the assembly line tethering us like an anchor to shared prosperity.

Compare this image to the more recent service-based economy. The source of the common bond — the assembly line — is gone. Instead, people are tied to their own education, their own human capital. Because of that, they’re more stand-alone. And so since 1973, we face this widening inequality, partly because our incomes are more tied to individuals, and individuals are different. There’s a huge variance across their abilities and educations, and incomes are tied directly to those things. And this situation creates the political tension we face in America; consequently, we long for manufacturing because we associate that with the strength of the middle class.

But can we go back to the assembly line? To answer that, there is another important factor to keep in mind. The enormous growth from 1950-73 wasn’t entirely of our own making. It was partly due to our own initiative and education, but we also must remember that in 1950, Japan, Germany, Britain and France were all leveled because of World War II. We had no competition.

Today, not only are all those countries competing against us, but so are China, India and other countries in South America and Africa — countries with very large and growing populations. It’s not the same game, and in that sense, we’re naïve to think we can repeat the ’50s and ’60s if we just pull our bootstraps up. The world was much different then.

Further, there’s a very important caveat to people who respond that we should just close our borders and make everything here. As an economic policy, that belief will only serve to hurt standards of living here and globally. There is a large body of evidence that shows that economic growth comes from three things: good geography, sound institutions and strong trade partnerships with the rest of the world. So, going back to closing the borders will only hurt us in the long run.

Despite the recent, well-publicized successes in U.S. auto manufacturing, what is happening in the American economy is not the reversal of a trend toward declining manufacturing. Rather, it’s a slowing down of the rate of loss of manufacturing, or almost a stabilization of the decline of manufacturing in this country.

For the last 25 – 30 years, companies moved manufacturing to China where labor costs were considerably less and there existed an enormous consumer market. But the subsequent rapid per capita income growth in China has meant a rise in the relative price of their labor, so the cost differential is being alleviated. This cost differential is being further narrowed by China once again allowing its currency to gain in value compared to the U.S. dollar.

Once that differential diminishes, the rate of manufacturing decline has to slow.

However, this does not signal that “in-sourcing” or “re-shoring” is on the rise in America. Low-technology manufacturing is not anything we will ever get back to permanently. It’s just too costly to produce here, and even if China becomes less attractive, there’s still Latin America, and much of Asia and Africa. Going forward for decades, we simply don’t have a comparative advantage in producing low-technology manufactured goods.

But we can retain manufacturing strength in the high-technology goods, as long as we commit to providing the level of education that employees will need to meet the labor demand.

There are those high-tech jobs such as the assembly of iPhones and iPads that require proximity to component suppliers — the chipmakers, the semiconductors, the circuitry — which can and probably will continue to be performed in countries with less-skilled workforces. However, there are many tasks associated with such complex products — research and development, for example — that don’t require proximity to these suppliers and those provide jobs that America can gain. If manufacturing is to have a reinvigorated future in America, this is where the growth will be seen.

But education is the key to the U.S. being able to take advantage of this opportunity One of the biggest issues that I hear from managers and executives is that they need to hire workers, but can’t find those who have the educational skills to be productive. This condition alone will lead to a permanently higher unemployment rate.

We may not, in the foreseeable future, get down to 5% unemployment because of the significant number of people who lack the skills for high-tech manufacturing jobs and the current underemployment and long duration of unemployment that is depreciating our workers’ skills. As a country, we face the risk that we will lose out in our ability to compete in manufacturing to Europe, Japan and others.

So the nostalgia for our industrial past should be turned into a vision for a better way to educate our children. On a number of indices, we are in the bottom half of the richest 30 countries in terms of primary and secondary education performance for skills in math and reading comprehension. Forty years ago, we were right near the top.

Some people are losing out on their opportunities for a better economic future even by age 4. We simply must return to our commitment to invest in human capital.

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03
Feb
12

Trouble found in air marshal report

A long-awaited report on alleged misconduct within the Federal Air Marshal Service concludes that while supervisors do not engage in “widespread” discrimination and retaliation against rank-and-file air marshals, the agency is far from trouble-free.

