The Game of Hydrofracking
The heated debate over hydrofracking between environmentalists and industrialists has continued and will continue until a consensus or compromise can be made between both groups.
Hydrofracking is the process of pressure-drilling a mix of water, sand and chemicals more than a mile vertically and horizontally into the earth to extract natural gas from the ground. The reason hydrofracking has been been the topic of such a debate is due to the negative impacts of hydrofracking to nearby areas. Although hydrofracking “has turned the U.S. gas supply from deficit to significant surplus,” the chemicals being drilled into the ground could contaminate the affected area’s water supply [1].
The solution? Environmentalists are pushing for complete disclosure from companies. They are “demanding detailed, well-by-well information about the type of chemicals that drillers inject. And they want it put on the Internet for all to see.” [2]. Although industrialists and large companies acquiescence to greater transparency regarding the nature of their operations, they are against fully disclosing all chemicals and ingredients to the public. They believe that the information will give away valuable trade secrets and come as a disadvantage to the company. Furthermore, “Even though big industry players do feel they might stave off the growing public backlash if they went pro-actively environmental, they won’t do so unless they are convinced most or all their rivals will at the same time or soon after. They think that the knowledge of the chemical content of their fracking fluid is too precious.” [1]. Large companies like Exxon and Mobile are refusing to unilaterally release all data.
This situation closely follows the situation of players in a game. Each industrialist/company is a player, and each player will only disclose information if all other players do that same. The best outcome is for all companies to disclose information. However, if one company refuses to go to pro-actively environmental, another company will also refuse to do the same, since that company risks the chance of giving off trade secrets to its rivals if it discloses information. The large companies and industrialists must find a Nash equilibrium that benefits all groups.
This game could be solved by new state regulations that require companies to publicly disclose the chemicals they use in their fracking process. By giving the companies (players) no choices, the game can be closed and the situation can be solved. It is because groups have choices and the ability to weight in the choices of their rivals that games exist. Montana became the 6th US state to pass regulations and so far, companies have proven to be fairly acquiescent to these regulations. Regulation by the state may just be the solution to the game of hydrofracking and disclosing ingredients.
References
[1] LeVine, Steve. “Have frackers pushed their luck too far?.” Foreign Policy 09 13 2011. n. pag. Web. 30 Sep. 2011. <http://oilandglory.foreignpolicy.com/posts/2011/09/12/have_frackers_pushed_their_luck_too_far>.
[2] Soroghan, Mike. “In Fracking Debate,’ Disclosure’ Is in the Eye of the Beholder .” New York Times 09 13 2011. 06 21 2010 n. pag. Web. 30 Sep. 2011. <http://www.nytimes.com/gwire/2010/06/21/21greenwire-in-fracking-debate-disclosure-is-in-the-eye-of-19087.html?pagewanted=all>.