A new study in the journal Annual Review of Environment and Resources summarizes the environmental costs and benefits of fracking, based on a review of 165 academic research articles and databases. Read a summary here at Science Daily. The full article is available here.
The article highlights some important tradeoffs, and does a nice job dispelling some myths. Perhaps the most important point is that there is still a lot that we don't know about this controversial procedure.
What do we know? Fracking uses a lot of water, but the use of natural gas instead of coal, nuclear or ethanol saves a lot of water. Groundwater contamination is possible (and not as likely as you might think according to the study), but contamination of the air with C02 is decreased significantly.
Fracking will most certainly continue. A massive source of energy is not going to be ignored. Basic supply and demand tells us that this will delay the transition to renewables, perhaps for a long time. The principle questions are what to do with the waste water and whether research into the costs and benefits can take place at a rate that parallels the growing demand for cheap energy.