So…You Want to Ban Fracking? Better Think Twice

It seems each year we come closer and closer to a ban on hydraulic fracturing. For the first time ever, we have a Presidential candidate who declared “No question, I am in favor of a national ban on fracking”. She has since backtracked on this issue, but her track record says otherwise. She was, after all, a co-sponsor of the Green New Deal along with her comrade Alexandria Ocasio Cortez. While environmentalists surely are overjoyed at the possibility, there is a heck of a lot more to consider than just the environment. I am not discounting its importance. Rather, I am seeking to balance it against the national security, the economy, employment, food costs and other necessities.

Perhaps one day we will have the leisure of all driving electric vehicles (or a more practical but equally environmentally friendly substitute) and having our other energy needs met via solar, wind, or other power sources. However, the technology to make this possible won’t be available for years, likely decades, and seeking to cut off our nose to save our face is not a particularly good decision. Instead, let’s accept that, while we continue our best efforts to wean ourselves from fossil fuels, that it is simply not a decision that can be made at present, based upon our needs and the available options.

This article will attempt to discuss the impacts that hydraulic fracturing has on the economy, on national security, and on our way and fashion of life. Ironically, it is a proven fact that fracking has likely done more to slow climate change in the last decade than any other one singular thing. Let us begin our discussion there – how fracking has been a friend to our environment, while hiding in plain sight.

The US had a limited supply of natural gas in the 1990’s and was dependent almost totally upon coal-fired power plants. We, as a county, consumed almost a billion metric tons of coal in 2010 alone, but since then the bounty of natural gas and associated fossil fuels has allowed us to replace coal by means of trillions of cubic feet of natural gas for energy generation. Coal consumption dropped by more than half in just three short years. There is no doubt that this is single-handedly attributable to hydraulic fracturing and horizontal drilling. Coal is on its way out, and fast, replaced with, almost without exception, clean-burning and affordable natural gas.

By displacing coal, fracked natural gas helped cut our carbon emissions to 5 billion tons last year, down significantly from the 6.1 billion just six short years ago. These are figures provided by the Environmental Protection Agency, who surely have no legion to the industry. Banning fracking would almost assuredly require the reopening of coal-fired plants for our electrical needs. Surely no one, other than those owning huge coal reserves, wants that. Further, advancements in fracking are revolutionizing the extraction of geological hydrogen, which may well be the most prominent source of consistent clean electricity today and in the near future. Banning what is essentially technological innovation is not the answer to any of our present energy problems, or any of our other problems, for that matter.

Environmentalists need to accept the fact that fracking is a friend, not an enemy, toward our goals of low-emission energy. At present, natural gas is our savior. It may soon be replaced, or more likely supplemented by use of hydrogen or other sources, known or unknown. A world short on natural gas available for electricity generation would be a huge step backwards. The US Energy Information Administration (EIA) concluded in a 2020 report that “US electric power sector emissions have fallen 33 percent from their peak in 2007 because less electricity has been generated from coal and more electricity has been generated from non-carbon sources, primarily natural gas”. We all want to implement wind and solar into our energy grid, and natural gas is the single most important enabler in making this become reality.

We have, as a country, made significant progress in cutting emissions from our electrical generation facilities, with reductions of 30 percent, 76 percent and 91 percent respectively for carbon dioxide, nitrogen oxides, and sulfur dioxide between the 2005 to 2019 time period. Contrast this with the consequences of a fracking ban, which would see the country have a year-over-year increase in each of these three greenhouse gases, with emissions rising 16 percent, 17 percent and 62 percent respectively. Again, these figures are from government entities and are not propaganda being pushed by the energy industry.

America’s energy leadership is a direct result of the employment of technological innovation, primarily horizontal drilling and hydraulic fracturing, that, we have used safely, responsibly, and efficiently, allowing us to become largely energy independent. Seventy five percent of all domestic natural gas and sixty three percent of the domestic crude oil produced in 2019 relied on this combination of techniques. It has surely grown exponentially since then, making America today’s largest energy producer. It would grow even more, and faster, if the government would back off the LNG sector, and stop hindering E&P companies from finally showing some profit off natural gas by exporting it, primarily to European nations which currently rely on Russia for such sources.

A fracking ban would, from a national security and foreign policy perspective, significantly curtail US natural gas production and increase global energy dependence on both Russia and OPEC, a double-edged sword which we do not wish to cross. Currently, we export natural gas (primarily via LNG) to 39 countries on five different continents. A decrease in LNG or crude oil exports would weaken our geopolitical standing globally and take away an important diplomatic tool.

Further, given the interconnectedness of the global economy, increased energy cost would reverberate around the world, affecting both economic growth and the outlook from Europe to Asia. Our economy would be weakened, and we would experience a national security setback by becoming, once again, reliant on other nations for our energy needs. All this from a (DOE) Department of Energy’s report delivered recently to the President. Perhaps Kamala Harris was not copied on this correspondence.

This same report, entitled “Economic and National Security Impacts Under a Hydraulic Fracturing Ban” purported that such a ban would have far-reaching consequences including the loss of millions of American jobs, price hikes at the gas pumps, and higher electricity costs for all Americans. Also, our trade deficit would increase dramatically, with the industry having contributed $9.5 billion in revenue in 2019 alone. Surely it has grown substantially from that in the past five years.

