By 2025, the price of gasoline would double and government revenue would plummet by almost $1.9 trillion, according to What If … Hydraulic Fracturing Was Banned? The Economic Benefits of the Shale Revolution and the Consequences of Ending It, Kallanish Energy reports.
The 71-page study was released Thursday by the U.S. Chamber’s Global Energy Institute (GEI).
Millions of jobs lost, trillions of dollars of GDP
Banning fracking would eliminate 19 million jobs between 2021-2025, while reducing U.S. Gross Domestic Product by $7.1 trillion over the same period, according to the study.
In addition to the economic boon, the increased use of fracking has helped improve the environment, according to the study.
The GEI report notes carbon dioxide emissions have been reduced by more than 2.8 billion metric tons since 2005 — roughly the equivalent of annual emissions from Australia, Brazil, Canada, France, Germany and the UK — combined.
‘Cleaner and stronger’
“Increased oil and gas production driven by hydraulic fracturing has been fueling America’s sustained period of growth over the past decade, while making us both cleaner and stronger,” said Marty Durbin, president of the Global Energy Institute.
Cumulative impacts of fracking ban by 2025
|GDP impact||($261 billion)||($1.53 trillion)||($159 billion)||($7.11 trillion)|
|Household income impact||($114B)||($794 billion)||($88B)||($3.73T)|
|State & local tax revenue||($23.4B)||($107B)||($13B)||($600 billion)|
|Federal tex revenue||($50.3B)||($263B)||($26B)||($1.27T)|
|Per capita cost-of-living increase||$4,654||$7,280||$5,170||$5,661|
Source: U.S. Chamber’s Global Energy Institute)
“Our study shows that banning fracking would have a catastrophic effect on our economy, inducing the equivalent of a major recession and raising the cost of living for everyone across the country. This bad idea should be abandoned.”
The report is the first in the 2020 edition of GEI’s Energy Accountability Series, which examines what could happen if energy proposals from political candidates and interest groups were actually adopted.
Obviously, the use of fracking is a talking point for no fewer than six current Democratic Presidential candidates, including Elizabeth Warren, Joe Biden, Bernie Sanders, Cory Booker, Pete Buttigieg, and Tulsi Gabbard.
The 2020 study updates a study first done in 2016 with new data and analysis, and several new states.
The report provides national impacts of a fracking ban, as well as state-specific impacts for five energy producing states: Colorado, New Mexico, Ohio, Pennsylvania, and Texas, and two states with limited energy production, Michigan and Wisconsin.
Even states with modest energy production impacted “Due to the devastating economy-wide impacts of a fracking ban, residents in Michigan and Wisconsin would experience similar levels of hardship as those in energy-producing states,” according to the study.
“For instance, the cumulative cost of living increases for a residential consumer from 2021-2025 is almost as great in Michigan ($5,170) and Wisconsin ($4,777), as it is in Ohio ($5,625), Pennsylvania ($4,654), Colorado ($6,490), Texas ($7,280), and New Mexico ($5,790), demonstrating the impact of a fracking ban on manufacturing and the overall U.S. economy.”
A ban on fracking would be a geopolitical setback for the U.S., the GEI study states, which would return to reliance on international suppliers of oil and natural gas, including Russia and members of Opec, giving these countries greater clout in international energy markets.
“Higher global prices because of reduced U.S. production would benefit our economic and geopolitical competitors and cede valuable market share to countries like Venezuela, all at a time when demand for oil and natural gas is set to grow considerably around the world, according to the International Energy Agency,” the study states.
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