Fracking Fuels Sunshine State’s Tourism Industry
Florida anti-fracking activists repeatedly claim hydraulic fracturing (“fracking”) would be detrimental to the Sunshine State’s thriving tourism industry. But their hand-wringing is unfounded. One need only look at America’s top oil and gas producing states to see that business is booming — in California and other states where fracking is taking place — for both the energy and tourism industries.
And while fracking isn’t currently being used in Florida, conventional oil development has taken place alongside Florida’s tourism industry without adverse impacts for more than 70 years. In fact, both industries are critical to Florida’s diverse economy, providing Floridians with billions of dollars in revenue and hundreds of thousands of jobs.
Florida’s tourism industry has also benefited from the use of fracking elsewhere throughout the United States. For example, the recent trend of low gasoline prices — perhaps the most significant contributor to Florida’s thriving tourism sector — can be traced to increased U.S. oil production, much of which is a direct result of fracking. Many people may not realize that crude oil prices are the largest factor in the price of a gallon of gasoline, as the following graphic from the Energy Information Administration (EIA) shows:
And thanks to U.S. oil producers unlocking prolific shale oil resources across the country, in part through the use of fracking, Americans are enjoying some of the lowest gasoline prices in years. As the Sun Sentinel reported following Memorial Day,
“The U.S. Energy Information Administration projects that U.S. gas prices will average $2.40 through the summer. With Florida’s average price currently 6 cents less than the national average, that should keep the average price in Florida at $2.34, barring unexpected pressure on supplies from a hurricane or refinery outage, AAA said.” (emphasis added)
Lower prices at the pump mean more people from around the country have the means to travel this summer to popular tourist destinations like Florida. The positive effect low gasoline prices have on tourism is a trend that has been occurring for some time in Florida, as Tuscaloosa News reported in 2016,
“The conditions are right for a perfect storm of tourism this summer.
“‘Gas prices are low, and employment is picking up,’” said Rick Harper, an economics professor with the University of West Florida in Pensacola. ‘It’s going to be the best summer for tourism that Northwest Florida has ever had.’”
“Harper said low gas prices throughout the year means many families have more expendable income, making them more inclined to travel this summer.”
“‘When gas prices are low, it puts more take-home pay in people’s pocket,’ Harper said. Families can put that toward vacation.’” (emphasis added)
Florida Petroleum Council director David Mica also noted how much Florida’s tourism is impacted by low gas prices as a result of fracking in a recent opinion piece to the Orlando Sentinel:
“Many Floridians do not realize that, as those energy prices were climbing toward $4 per gallon, Florida tourism growth was subsequently slowing down. After the hydraulic fracturing revolution led to increased supplies and lower prices, Florida’s tourism soon reached record levels — a correlation that can be easily drawn.” (emphasis added)
That’s also something the Brevard Times recently reported on,
“Lower gas prices have fueled record-breaking domestic travel to Florida. VISIT FLORIDA estimates that a record 27.1 million domestic visitors traveled to Florida in Q1 2017, reflecting a 3.2 percent increase over the same period last year.” (emphasis added)
Still, the positive impacts of fracking may not be as clear in a state such as Florida where the practice is not currently happening. So let’s take a look at a comparable state where fracking and tourism happily co-exist.
From 2010–2015 in California,
- Oil production increased 5 percent
- Visitor spending increased 21 percent
California currently ranks fourth in the country for oil production, and according to Business Insider is the most popular U.S. state for tourists, topping even Florida.
California’s petroleum industry is responsible for 1.7 million jobs with an associated $111 billion in labor income in the Golden State, and contributes roughly $26.4 billion in annual state and local tax revenues and $28.5 billion in sales and excise taxes. In fact, a study this month from the Los Angeles County Economic Development Corporation (LAEDC) found that the petroleum industry’s $148 billion contribution to California’s economy represents 8.4 percent of the state GDP. While fracking has only occurred in Kern County, conventional oil development takes places in various places across the state, and the industry has flourished without impacting groundwater, causing earthquakes, or hurting the tourism industry.
Likewise, California’s tourism industry, of course, is huge. It supported over one million jobs in 2016, equating to $45.4 billion in labor earnings. Visitors to the state spent $126.3 billion in 2016 alone, generating $4.9 billion in local taxes and $5.3 billion in state taxes.
But California is not the only state where tourism has flourished alongside energy development. In fact, as EID’s latest infographic shows, the country’s top oil and natural gas producing states have all seen increased tourism while experiencing record-breaking production.
The bottom line is that tourism does not appear to be negatively impacted by the presence of oil and gas development. Indeed, in the places where American workers are fracking their way to affordable energy, lower greenhouse gas emissions and better public health outcomes, the tourism industry is thriving. And with lower gasoline prices and higher incomes as a result of shale production using fracking, more and more people are able to visit tourism hot-spots like Florida this year.