Ignoring externalities IS subsidy - Krugman

So it’s worth pointing out that special treatment for fracking makes a mockery of free-market principles. Pro-fracking politicians claim to be against subsidies, yet letting an industry impose costs without paying compensation is in effect a huge subsidy. They say they oppose having the government “pick winners,” yet they demand special treatment for this industry precisely because they claim it will be a winner.

http://www.nytimes.com/2011/11/07/opinion/krugman-here-comes-solar-energy.html