The report, from Department of Homeland Security’s Office of the Inspector General and obtained by CNN, paints an unflattering picture of the agency, saying air marshals share the widespread “perception” that they are being mistreated, and adding that investigators “heard too many negative and conflicting accounts” of misconduct to dismiss them.

“Federal air marshals repeatedly portrayed their supervisors as vindictive, aggressive, and guilty of favoritism,” the report says.

A “substantial percentage” of air marshals surveyed believe they are victims of discrimination or unfavorable treatment. And many fear retaliation if they report violations of laws or regulations, the report says. “There is a great deal of tension, mistrust and dislike.”

At the same time, the report says, rank-and-file air marshals share in the blame. Air marshals with grievances sometimes take their bosses’ actions out of context, fail to disclose the whole story, and misinterpret management decisions as harassment, the report says.

Importantly, the report says, the divisiveness and tension on the ground “do not appear to have compromised” the agency’s mission” in the sky.

The 21-month investigation was triggered by a January 2010 CNN report about air marshals based at the Orlando, Florida, field office.

An air marshal there alleged that supervisors created a “Jeopardy”-style game board and labeled it with terms such as “pickle smokers,” “our gang” and “creatures,” which, he said, alluded to gay men, African-Americans and lesbians. The names ridiculed air marshals who had fallen out of favor, and targeted them for retaliation, he said.

But the Office of the Inspector General says it “found no evidence” that the board resulted in unfair treatment of air marshals.

The report says the game board was created by three people — a supervisor, an air marshal and a civilian training officer. The air marshal said the “Jeopardy” board was used to make fun of the training staff, not others. And he provided “relatively innocuous explanations” for the terms used on the boards, the Office of the Inspector General said.

But a training staff member, who was not involved in the board’s creation, gave a different explanation. He said the training staff “used the game board to make fun of federal air marshals they disliked, including African-Americans, gays and lesbians, and others who had filed complaints against the office,” the report says.

All three people responsible for creating the board have left the agency, it says.

Though the game-board disclosure triggered the inspector general’s investigation, the scope of the investigation expanded as air marshals stepped forward with other allegations about their bosses. More than 300 people were interviewed, and investigators visited Air Marshal Service offices in Orlando and Tampa in Florida; Charlotte, North Carolina; Cincinnati; Minneapolis; and Dallas.

The degree of animosity varied at different field offices, according to the report, which called the animosity at Orlando “unsettling.”

“We conducted numerous interviews at offsite locations because interviewees did not want to be seen talking to us,” the report says.

It says the inspector general’s office received numerous individual allegations of misconduct, but did not investigate them, leaving open the true extent of the mismanagement.

“Determining whether one employee retaliated or discriminated against another is a complex matter” that would require a court to determine, the report says.

A Federal Air Marshal Service spokeswoman contacted by CNN late Thursday reiterated that the report found no evidence of widespread discrimination or retaliation. Employees’ perceptions of discrimination stem from poor communication with the work force, she said.

“While the (agency) faces organizational challenges, the (inspector general’s office) notes that these challenges do not interfere with the mission of the agency,” Kimberley Thompson wrote in an e-mail statement. “Through working groups, listening sessions, and advisory councils, (Federal Air Marshal Service) leadership has demonstrated its commitment to improving communications within the workforce.”

She added the Transportation Security Administration “took a proactive approach to the issues raised and has developed and implemented solutions ahead of the conclusion of the investigation.”

But Tom Devine of the Government Accountability Project, a nonprofit whistle-blower organization, called the report “a significant vindication for air marshal whistle-blowers.”

“It confirms a perceived pattern of retaliation against air marshals who challenged security breaches by Federal Air Marshal Service management,” he said.

The inspector general’s report puts a spotlight on common complaints that many air marshals have against their supervisors, and vice versa. Many air marshals “harbor strong feelings” that former U.S. Secret Service employees, who flooded the top ranks of the agency following the September 11th terrorist attacks, created their own “elite culture” within the agency that was not held accountable. Conversely, supervisors “did not hide their view” that the government, in its haste to create the agency, hired unqualified people, the report says.

The government investigators said they identified factors that contributed to the allegations of a hostile work environment. There was limited transparency to management decisions, it said, and there is limited interaction between managers on the ground and the officers, whose job requires extensive travel.

