Banning fracking and federal oil and gas leasing could trigger a U.S. recession, leading to a $1.2 trillion reduction in gross domestic product and 7.5 million lost jobs by 2022, according to a report Thursday by the industry’s largest lobbying group.
Swing states Pennsylvania, Ohio, and Texas — all hotbeds for natural gas production — along with Florida, would be among the states with the highest job losses, underscoring the political risk of proposals by Democratic presidential candidates to ban fracking and fossil fuel leases on public lands.
Those four states, plus California, would lose 3.6 million jobs combined by 2022, says the new report by the American Petroleum Institute.
The study projects job losses beyond those working in the fracking industry to include downstream sectors such as refining oil and gas, and other industries that would suffer from using more expensive energy, such as agriculture.
The oil and gas lobby projects an increase of $618 per year on average in household energy costs, including gasoline, residential natural gas for heating, electricity, and heating oil.
Average gasoline prices would be 15% higher, while electricity prices average 20% more per family, per year.
“The effects of a fracking ban would not just affect energy workers, but those who rely on energy, which is everyone,” said Mike Sommers, API’s president and CEO, in a briefing with reporters. “Considering these are key battleground states, I would expect there would significant reaction to such job losses as a consequence of these proposals.”
Democratic presidential front-runner Vermont Sen. Bernie Sanders, along with his liberal rival Massachusetts Sen. Elizabeth Warren, have pledged to impose a nationwide ban on fracking, a drilling technique for extracting oil and gas deep underground, as a means of eliminating fossil fuels and combating climate change. The other leading Democrats — Joe Biden, Pete Buttigieg, Minnesota Sen. Amy Klobuchar, and Michael Bloomberg — have not gone that far, but virtually the entire field has proposed banning new oil and gas drilling leases on federal lands.
A fracking ban and stoppage on public oil and gas leases would also harm U.S. energy security, API warns, resulting in the United States firmly establishing itself as a net energy importer. The U.S. is the world’s top producer of oil and gas thanks to the fracking boom and is expected to export more energy than it imports by 2020 for the first time since the 1950s, the Energy Information Administration projected.
Under the fracking and federal leasing bans, the U.S. would import 21% of its total energy by 2030. It would import more than 40% of its oil and petroleum products by that year, including motor gasoline and jet fuel, and nearly 30% of its natural gas. In September 2019, the U.S. became a net petroleum exporter for the first time since records began in 1973, although the country remains a net importer of crude oil.
Banning fracking would also have a questionable effect on reducing emissions, experts have previously told the Washington Examiner.
In the near term, the use of coal, which emits about double the carbon of gas, might increase to offset the loss of electricity from natural gas plants.
That could increase emissions overall, even if a fracking ban lowered emissions of methane, the potent greenhouse gas that is the main component of natural gas, and raised the price of oil.
It’s also challenging to replace gas use from buildings and in the manufacturing sector immediately, so that would likely require importing more fossil fuels.
Sommers, API’s CEO, acknowledged the long shot prospects that a fracking ban would become reality soon, given it would require Congress to act and the Senate is controlled by Republicans. Presidents, however, have broader authority to impose federal oil and gas leasing restrictions. He said the industry was taking nothing for granted.
“Just because the Congress as situated today would not impose a fracking ban does not mean a Congress situated after 2020 would not impose a fracking ban,” Sommers said. “We have to guard against and pendulum-proof against whatever political environment we may find ourselves in.”
