Most of the top Democratic presidential contenders have called for eliminating hydraulic fracturing, but such a ban would be “catastrophic” for the U.S. economy, according to a report released Thursday.
The U.S. Chamber of Commerce’s Global Energy Institute found that a fracking ban would double gasoline prices, raise the average cost of living by $5,561 per person, and throw 19 million people out of work over a five-year period.
“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,” GEI President Marty Durbin said in a statement. “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.”
Prohibiting fracking, the process of injecting high-pressure liquids into the ground to loosen oil and gas reserves, would also quadruple electricity prices and reduce Gross Domestic Product by $1.7 trillion, while natural gas prices would soar by 324% from 2021-25.
Democratic hopefuls Sens. Bernard Sanders and Elizabeth Warren said earlier this year they would impose a nationwide fracking ban upon assuming office, while former Vice President Joseph R. Biden told voters in September that “we’re gonna end fossil fuel.”
A ban on fracking would effectively represent a ban on U.S. natural-gas extraction, given that 95% of natural-gas production involves hydraulic fracturing.
Democrats have argued that fossil fuels would be replaced by green energy. In 2018, wind power accounted for 6.5% and solar for 1.5% of the national electricity grid, while natural gas made up 35.2% and fossil fuels overall were 63.6%, according to the U.S. Energy Information Agency.
Critics argue that fracking contributes to climate change by making natural gas more abundant and cheaper, thus reducing incentives for solar and wind, while proponents note that the U.S. has led the world in reducing greenhouse gas emissions by moving from coal to natural gas, a transition made possible by the shale revolution.
The GEI report concluded that local, state and federal tax revenue would fall by a combined $19 trillion, cutting off “a critical source of funding for schools, first responders, infrastructure, and other critical public services.”
Hit hardest would be energy-producing states such as Colorado, New Mexico, Ohio, Pennsylvania and Texas. Three states — New York, Maryland and Vermont — have banned fracking, but only Maryland has provable gas reserves.
Last week, the Trump administration ended a five-year moratorium on drilling and fracking on federal land in California, opening up 1.2 million acres in the greater Central Valley area and defying Gov. Gavin Newsom, a fracking critic.
A month ago, Mr. Newsom drew cheers from environmentalist by halting the approval of fracking permits until they can be reviewed by an independent board.
“These are necessary steps to strengthen oversight of oil and gas extraction as we phase out our dependence on fossil fuels and focus on clean energy sources,” Mr. Newsom said in a statement. “This transition cannot happen overnight; it must advance in a deliberate way to protect people, our environment, and our economy.”