The increased production of domestic oi and natural gas in America has caused significant downward pressure on consumer prices for these necessary commodities. Om 2019 both diesel and gasoline prices had been lowered by approximately 40 percent, compared to 2012, while the average end-user price for natural gas fell almost 25 percent over the same period.

Most Americans have at least some understanding of supply and demand and know that a decrease in fossil-fuel production would have an accordingly negative effect on prices for both vehicle fuel and that used to heat and cool our houses.

These figures are from the most recent available governmental sources but would surely be commiserate to any five-year period in the present or near future.  Predictions that consumers could expect retail electricity costs to increase by almost a half a trillion dollars between 2021 and 2025 alone have proven to be accurate. The outlook for retail natural gas also increasing by a similar amount over the same five-year time period has been proven as well.

Regarding gasoline and/or diesel costs, the study estimated that, under a fracking ban, annual average gasoline prices would increase over 100%, estimated to be as high as $4.20 per gallon in 2022 and 2023. Diesel was also forecast to likewise be affected, rising to as much as $4.56 per gallon. Together, this created about $1.9 trillion in additional cumulative costs spread across all sectors, bad news for each and every American citizen.

And, what is the result of higher gasoline or diesel costs? Higher transportation costs – something that each industry ultimately passes on to the American consumer. Almost anything you can think of is transported by means of gasoline, diesel, or natural gas fueled vehicles. The resulting inflation would be catastrophic for the economy, with rising fuel costs resulting in higher food costs, among other things. We already have an alarming increase in grocery costs under the present administration; we certainly don’t need to make it any worse. Ultimately, soaring food costs on a global scale could actually lead to starvation or other economic-related maladies.

Banning fracking would absolutely raise consumer energy prices and the cost of all good associated therewith. A recent study showed fracking to have saved American consumers over $200 billion each year through lower energy prices. How does this impact a typical family of four? Try the equivalent of $2500 each year, a figure certainly noticeable to the average American family. The cheap and abundant energy created via fracking has actually been recognized as saving 11,000 lives each winter in the US alone. Globally, especially in Europe, The Economist estimates that as many as 68,000 people or more would have perished due to high energy costs. Now we are talking about very real consequences.

The broad economic impact of a fracking ban would be considerable. Compared to a world with hydraulic fracturing, in 2025, the US economy would have 7.7 fewer jobs. $1.1 trillion less in GDP and almost a trillion dollars less in labor income. Further a fracking ban would result in increases in almost all energy costs, and would burden not only American families but small businesses, hospitals, and manufacturers as well. Indeed, almost all other sectors of the economy would inevitably be stunted as we continue to emerge from a post-pandemic economic recovery.

What effect would a fracking ban have on employment here in the US? Well, a recent study showed that fracking creates jobs not only in the exploration process, but in related industries like refineries, cracker plants, pipelines, and transportation hubs. For example, every $1 million spent on gas production created 2.35 local jobs. With each well costing close to $10 million each, at a minimum (depending on depth, length of laterals, etc.) that number becomes significant.

A 2015 study from Harvard Business School/Boston Consulting Group analysts estimates that fracking created almost 3 million US jobs in the first decade of its deployment. A 2013 study by the US Chamber of Commerce predicted fracking to create more than three and a half million jobs by 2035. A separate 2017 American Petroleum Institute (API) study reported than the industry supports almost ten and a half million American jobs – a 500,000 increase since 2011- and projects the industry will support another nearly 2 million jobs by 2035. And these are good jobs too, averaging nearly $78.000 per year. And the savings afforded by fracking affect Americans not directly in the industry by lowering costs of domestic good and increasing average household income by about six percent.

While the transition to a renewable resource-based economy has begun, it will be a long transition. Our planet will continue to get warmer, our ecosystems will continue to degrade, and existing problems may indeed, in the short term, get worse rather than better. Our best plan to combat and to speed up the transition away from fossil fuels is by focusing on the operational tasks, financial resources and organizational capacity need to expedite the change. Truth is, the US has prospered from cheap fossil fuels for so long that we have not invested appropriately in cleaner and more efficient technologies. We need a new, innovative energy policy, but not the proposals getting most of the attentions nowadays. A fracking ban is certainly not the solution.

We need to rely upon the abundant oil and natural gas reserves that we have as a strategic asset to drive sustained, long-term economic growth, achieve environmental goals, and sustain national security interests. To this extent, shale exploration, and fracking in general, is closer to the answer than the problem. The consequences of a fracking ban are just too consequential to ignore.

So, do you still support a fracking ban? Are you willing to let your impatience cause a multitude of irreversible and quite consequential negative effects across our society, and, in fact, the world? Truth is, we are in a generation -long transition from fossil fuels to renewable energy. The idea that renewable energy technology exists which can immediately replace fossil fuels is ludicrous. If the technology were available, we would already be using it. It is not politics that prevents the transition, but rather the time and investment necessary to complete a technological and economic transition. This process will take many years to complete - until then, be patient, strive for the best solutions readily available and do not go into panic mode with nonsensical ideas like a fracking ban. Our country, our economy and indeed, our world, cannot afford the consequences of such.