The report said the TSA and the Federal Air Marshal Service are committed to addressing the factors that led to the investigation and the problems that air marshals say still exist.

The inspector general recommended the TSA “create and implement an action plan” to address workplace issues. “The plan should include training for supervisors on communication and conflict management that is tailored to the unique Federal Air Marshal Service mission,” the report stated.

03
Feb
12

Optimism over jobs outlook

Companies are saying the job market is getting better. Workers are saying it’s already kicked into high gear.

Friday’s jobs report showed a gain of 243,000 jobs. But a separate survey of households used to determine the unemployment rate shows much, much stronger job gains.

The number of people saying they were employed increased by 631,000 in January alone. That’s the biggest one-month gain since just before the Great Recession started in late 2007.

And the three-month and six-month increases are similarly impressive — 1.1 million more say they have jobs compared to October, and nearly 2 million more people say they’re working since July’s reading.

That is the best six-month job gain since August 2005, when the unemployment rate was a healthy 4.9%. January’s unemployment rate is still a painfully high 8.3%. But the unemployment rate has fallen from 9.1% in the last six months on the strength of the increasing number of those saying they have found work.

Finding a job in 2012

So the spike in Americans saying they’re working could be an early sign of much stronger-than-expected economic growth ahead.

Typically economists pay more attention to the jobs number produced by the survey of employers than to the households survey. But the employer survey can miss hiring by very small businesses, start-ups and self-employed workers.

Mark Zandi, chief economist at Moody’s Analytics, says the household survey serves as a better sign of where the economy is heading at turning points like when it’s going into recession and when it’s ready to take off.

He said one reason job growth has been so disappointing since the official end of the recession in June 2009 is that there has been weaker than expected new business start-ups during that period.

He and other economists said this employment reading, and other data showing a pick-up in demand for credit by small businesses, makes them hopeful we’re finally getting that long-overdue business creation.

The jump in those saying they found work “probably represents people finally feeling good enough, and credit is flowing freely enough, to start businesses,” Zandi said. “That augers very, very well.”

Dr. Charles W. Hodges, professor of finance at University of West Georgia, said that despite a persistent problem with home foreclosures, other economic signs point to a strengthening recovery.

To get a better feel of current economic activity, it’s better to look at jobless claims, state tax collections or to talk with your neighbors, he told the Associated Press.

“Are they getting jobs, being laid off and are their children getting jobs?” Hodges said.

He said construction is important to the economy but monthly foreclosure figures are not a good predictor. He said overall economic indicators are looking better.

“Take a look at the tax collections in Georgia,” Hodges said. “They are increasing significantly, telling us that economic activity is going up.”

 

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03
Feb
12

Zakaria: Democracy takes time

February 3rd, 2012
12:07 AM ET

Editor’s Note: Make sure to tune in Sunday at 10a.m. or 1p.m. EST for Fareed Zakaria GPS on CNN.

By Fareed Zakaria, CNN

Dozens of Egyptians were killed in a soccer stadium brawl this past week. This was the deadliest outbreak of violence since Hosni Mubarak was ousted one year ago. The violence didn’t stop at the stadium and it begs the question: What has Egypt gained since its revolution? Take a step back and ask: What has the Arab Spring achieved in the last year? Has people power failed the people? What in the world is going on?

In Egypt, the military might be more entrenched than before. Meanwhile a quarter of the seats in parliament have gone to a group of ultra conservative Islamists. Only 2% have gone to women. Or consider Libya. It’s veering towards anarchy. The local militias that helped topple Moammar Gadhafi have reneged on a pledge to give up their arms.

Look at Tunisia. You’ll remember that a fruit vendor there sparked the Arab Spring by setting himself on fire. Well, now there are reports of many more such incidents of self-immolation. From Tunisia, to Egypt, to Libya, democracy has unleashed turmoil and long-suppressed expressions of Islamic fundamentalism.Perhaps, some will say, the Arab world didn’t fully understand what it was getting into. Perhaps, others will argue, after years of living under tyranny, Arabs just don’t know how to rule themselves.

