Monday, January 20, 2020
(January 20, 2020) — New analysis by the U.S. Chamber of Commerce’s Global Energy Institute finds that a ban on hydraulic fracturing in the U.S., as proposed by Democratic presidential candidates, would eliminate 19 million jobs between 2021 and 2025. The prohibition would also reduce U.S. gross domestic product by $7.1 trillion over the same period.
Further, energy prices would skyrocket, with natural gas prices rising by 324% and causing household energy bills to quadruple. In addition, the cost of living would increase by $5661 for the average American. By 2025, the price of gasoline would double and government revenues would plummet by nearly $1.9 trillion.
The Global Energy Institute notes that the shale revolution in the U.S. has transformed the economy and reduced emissions. The new study quantifies just how much America stands to lose if some presidential candidates succeed in ending it. The study comes as candidates and activist groups call for a ban on hydraulic fracturing, the technology that has made the energy revolution possible. Several major candidates have promised to pursue such an injunction if elected, and the results would deliver a staggering blow to the economy.
In addition to the economic boon, the rise of hydraulic fracturing has helped improve the environment. The report observes that carbon dioxide emissions have been cut by more than 2.8 billion metric tons since 2005—roughly the equivalent of annual emissions from Australia, Brazil, Canada, France, Germany, and the United Kingdom combined.
“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 (GEI). “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 takes a substantive look at what could happen if energy proposals from candidates and interest groups were actually adopted. The study is titled, What if Hydraulic Fracturing Was Banned? The Economic Benefits of the Shale Revolution and the Consequences of Ending It. The 2020 edition updates a study first done in 2016 with new data and analysis, and several new states are added.
The study uses the well-known and widely used IMPLAN input/output model that tracks monetary transactions within the economy between different industries, the government, and households. The report provides national impacts of a hydraulic fracturing 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.
Of particular note, due to the devastating, economy-wide impacts of a hydraulic fracturing ban, residents in Michigan and Wisconsin would experience similar levels of hardship as those in energy-producing states. For instance, the cumulative cost-of-living increases for residential consumers from 2021 to 2025 are nearly as great in Michigan at $5170, and Wisconsin at $4777, as they are in Ohio, $5625, Pennsylvania, $4654, Colorado, $6490, Texas, $7280, and New Mexico, $5790. This demonstrates the impact of a hydraulic fracturing ban on manufacturing and the overall U.S. economy.
The complete results of the report, including a detailed explanation of the methodology, is available for download at globalenergyinstitute.org.
(SOURCE: The Weekly Propane Newsletter, January 20, 2020, available by subscription)
Further, energy prices would skyrocket, with natural gas prices rising by 324% and causing household energy bills to quadruple. In addition, the cost of living would increase by $5661 for the average American. By 2025, the price of gasoline would double and government revenues would plummet by nearly $1.9 trillion.
The Global Energy Institute notes that the shale revolution in the U.S. has transformed the economy and reduced emissions. The new study quantifies just how much America stands to lose if some presidential candidates succeed in ending it. The study comes as candidates and activist groups call for a ban on hydraulic fracturing, the technology that has made the energy revolution possible. Several major candidates have promised to pursue such an injunction if elected, and the results would deliver a staggering blow to the economy.
In addition to the economic boon, the rise of hydraulic fracturing has helped improve the environment. The report observes that carbon dioxide emissions have been cut by more than 2.8 billion metric tons since 2005—roughly the equivalent of annual emissions from Australia, Brazil, Canada, France, Germany, and the United Kingdom combined.
“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 (GEI). “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 takes a substantive look at what could happen if energy proposals from candidates and interest groups were actually adopted. The study is titled, What if Hydraulic Fracturing Was Banned? The Economic Benefits of the Shale Revolution and the Consequences of Ending It. The 2020 edition updates a study first done in 2016 with new data and analysis, and several new states are added.
The study uses the well-known and widely used IMPLAN input/output model that tracks monetary transactions within the economy between different industries, the government, and households. The report provides national impacts of a hydraulic fracturing 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.
Of particular note, due to the devastating, economy-wide impacts of a hydraulic fracturing ban, residents in Michigan and Wisconsin would experience similar levels of hardship as those in energy-producing states. For instance, the cumulative cost-of-living increases for residential consumers from 2021 to 2025 are nearly as great in Michigan at $5170, and Wisconsin at $4777, as they are in Ohio, $5625, Pennsylvania, $4654, Colorado, $6490, Texas, $7280, and New Mexico, $5790. This demonstrates the impact of a hydraulic fracturing ban on manufacturing and the overall U.S. economy.
The complete results of the report, including a detailed explanation of the methodology, is available for download at globalenergyinstitute.org.
(SOURCE: The Weekly Propane Newsletter, January 20, 2020, available by subscription)
