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U.S. Chamber Report: Fracking Ban Would Destroy Almost 15 Million Jobs, Double Energy Costs

This week, the United States Chamber of Commerce released the fourth installment in its Institute for 21st Century Energy’s Energy Accountability Series, which looked at what would happen if fracking were to be banned nationally. Let’s just say the results aren’t pretty. According to the Chamber, some of the major impacts include:

  • Roughly 14.8 million jobs would be lost across the country.
  • Gasoline prices would nearly double.
  • Electricity costs would nearly double.
  • The price of natural gas would skyrocket to 2008-like figures of $12 per BTU.
  • The United States GDP would be reduced by $1.6 trillion.

What’s more is the report found that should fracking be banned in 2017, by 2022 faced with higher gasoline, electricity and natural gas prices, the average American household would be burdened with finding $4000 extra a year for cost-of-living expenses.

Christopher Guith, Senior Vice President of Policy, U.S. Chamber of Commerce’s Institute for 21st Century Energy said in a media call on Friday,

“The marriage of hydraulic fracturing with directional drilling has really reshaped the American economy, and quite frankly our daily lives.”

Therefore, a ban on fracking would impact every American – and, of course, states that are most benefiting from shale development now would be the hardest hit. The report looked at the potential impacts in four key oil and gas states: Ohio, Pennsylvania, Texas and Colorado.

Ohio

Ohio is one state that has particularly benefited from the development of oil and natural gas within its borders. As Zachary Frymier, Director of Energy & Environment for the Ohio Chamber of Commerce said on Friday’s call,

“Energy prices are so important to Ohio businesses that availability of cost effective, reliable sources of energy really allowed Ohio to morph into an industrial powerhouse. As we look to transform our economy and kick off a renaissance in industry, natural gas will continue to be key to our efforts. The direct extraction of gas is important, but I think as we touched upon already in this call, the benefits run far beyond and really touch every aspect of our economy here in Ohio.”

This is especially clear with the resurgence of the manufacturing industry taking place in Ohio’s former Rust Belt. As Shawn Bennett, Executive Vice President for the Ohio Oil and Gas Association, stated on the call,

“At the end of the day, this is resulting in more money in a family’s monthly budget and a rebirth in manufacturing opportunities up and down the Ohio River Valley. Shale development isn’t only about energy, but giving families essentially a new hope of having well-paying jobs in areas where they were raised.”

One group that has seen a tremendous surge in job-related opportunities is Ohio’s labor unions. As Bennett noted on the call,

100 percent of the natural gas fired power plants in the state of Ohio are being built with union labor.  So that is about roughly over a thousand union jobs that have been created to build those natural gas fired power plants.  There have also been about $8 billion spent in pipelines here in Ohio and about 75, at least 70 percent, of those jobs are union jobs.  Then you go into the building of the natural gas processing plant, they’re using union labor.  When we’re going out and clearing the site as in the industry we’re using operating engineers and so forth.  So there is a great partnership there and again, those opportunities aren’t out there, those union halls wouldn’t have such a high membership right now because there wouldn’t be enough work.”

And Bill Siderewicz, President of Clean Energy Future LLC, also said in response to the report,

“The Lordstown Energy Center is under construction because of fracking. Without the development of shale, 750 union workers building this plant would have not been a reality. To date, $4.5 Billion have been invested in Ohio in modern natural gas fired power plants that have brought 5,000MW of electricity with another 5,000MW under development. We need access to low-cost natural gas to continue to make these kinds of investments, create thousands of jobs and more importantly continue to provide consumer choice for low-cost electricity.”

At the same time, as all of the benefits have been occurring, activists groups funded by national and international interest groups have inundated Ohioans with attempts at fracking bans posed through local ballot initiatives. Despite 83 percent of anti-fracking ballot measures in Ohio having failed or been ruled invalid by various courts, the Community Environmental Legal Defense Fund (CELDF) continues to push these initiatives. In fact, next week the voters of Youngstown who have said no to a ban on five separate occasions will get their chance to vote for a sixth time, adding to the $80,000 bill these taxpayers have already paid.  Residents in Waterville will also be paying to vote on a ballot initiative—despite having no oil and gas development.

Were these initiatives to be successful on a national level, the U.S. Chamber report found that Ohioans would be faced with,

  • 397,000 jobs—predominantly union—lost,
  • a $33 billion hit to the state’s annual GDP,
  • and an average increased cost to Ohio households of $3,956

A national ban would mean a return to the Rust Belt, less money circulating in schools and communities, and a significant increase in the financial burden of Ohioans without the job opportunities available to meet these new financial demands. As Bennett explained on the call, the shale revolution is about more than just providing jobs for Ohioans, but also about protecting Ohio families from higher costs.