I say, let’s look at some history. Democracy has never been easy. Consider what so many democratic revolutions looked like – a year or two after they started. Take America: After the revolutionary war, the country was in economic, political, and social turmoil. By 1779, inflation was at close to 400%. Per-capita income had halved between 1774 and 1790. Remember the armed Shays’ Rebellion of 1786? It was seen by many as evidence that people power would go awry and upend the union.

Or consider France. After the onset of the French Revolution things got really bad. The symbol of the revolution became not libertéégalité, fraternité but the guillotine.

Or look at India, the world’s largest democracy. It welcomed freedom in 1947 after centuries of foreign rule. And yet the ensuing months brought with it mass riots over Partition, the deaths of millions of Hindus and Muslims. Five months after freedom, the father of the nation, Mahatma Gandhi, was assassinated. In Indonesia, in the 1990s, a year after Suharto fell, a hapless man, BJ Habibie became president amidst economic collapse and rising Islamic radicalism. His presidency lasted exactly 17 months.

Now we remember the Eastern European revolutions of 1989. But those are really the exceptions that prove a much more messy rule. The process of becoming democratic has always been chaotic. Mistakes are made. Lives are lost. And in the most dire moments, people have always doubted that there would be a good outcome. We need to keep that in mind when we assess the Arab Spring.

Democracy might be messy. It’s certainly complicated. It takes a while to consolidate. But for the first time in perhaps a millennium, the Arab people are taking charge of their own affairs. So let’s cut them some slack. It’s only been a year.

Make sure to tune in Sunday at 10a.m. or 1p.m. EST for GPS on CNN. For more of my thoughts throughout the week, I invite you to follow me on Facebook and Twitter and to visit the Global Public Square every day. Also, for more ‘What in the World’ pieces, click here.

03
Feb
12

Newt, Mitt and Latinos

Editor’s note: Ruben Navarrette Jr. is a CNN.com contributor and a nationally syndicated columnist.

San Diego, California (CNN) — On the eve of the Nevada caucus, here’s some advice to Newt Gingrich: If you still want to draw contrasts with Mitt Romney over immigration, don’t toss in your cards. Double down.

Why? Because you’re not in Florida anymore.

In the Sunshine State, Gingrich used a controversial and hard-hitting ad to try to paint Mitt Romney as “anti-immigrant.” The goal was to weaken the frontrunner’s support with Hispanic voters. Despite the fact it made some party loyalists nervous, the label fit. Romney got carried away in the GOP primary, railing against anything resembling “amnesty” in an attempt to offer himself as the preferred candidate for the hostile, intolerant, and frightened. There’s a reason that Romney was endorsed by Kansas Secretary of State Kris Kobach, an opportunistic, anti-illegal immigration zealot who helped write many of the constitutionally challenged pieces of legislation clogging up the federal courts in a half dozen states.

Ruben Navarrette Jr.

Ruben Navarrette Jr.

Thus, Gingrich had the right strategy. And yet it backfired. Members of the Hispanic establishment in Florida criticized him and demanded he pull the ad. So what went wrong? Ethnicity and geography played a key role in the Florida result.

The overwhelming majority of Hispanic voters in Florida are either Cuban-American or Puerto Rican. They don’t have a dog in the immigration fight. While supportive of comprehensive immigration reform and measures like the Dream Act, which would give undocumented students legal status if they go to college or joined the military, these groups aren’t directly impacted by the debate. Their lives aren’t affected one way or the other by the fact that there are 11 million people in the United States without legal status or that the Obama administration has deported a record 1.2 million people in three years.

Since Puerto Rico is a U.S. commonwealth, Puerto Ricans are U.S. citizens at birth. Meanwhile, Cubans have carte blanche due to the Cuban Adjustment Act, which gives automatic legal status to Cuban immigrants and makes it all but impossible to remove them once they set foot on the U.S. shoreline.

However, Mexican immigrants are not so lucky. Along with Mexican-Americans, they represent more than two-thirds of the U.S. Latino population. For this group, the immigration debate is deeply personal. In a December 2011 study by the Pew Hispanic Center, nearly one quarter (24%) of all Hispanics said they knew someone who had been deported or detained in the past year.

Most Mexicans and Mexican-Americans live in the Southwest. This is the same area of the country where the Republican candidates for president will be spending a lot of time in the next few weeks. After voters go to the polls on Saturday in Nevada (where Hispanics account for 26.5 percent of the population), they’ll cast ballots on February 7 in Colorado (20.7 percent) and on February 28 in Arizona (29.6 percent).

