Here’s How to Devastate U.S. Energy and the World Economy: Ban Fracking
Posted November 14, 2019
Calls for a ban on hydraulic fracturing by some of the Democratic presidential candidates continue to make for discussion on the campaign trail – and boy, that is a discussion everyone should be paying attention to. The stakes are sky-high.
Recently, we highlighted this Michael Lynch analysis warning that a fracking ban could devastate the U.S. economy. Now the Manhattan Institute’s Mark P. Mills has a piece on Real Clear Energy asserting that in the most serious scenarios, banning U.S. fracking could put the global economy in recession – entirely plausible, given that the United States is the leading producer of natural gas and oil, the two energy sources that supply 54% of the globe’s fuel. In all, Mills notes in this report, fossil fuels supply 84% of the world’s energy.
Those are the stakes when candidates kick around the notion of banning hydraulic fracturing, which is used for 95% of new U.S. wells today. Ban fracking and you pull the rug out from under U.S. production – and with it, energy security, global energy leadership and, yes, environmental progress – considering increased U.S. use of natural gas has lowered energy-related carbon dioxide emissions to their lowest levels in a generation.
To be clear: The fracking-ban rhetoric from some candidates in the presidential race is unrealistic (which Mills points out later in this post), and those promising to end fracking in federal areas on Day 1 of their administrations are either uninformed or dismissive of the facts – and recklessly playing to the crowds. Mills in the RCE article:
Enthusiasms for alternatives aside, solar and wind combined supply less than 2 percent of world energy, while 54 percent still comes from oil and natural gas. Many analysts have pointed to the domestic jobs and revenues that will be lost were America to shut down fracking. But that’s the least of it. Far more significant: removing that quantity of fuel from world markets would trigger the biggest energy price spike in history, and a global recession.
Ban fracking and you put a serious crimp in U.S. production. Certainly, in the event of fracking ban, it’s likely there could be more conventional production. Yet, respected energy analyst Robert McNally says a ban would “vaporize” the U.S. energy revolution. It also would significantly undercut consumers, our economy, job creation and freedom – in the sense that we would become more dependent on oil imports instead of less – as has been the strong, positive trend since the energy revolution launched.
Federal Reserve Chair Jerome Powell said this week a fracking ban likely would hurt the economy. Powell told lawmakers on Congress’ Joint Economic Committee:
“To shut down the shale industry, yeah, that would probably not be a good thing for the economy. … The energy independence of the United States is something that people have been talking about for 50 years and I never thought it would happen, and here it is. … It’s a great thing.”
We agree. History shows what has happened when significant amounts of oil suddenly were removed from the markets for political reasons, Mills writes. The 1973 oil embargo drove world oil prices up 350% and triggered a global recession, he says. Unrest in Iran in 1979 undercut that country’s oil exports, caused a 200% global price spike and set off another worldwide recession. We can’t know whether a U.S. fracking ban would have that same effect. But, again, given the clear impact surging U.S. production has had on global markets, the effects likely would be severe – at a minimum removing the cushion U.S. production has provided in the global market, helping shield U.S. consumers from the worst impacts of supply disruptions, such as the price spikes that followed this year’s terror attack on a Saudi oil processing facility.
Renewables are a growing part of America’s energy mix, but Americans must be realistic in the presence of facts. Key points in the Manhattan Institute report authored by Mills:
- At this point wind, solar and batteries provide about 2% of the world’s energy and 3% of America’s. A chart from the report:
- While solar and wind technologies have improved greatly and will continue to become less expensive and more efficient, the physics boundaries for each rule out the era of large gains in energy production.
- The annual output of Tesla’s Gigafactory, the world’s largest battery factory, could store 3 minutes’ worth of annual U.S. electricity demand. It would take 1,000 years of production to make enough batteries for two days’ worth of U.S. electricity demand.
“It is magical thinking to believe that shale production could be replaced quickly by wind and solar – at any price, and regardless of climate change motivations.”
The Manhattan Institute report puts it this way:
This daunting challenge elicits a common response: “If we can put a man on the moon, surely we can [fill in the blank with any aspirational goal].” But transforming the energy economy is not like putting a few people on the moon a few times. It is like putting all of humanity on the moon—permanently.
Again, too much is at risk to dismiss this talk as campaign-trail jockeying. A truer test may come if the Senate considers a resolution asserting that no president has the authority to ban fracking. Still, elections matter. Executive orders have impact. An administration’s control of the regulatory machinery fosters outcomes.
Bottom line: Talk of unilaterally hamstringing U.S. natural gas and oil production represents a vision that would return America to an era of energy scarcity and a future where Americans’ energy options limit this country’s vision and its ability to do good for its citizens and the world. It would throw away the progress created by the energy revolution for little more than fingers-crossed aspirations.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.