Pennsylvania

As the 2nd largest producer of natural gas in the country, it is no secret that the Marcellus Shale has benefited the entire state. As David J. Spiegelmyer, President of the Marcellus Shale Coalition, explained on Friday’s call,

“Shale has been a tremendous, transformative force in our manufacturing base, which has been on decline for far too long, ensuring that hardworking American families have more take-home pay as a result of more affordable energy supplies.”

“Thanks to America’s natural gas revolution, we are now witnessing a manufacturing rebirth in our region that almost no one predicted just a few short years ago. “

Gene Barr, President and CEO of the Pennsylvania Chamber of Business and Industry, said on the call,

While we understand there are people who are concerned, trying to keep this in the ground would be tremendously detrimental, as you point out, to Pennsylvania. In fact, during the Great Recession, the growth of the industry was the only job creator, virtually the only job creator, in this Commonwealth during that time. If we leave this in the ground, Christopher, you’ve talked about the impact tin terms of dollars, in terms of jobs, but we know what it would do in terms of the impacts on business as well as individuals.“

So what would happen if a ban were enacted at a national level? Pennsylvanians would witness,

  • 466,000 jobs lost,
  • a $45 billion hit to the state’s annual GDP,
  • and an average increased cost to Pennsylvania households of $3,537

And that doesn’t even take into account the community spending on hospitals and other charities that residents will see disappear.

Texas

Texas not only has a long history of developing America’s oil and gas – it’s also the nation’s biggest producer of each. Yet, even Texas has seen ban attempts led by national interest groups in the form of setbacks or outright bans. In Denton the ban ended up being one of the most costly to taxpayers anywhere in the country. Last year, the state government passed HB 40 that reaffirms the state’s role in regulating oil and gas, and essentially nullifies local bans on the process. But what would happen to Texans if a national one came to be? There would be,

  • 1.5 million jobs lost,
  • a $196 billion hit to the state’s annual GDP,
  • and an average increased cost to Texas households of $4,632

In other words, a national ban on fracking would decimate Texas’ economy.

Colorado

Colorado has also been assailed time and again by ban fracking initiatives that resulted in the state Supreme Court ruling that such bans are “invalid and unenforceable.” What would Coloradoans be up against if a national ban was enacted, though? There would be,

  • 215,000 jobs lost,
  • a $26 billion hit to the state’s annual GDP,
  • and an average increased cost to Texas households of $3,486

Needless to say, this would place an incredible burden on all Coloradoans.

Could a national fracking ban really happen?

Fringe groups in the Keep It In The Ground movement – Food and Water Watch, 350.org, Earthworks and others have received major funding from international and national interest groups and foundations—are dead-set on the goal of achieving not only state bans on fracking, but an overall national ban. While only one candidate for president, Bernie Sanders, came out calling for an all-out ban – and while many prominent Democrats oppose such an approach – there are members of Congress who are for a national fracking ban. The report highlights a few of these, such as,

  • Rep. Jared Huffman (D-Calif.); Feb. 11, 2016: “There is an urgent need to keep fossil fuels in the ground if we want to protect the planet for future generations.
  • Rep. Mark Pocan (D-Wisc.); April 22, 2015: “Until we fully understand the effects [of fracking], the only way to avoid these risks is to halt fracking entirely.”
  • U.S. Sen. Jeff Merkley (D-Ore.); Nov. 4, 2015: “We must keep our United States fossil fuel reserves, owned by the citizens, in the ground.”

Additionally, as mentioned on the U.S. Chamber’s media call Friday, many of these organizations have set their sights on pipelines, after failed ban attempts. As Gene Barr noted:

We have a group of people…who were unsuccessful in banning fracking in this Commonwealth. They were successful in banning it in New York…But those people were unsuccessful in banning fracking in this Commonwealth, and they have now shifted to ban and to work against any pipelines regardless. So yeah, we are seeing obstructionists with in many, many cases, little evidence, if any, behind them. It is something, and it’s why when we talk about developing this industry, infrastructure is just as important as anything else at this point.”

 David Spiegelmyer clarified the importance of infrastructure as well, explaining:

“Few realize that the major consuming areas in the Northeast—beginning in Washington to Baltimore to Philadelphia to New York up into New England—have been historically completely dependent on Gulf Coast supplies of natural gas and propane. As a result, with capacity constraints, there are deeply volatile prices in the winter months that have impacted consumers throughout that region. The fact that we have this abundant and affordable energy resource within 100 or 200 miles of many of those consuming regions, the infrastructure is the vital link to avoid some of those volatility swings that we see because of the infrastructure not from the commodity. It’s absolutely critical for consumers to benefit from this, that pipelines are that link.”

The American public needs to take a good hard look at what a ban on fracking – real or de facto – would mean for families. As this latest report from the U.S. Chamber shows, the reality is far from pretty.

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