These groups of voters are unlikely to do what the Florida voters did and simply shrug off the charge that Romney is anti-immigrant. They’re more likely to take umbrage at some of the positions that Romney has taken — for instance, his opposition to the Dream Act as presently written. The bill has the support of 90 percent of Hispanics. So while Romney won a solid majority of the Hispanic vote in Florida, 54 percent to 29 percent for Gingrich, the challenger should not be discouraged. Instead, Gingrich should dust off the “anti-immigrant” ad he used against Romney there and air it again in Colorado and Arizona. He should reopen the immigration debate and force Romney to defend himself. The presumptive GOP nominee needs to explain whether he sees immigrants — legal and illegal — as a net positive or negative to the United States.

Romney also needs to take responsibility for a massive flip-flop: Having spent months attacking his opponents for supporting proposals that would allow the undocumented to pay in-state university tuition or work legally in the United States, Romney told a roomful of Hispanic conservatives in Florida that he supports giving illegal immigrants “temporary worker permits.”

Under the Romney plan, the undocumented could remain in the U.S. to work for a certain period of time. After the time is up, the immigrants would hopefully “self-deport” but the government wouldn’t make them leave. It’s the very thing that the old Romney would have derided as a form of amnesty — that is, before he discovered Florida’s sizable Hispanic population and felt the urge to pander to it.

Romney is vulnerable with Hispanics. Gingrich needs to use the primaries and caucuses in the Southwest to go back on the offensive. The immigration issue lets him do that. Gingrich has to stop whining about what he calls Romney’s stunning level of dishonesty. What did he expect from a fellow politician?

Instead, Gingrich needs to start making the case to Republican voters that the road to the White House goes right through the U.S Hispanic community and that he alone can lead the way.

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21
Nov
11

Midwest farm land rising steeply in value

Agricultural land value is soaring in the Midwest, with parts of the region surging 25% from last year, according to two recent Federal Reserve surveys. The jump is the highest increase in three decades.

Record farmland prices are also being reported in the northern Plains.

Surveys released by the Kansas City and Chicago Federal Reserves Tuesday find that despite a struggling U.S. housing market, agricultural land in their districts is booming. And the run-up in prices may have yet to peak, they said.

“District farmland values surged to a record high in the third quarter,” the Kansas City survey said. “Cropland values rose more than 25 percent over the past year, and ranchland values increased 14 percent.”

In particular, Nebraska experienced exceptionally strong gains in the Kansas City District due to bumper crops — especially productive seasons for certain crops — reporting a roughly 40% rise in farmland prices from one year ago.

More real estate news

The surveys indicate that good credit conditions, successful harvests, and elevated levels of farming income helped to contribute to this large surge in an already strong agricultural property market.

According to the Chicago Fed, farmland values in its district had their largest increase since 1977, jumping 7% from the previous quarter.

Iowa farmland prices led the Chicago Fed’s district, jumping 31% from last year’s 3rd quarter.

0:00 / 2:37 Turning farmland into oil fields

However, not every state in the region had such historic success.

The southern Plains, Oklahoma in particular, saw more modest increases — mainly due to devastating droughts, affecting yields from crops and livestock.  To top of page

18
Nov
11

Industry seeks cleaner fracking fluid

Last summer a Halliburton executive did the unthinkable: He took a big ol’ swig of hydraulic fracturing fluid.

No, he didn’t have a death wish. And yes, he appears to be doing just fine. He did it to prove a point: fracking fluid need not be toxic.

What the exec drank was a new formulation of fracking fluid made with ingredients sourced from the food industry rather than the chemical industry.

As public concern over the controversial practice of fracking mounts, Halliburton and a host of other companies are racing to fill a major void: finding a way of cracking rock to unlock oil and natural gas that is also environmentally benign.

There are still a host of concerns surrounding fracking that aren’t addressed by changing the fluid or purifying the water. But as more firms bring innovative technologies to market, chances grow that this technology might someday be embraced by the general public.

Fracking fluid from the food industry: Halliburton announced its new fracking formulation earlier this year to relatively little fanfare.

