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Can the oil and gas boom teach us how to fix drug problems in America?

It’s not just power-hungry pot farms: the connection between drugs and oil and gas industry runs deep. alex-s/flickr, CC BY-NC

Can the oil and gas boom teach us how to fix drug problems in America?

It’s not just power-hungry pot farms: the connection between drugs and oil and gas industry runs deep. alex-s/flickr, CC BY-NC

Perhaps you’ve heard of the heavy energy footprint of indoor marijuana farms. But this is just one of a number of surprising and important connections between the energy and drug industries.

Most important, both industries have operated within a dysfunctional national policy. Critics have observed for decades that a single, coherent national energy policy has been nonexistent, and there’s growing agreement that our drug policy has been a failure.

Both affect the economy, environment, health and national security. Both are intertwined with visions of personal liberty. And both are subject to a patchwork quilt of competing federal and local regulations that vary from state to state. They are more connected than people realize.

These connections can be instructive. In particular, the dramatic changes in the U.S. energy industry over the past decade could provide some insights into how to make progress on the country’s drug problem.

Drugs on the oil patch

Some of the intersections between energy and drugs are humorous or harmless. Like Florida Power & Light’s agreement to help local law enforcement officials burn confiscated marijuana to dispose of it, serving as a source of biomass power and increasing the percentage of electricity generated from renewable sources. Or the way electric utilities can tell by your meter whether you are growing marijuana in a closet with UV grow lamps because of round-the-clock electricity usage patterns that are different from the other electrical appliances in most homes. Indeed, smart metering devices helped to stop the thieving of hundreds of millions of dollars of electricity annually by marijuana growers in British Columbia, Canada.

Electric utilities, confronted with very little growth in demand for their product nationally, look at the legalization of marijuana with a gleam in their eye, as large-scale farms represent a significant new load on the grid and perhaps billions of dollars or more of annual revenues for grow lights, pumps and climate control systems.

The domestic oil and gas boom has brought jobs to many Americans, but the influx of outside workers has led to some social issues, including a rise in drug use. viatorci/flickr, CC BY-NC

There are other connections. The boom in getting natural gas and oil from shale rock has brought a lot of good news: jobs, wealth and the prospects of energy independence. But these booms also bring with them undesirable outcomes: a surge in drug use.

In the Eagle Ford shale play of South Texas, for example, an epidemic of methamphetamine, cocaine and marijuana use accompanied the men who traveled there looking for work and were rewarded with lots of money and not much else to do for entertainment. Drug dealers flock to the “mancamps” looking for easy targets. Drug-related arrests outpaced population growth, creating a strain on local law enforcement and undermining the bucolic appeal that draws people to live in the small towns in the first place.

Drug use also introduces further environmental and social risks. Domestic violence increases. There are potentially more traffic accidents that put lives at risk or damage the environment when tankers filled with toxic wastewater spill their cargo.

The Eagle Ford shale in Texas is particularly vulnerable because it borders the region of Mexico under control by the Zetas cartel. Drug runners disguise their cargo in trucks decorated with logos from oil companies.

Drug use is strictly forbidden on oilfield sites because of the dangers of the job. Dealing with explosive gases and flammable liquids mean small mistakes can be deadly. Drug testing is widespread and companies work hard to keep drugs out of the workplace, including no-tolerance policies and random drug tests. But the other jobs that pop up around the oilfields do not have the same standards.

Funding violence with energy

There are also geopolitical ramifications when energy and drugs are intertwined.

One of the world’s biggest energy stories is reform of the Mexican energy sector. After 75 years of constitutional prohibition on international collaboration, Mexico is changing its constitution to allow western investment in energy projects.

The Eagle Ford shale, which has been prolific, going from basically zero production to over one million barrels per day in just a few years, doesn’t end at the Texas border: it extends south into northern Mexico.

The Mexican oil and gas boom could be even bigger than what we experienced in the United States, transforming Mexico’s economy. Except that drugs are getting in the way.

Mexico has opened up its oil industry to foreign investment, but development could be hampered by illegal drug activities. CC BY

The part of Mexico with the richest reserves of oil and gas is a critical ferrying route for drugs to the United States and Canada. Attacks by drug gangs are inhibiting the energy revolution from taking root. The security challenge in Mexico and the competition from the cartels for manpower and social standing make it difficult for international energy companies to put their money or people at risk.

Frustrating oil producers further, the drug interests are stealing oil. PEMEX, the state-run oil company in Mexico, estimates that cartels have drilled thousands of illegal taps into pipelines, siphoning off more than US$1 billion worth of oil in 2013 alone.

In addition to the economic and social challenges that energy poses for drugs and vice versa, the national security connections are even trickier.

The Islamic State, or ISIS, for example, uses illicit oil revenues in the Middle East to fund its destabilizing campaign of violence. Al-Qaida did the same thing in Afghanistan with poppies for producing heroin.

We could hope the worldwide drop in oil prices would slow ISIS down, but the attacks in Paris and Brussels indicate that low oil prices might have an accelerating effect instead. Rather than cutting off their funding, lower revenues could have made them more desperate for headline-grabbing activities, which could be true for any drug-financed terrorist group.

Aligning technology and policy

With all these interconnections and challenges, what are we to do? Interestingly enough, the shale revolution in the United States might show us the pathway forward.

Today the U.S. drug problem seems permanent and unfixable, as did the energy picture just a few years ago. But the shale revolution turned things around. That revolution, which unlocked tremendous reserves of oil and gas, took many by surprise, seeming to happen overnight. But it unfolded over decades.

After U.S. oil production peaked in 1970-1971, we entered a four-decade stretch of doom and gloom: steadily declining energy production, ever-growing energy consumption, increasing energy imports and the specter of exponentially accumulating carbon emissions into the atmosphere. Those trends undermined our geopolitical goals, impinged on the environment and were costly to the economy. Simply put, our energy trends were worsening and our energy policy was a mess. Notably, the use of illegal drugs increased during this period.

But in the last few years energy trends have reversed themselves: U.S. energy production has increased; consumption has dropped because of efficiency; imports shave shrunk significantly; and our CO2 emissions have dropped to levels that we haven’t seen since the 1990s.

The convergence of highly functioning markets; stable, forward-thinking policies; and disruptive technologies like hydraulic fracturing and horizontal drilling enabled the entire energy revolution to take hold. For the first time since the 1960s our energy markets, policies and technologies aligned and the result is powerful.

It goes to show that a public-private-technological partnership is transformative and can cause seemingly intractable trends to reverse themselves. But while the energy industry has turned around, recreational drug use has not.

What if we took the same approach to other vexing societal problems, like drugs? What if we got our policies, markets and technologies to align around the goal of reducing illegal drug use, reducing addiction, and reducing the downsides of the drug world’s seamy underbelly?

What if we had stable government policies about drugs that differentiated criminals from people who have an addictive disease and distinguishes between casual users and excessive users? Policies could also support significant R&D and technology investment for diagnosing and managing addiction and detecting illegal contraband. We could combine that with regulated markets that put a steep price on drugs, disincentivizing their use.

A pipe dream? Perhaps. But remember that it took only a few years of the shale revolution to turn our dour energy situation into one that is cause for optimism. Maybe we can do the same for our drug policies, taking them from feckless and confused to rational, sensible and effective.

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