[Source: Midland Reporter Telegram] As the 2020 presidential election campaign heats up, some candidates have called for a total ban on hydraulic fracturing while other groups support a “keep it in the ground” policy against producing fossil fuels.
Such comments come as the Global Energy Institute, part of the US Chamber of Commerce, issued a new study on the economic impact of a hydraulic fracturing ban.
“We’re aware some things are said in a campaign don’t become reality,” Marty Durbin, president of the institute, said in a teleconference with media. “It’s early in the process and perhaps the conversation will change.”
Even if one of the candidates who wants to ban fracturing is elected president, he or she may not be able to completely ban the practice, its use on federal lands could be eliminated, and regulations could be put in place to significantly restrict fracturing.
“Even if they don’t (ban), they need to look at the broader picture,” Durbin said. “It’s been an important benefit to the economy.”
Durbin said the new study is an update of a series of the institute’s Energy Accountability Series begun in 2016, which the institute asked a series of “what if” questions: What if hydraulic fracturing were banned completely? What if pipelines aren’t built in the northeast? What if energy production was banned on federal lands and in federal waters?
If hydraulic fracturing were banned, the study found the nation would lose 19 million jobs between 2021 and 2025 and the US Gross Domestic Product would plummet $7.1 trillion over that same time while government revenues would sink by almost $1.9 trillion. Energy prices would skyrocket, with crude prices rising to $130 a barrel, gasoline prices doubling and natural gas prices rising by 324 percent, quadrupling household energy bills and the cost of living would increase $5,661 for every American.
Texas would be especially hard hit, the report found, with a ban eliminating 3.2 million Texas jobs between 2021 and 2025. The state’s Gross Domestic Product would be reduced $1.5 trillion and state and local tax revenues would fall by $794 billion. The average Texan would see their cost of living rise by $7,280 by 2025 while household income would plunge by $794 billion.
Durbin said the ban would even impact states with limited energy production like Wisconsin, where the cost of living would rise by $4,700, and Michigan, where the cost of living would rise by $5,100.
“No sector of the economy would not feel the impact of a ban,” he stated.
The decrease in tax revenues would impact the ability of the federal and state governments to fund education, public safety and infrastructure while the resulting decline in domestic crude and natural gas production would result in increased reliance on imported crude and natural gas.
Durbin pointed out that the environment would also be impacted. Since the rise of hydraulic fracturing, US carbon dioxide emissions have fallen by more than 2.8 billion metric tons since 2005 – the equivalent of annual emissions from Australia, Brazil, Canada, France, Germany and the United Kingdom combined.
“States have the most important voices in this debate,” he said, citing New Mexico’s embrace of oil and natural gas as part of its economic prosperity.
He acknowledged that this report may be “preaching to the choir,” but as the debate over banning hydraulic fracturing continues and perhaps intensifies, “it’s time for the choir to sing louder. Candidates must realize this ban would harm those whose votes they need.”
As consumers begin to pay attention to the presidential campaigns, Durbin predicted they will have an impact on the debate, especially if they realize a hydraulic fracturing ban could double gasoline prices, among other economic impacts.
“The economy is in great shape, but it won’t be if they enact something like this,” he said.
Source: Mella McEwen, Midland Reporter Telegram
December 22, 2019