Traditional fracking fluids rely of hydrochloric acids and other chemicals that allow the industry to crack shale rock. The technology has unleashed a boom in domestic energy production, but it’s also raised concerns over water contamination.

Halliburton’s new fracking formula and methods “don’t quite call for the downhole delivery of fruits and vegetables,” the company’s web site reads. “But it does rely on some of the same acids and enzymes present in those items to create one of the most innovative and environmentally safe fracture solutions ever conceived.”

Halliburton (HAL, Fortune 500), which is one of the world’s largest hydrofracking companies, wouldn’t say how many of the wells it works on have used the new formula or how much more it costs compared to a traditional frack job.

But it pointed to a well operated by the El Paso (EP, Fortune 500) natural gas company in North Louisiana as the first last May to employ this new fluid and two other innovative fracking measures designed to protect the environment.

Halliburton is hardly alone in this quest to make fracking safer. And as with any emerging technology, many small, nimble firms are also taking up efforts to clean up the fracking process.

San Diego-based Verenium (VRNM) is a company that makes enzymes primarily for the biofuels and chicken feed market.

But it has recently branched into fracking, developing an enzyme that replaces hydrochloric acid normally used to eat away at guar, a foam the industry uses that initially helps pry the rock open.

Land a job in a North Dakota boomtown

“You spill an enzyme on your hand and nothing happens, it doesn’t eat it off like an acid would,” said Verenium chief executive James Levine. “And it’s not like you have to sacrifice performance, you can get both.”

Levine also wouldn’t elaborate on costs, but said he can deliver a product that’s competitive with anything out there.

He said he has one major fracking firm that’s experimenting with his product, but declined to provide any more details.

He noted that replacing hydrochloric acid with an enzyme doesn’t take all the potentially harmful chemicals out of frack fluid, but it’s a start.

Companies are also working on cleaning up waste water associated with fracking.

In addition to the harmful frack chemicals oil companies put down the wells, they also pull out some pretty nasty stuff.

The water that’s found at the depth the industry drills to is often extremely salty and laced with naturally occurring heavy metals and radioactive isotopes.

0:00 / 2:24 Lady roughnecks in North Dakota man-camps

Disposing of this waste water has been a challenge. Reports have indicated that some frack water has previously been improperly treated before being dumped into rivers that are also used a source for drinking water.

Fountain Quail, a division of Calgary-based Aqua Pure, which bills itself as the “premier recycler of industrial wastewater in North America” says it too is now getting in on the fracking game.

The company has built a small, transportable machine that uses natural gas to boil the waste water from fracking operations.

It’s a closed loop-process, meaning that the steam created is in turn used to reheat the next batch of water, resulting in an efficiency rate 40 times greater than just boiling water on a stove.

The end result is water that meets federal drinking standards, and a solid waste product that can be transported to a proper landfill.

The fracking public relations mess

The clean water can be used again in fracking operations, resulting in what the company says is a 90% reduction in truck traffic serving the drill sites. Truck traffic is a major concern among people living in areas where fracking is widespread.

“Every barrel of salt water that we recycle is a barrel of fresh water that doesn’t have to be taken from the environment,” said Brent Halldorson, Fountain Quail’s chief operating officer.

Halliburton also has a technology that uses electricity as the purification agent.

“Companies are looking at water as a strategic resource, and that’s cascading into innovation,” said Will Sarni, director of enterprise water strategy at Deloitte Consulting. “Sustainability is a huge driver.”

But is it any safer? Environmentalists regard the new technologies as welcome but unproven.

“It’s good news that companies are trying to innovate and develop products that are more environmentally friendly,” said Amy Mall, a policy analyst for the Natural Resources Defense Council. “But we need third party verification of these claims.”

Mall noted that other problems associated with fracking remain, such as the migration of natural gas unlocked by the fracking process up water well holes.

It’s this gas migration, whether caused by the fracking process or not, that’s led to the dramatic images of people’s tap water catching fire.

There have also been recent reports suggesting fracking is behind a series of earthquakes in Oklahoma, England and elsewhere.

Still, for an industry under fire from the public and politicians alike, any attempt to make the process safer is bound to be welcome.  To top of page