Fracking Ban Would Cost American Families More Than $5,000 a Year, Report Shows
A ban on hydraulic fracturing – as proposed by some politicians and pushed by “Keep-It-In-The-Ground” activists – would have devastating consequences for families, according to a new report from the American Petroleum Institute. Today’s report notes that a fracking ban would result in a loss of 7.5 million jobs and cost each American family an average of $5,040 annually. It would also create a cumulative GDP loss of $7.1 trillion by 2030 and increase energy prices by $618 on average.
The United States has become the world’s No. 1 oil and natural gas producer thanks to fracking, which accounts for more than 95 percent of all U.S. natural gas and oil wells. The growth has been so impressive that the world saw 1 billion barrels of American-produced oil in fiscal year 2019 alone. These production levels are a shocking contrast to just a decade ago, when oil prices hit $133 a barrel and the U.S. imported 57 percent of its oil products.
However, the United States would inevitably return to the sluggish growth of the mid 2000’s should a ban take effect. According to API’s modeling:
Banning hydraulic fracturing and federal leasing could trigger a U.S. recession – marked by declining economic output as measured by Gross Domestic Product (GDP)… There are job losses and increased energy costs across all economic sectors, potentially increasing prices for goods and services. Annual household incomes decline more than $5,000 per year.
Higher Costs for Families and Farmers
In addition to a widespread recession and lower incomes, Americans would need to pay astronomically more to power and heat their homes if a ban on fracking were to come into play. The study found that the average U.S. family is projected to spend 58 percent more on natural gas, 20 percent more on electricity (which more and more is generated by clean natural gas), and 15 percent more on heating each year if energy producers were unable to continue developing new assets within the United States.
Similarly, a ban on fracking would drastically increase costs for American farmers, since direct and indirect energy costs can account for 36 to 48 percent of total production costs for many crops. As a result, the report found that cumulative farm income would decline by more than $275 billion, while wheat, corn, and soybean farming costs would increase by 43, 54, and 48 percent respectively. This would result in higher costs at the grocery store and local market for every American family.
The United States has increased its energy independence more than ever thanks to hydraulic fracturing over the past decade but returning to the days of dependence on foreign energy is unavoidable if domestic fracking were to end. According to the report, the United States could expect to shift from a net exporter of natural gas to a net importer and would need to rely on foreign suppliers for more than 40 percent of its oil needs by 2030.
High gas prices, expensive utility bills, low wages, and a sluggish job market were the status quo for American families before the energy revolution. Fracking and horizontal drilling helped the United States escape the throes of economic depression while delivering unprecedented clean-air benefits through the shift to relying on natural gas for power generation. As API illustrates in its report, a ban would make life more expensive for every single American while reversing the environmental and economic benefits we’ve come to expect after the shale revolution.