Fracking Ban Could Hamstring Important Energy Producing States
Posted March 2, 2020
The U.S. is the world’s leading producer of natural gas and oil, and a net exporter of total energy, but unrealistic policy proposals could put America’s progress is at risk. A nationwide ban on hydraulic fracturing and federal natural gas and oil leasing could erase a generation of industry growth and innovation, according to API’s latest economic analysis, and several U.S. states are in the crosshairs.
Modern hydraulic fracturing – or fracking – has delivered widespread economic and environmental progress. But per API’s report, a fracking ban could result in the loss of $7.1 trillion in cumulative GDP and millions of jobs by 2030 and could trigger a U.S. recession.
The nation could lose progress toward energy security and return to dependence on foreign suppliers of natural gas and oil. American farmers could see their incomes decline 43%, and household energy costs could increase, on average, $618 per year even while consuming 12% less energy – including higher prices for gasoline, natural gas, electricity and heating oil.
At the state level, negative impacts could be especially acute – in Pennsylvania, Ohio and Colorado, where the transformative nature of fracking has unlocked good-paying jobs and revitalized other industries.
Pennsylvania would be among the states hardest hit, with more than 550,000 job losses in 2022 throughout the economy. The 150,000 jobs supported by natural gas and oil production and development will be especially at risk. API-PA Executive Director Stephanie Catarino Wissman commented:
“America’s natural gas and oil renaissance, strengthened by hydraulic fracturing and horizontal drilling in the Marcellus and Utica Shale, has helped revitalize Pennsylvania’s manufacturing and agricultural industries. By banning these state-of-the-art technologies, lawmakers could cripple energy development in the commonwealth and subsequently threaten good-paying jobs and access to affordable fuels.”
Increasing natural gas consumption, particularly in power generation, has also led reductions in Pennsylvania’s carbon dioxide (CO2) emissions. As the share of natural gas consumed for electricity generation grew 321% in the past decade, electric power sector CO2 emissions decreased by nearly 40% between 2007-2017.
Additionally, the methane intensity of natural gas production in the Marcellus and Utica shale, the primary producing regions of Pennsylvania and Ohio, has fallen more than 75% since 2011 – signaling the industry’s ongoing progress toward both energy development and environmental protection.
In Ohio, the projected negative impacts are similar, as the state could also lose more than 500,000 jobs in 2022. The American energy revolution has generated thousands of jobs and delivered affordable energy to local businesses and consumers, and a federal ban on fracking and leasing could hamstring the state’s energy sector and create a ripple effect on Ohio’s economy.
Likewise, Colorado could lose more than 350,000 jobs as a result of a fracking ban. As of 2017, the energy sector added about $13.5 billion to the state’s GDP, strengthening local economies and supporting education – a risk for the industry represents a threat to the public good. Colorado Petroleum Council Executive Director Lynn Granger explained:
“Colorado’s economy and environment has uniquely benefitted from natural gas and oil produced by hydraulic fracturing. Thousands of local jobs and billions of dollars in state revenue are at stake, and restrictive policy proposals threaten the sustainability and long-term success of industry operations.”
More than 95% of new natural gas and oil wells drilled today are developed with fracking, and energy development on federal lands, onshore and offshore, accounts for 14% of the natural gas and nearly 25% of the oil produced domestically.
In 2022, job losses under a fracking ban could total 7.5 million – or 4.8% of total U.S. jobs – with nearly 2.5 million jobs lost in Texas, California and Florida. Other top states for job losses as a share of overall employment include North Dakota, Oklahoma, New Mexico, Wyoming, Louisiana, West Virginia and Kansas.
America’s natural gas and oil industry delivers affordable fuels for consumers, good-paying jobs for workers and emissions reductions in communities across the U.S. But with global energy demand on the rise, an outright ban on fracking and federal leasing for energy development risks an uncertain energy future.
For more information, view the full report and the state job losses one-pager.
About The Author
Sam Winstel is a writer for the American Petroleum Institute. He comes to API from Edelman, where he supported communications marketing strategies for clients across the firm’s energy and federal government practices. Originally from Dallas, Texas, Sam graduated from Davidson College in North Carolina, and he currently resides in Washington, D.C.