Sanders-Proposed Fracking Ban Could Scupper US Economic ‘Miracle:’ Experts

Ban on fracking could eliminate U.S. energy independence
By Alan McDonnell
Alan McDonnell
Alan McDonnell
February 7, 2020Updated: February 8, 2020

Democratic senator and presidential hopeful Bernie Sanders (D-Vt.) introduced his “Fracking Ban Act” to the U.S. Congress on January 28th, which if approved would ban hydraulic fracturing across the United States by 2025. The bill was authored by Sanders and one of his most high-profile supporters in the Democratic primaries, Rep. Alexandria Ocasio-Cortez (D-N.Y.). The bill would ban fracking near homes and schools by 2021 and then, “starting in 2025, it would ban fracking nationwide.”

The hydraulic fracturing (or ‘fracking’) process, however, has played a huge role in the United States’ transition to energy independence. The ‘shale revolution’ meant that horizontal drilling techniques coupled with high-pressure rock-fracturing methods made previously inaccessible ‘tight’ oil and gas extractable. In his State of the Union Address on February 5, President Donald Trump said that “We have unleashed a revolution in American energy.  The United States is now the number-one producer of oil and natural gas anywhere in the world.”

Speaking on the shale revolution in November, Federal Reserve Chairman Jerome Powell said that “The energy independence of the United States … people have been talking about it for 50 years, and I never thought it would happen, and here it is. It’s in the nature of a miracle, it seems to me. So it’s a great thing, I would say. That’s not to say there aren’t issues to manage … but I think it’s been a great thing for the country. I think to shut down the shale industry, yeah, that would probably not be a good thing for the economy.”

Effects of a Fracking Ban on the Economy

According to independent energy research consultancy Rystad Energy, the United States holds over 264 billion barrels of recoverable oil—more than either Russia or Saudi Arabia. Furthermore, up to 50 percent of American oil reserves are ‘unconventional’, meaning that they could only be extracted by fracking. Research (pdf) from the Energy Policy Institute at the University of Chicago shows that recovering such oil and natural gas reserves through fracking boosts local economies via increased income (by around 7 percent), employment (by 10 percent) and housing prices (6 percent). Furthermore, the increases are found to outweigh the costs associated with fracking activity, such as increased truck costs, noise, and air pollution, and “marginally increased” rates of crime. According to study co-author Prof. Chris Knittel, “This study makes it clear that on net there are benefits to local economies—which we believe is useful information for leaders in the United States and abroad who are deciding whether to allow fracking in their communities.”

American Petroleum Institute (API) Director of Communications Ben Marter said that “U.S. leaders should empower U.S. energy leadership, but restrictive energy policies like a ban on fracking would threaten America’s energy security, surrender control of America’s energy future, and retreat from America’s energy leadership.” The API stresses that for more than half a century, U.S. presidents—both Democrats and Republicans—have called for an end to America’s reliance on foreign energy. Furthermore, for the United States to lead the world in natural gas and oil production delivers tremendous benefits to consumers while reducing emissions and unlocking a new era of U.S. energy leadership.

Steve Gorem, a policy adviser at The Heartland Institute, said that the shale revolution and ramping U.S. oil production brings a new level of stability to the U.S. and world economic systems. He outlined how oil price increases during the 1973 crisis spurred the 1973-1975 recession. He contrasted this with the situation today, where “On September 14 of last year, 25 drones and missiles exploded at two oil processing facilities of Saudi Arabia. More than 5.7 million barrels of Saudi production capacity was taken offline, more than half of Saudi output. But oil prices hardly budged. On January 8 of this year, Iran fired more than a dozen missiles at two Iraq facilities housing U.S. military personnel. Yet, world oil prices today remain at low levels, just above $50 per barrel. The missile attacks on Saudi Arabia and Iraq in previous decades would likely have triggered large oil price spikes.”

Green New Deal

The Bill is in line with the Green New Deal proposal Sanders says he will implement if elected president. The Green New Deal plans to “Transform our energy system away from fossil fuels to 100 percent energy efficiency and sustainable energy by 2030 at the latest” and to “end greed in our energy system” through public ownership of renewable energy. The Deal would also fully electrify and decarbonize the transportation system, including the shipping and aviation industries. The fossil fuel industry would be prosecuted and sued “for the damage it has caused,” offshore drilling would be banned and fossil fuel resources on public lands would be kept in the ground. All new federal fossil fuel permits would be terminated. Both imports and exports of fossil fuel would be banned, while the Deal states that “Fracking and mountaintop removal coal mining are two particularly harmful methods used to extract fossil fuels. They make surrounding communities less healthy and less safe. They must be immediately banned.”

Initial Bans From 2021

The Act states that “The Ban Fracking Act would institute an immediate federal ban on all new federal permits for fracking-related infrastructure and a ban on fracking within 2,500 feet of homes and schools by 2021. Then, starting in 2025, it would ban fracking nationwide.” However, the legislation also insists on a just transition for employees in the fracking industry. The bill directs the Department of Labor to partner with other federal agencies and stakeholders to develop a plan to prioritize “the placement of fossil fuel workers into good-paying jobs in the communities in which they live as the United States moves quickly to an energy system based on sustainable energy and energy efficiency.”

The bill focuses on what it says are the dangers of fracking to public health, workers and communities, and especially to averting climate change. “We must realize that workers in the fracking fields are not the enemy, coal miners are not the enemy, and oil rig workers are not the enemy. Climate change is the enemy,” said Sanders. “Fracking is a danger to our water supply. It’s a danger to the air we breathe, it has resulted in more earthquakes, and it’s highly explosive. To top it all off, it’s contributing to climate change. If we are serious about clean air and drinking water, if we are serious about combating climate change, the only safe and sane way to move forward is to ban fracking nationwide.”

Sanders’ bid to ban fracking echoes that of his Democratic Party running-mate, Elizabeth Warren, who has promised to ban fracking on her first day in the job if she is elected president in 2020.

The Sanders Bill claims that fracking results in the leakage of methane, a greenhouse gas. Furthermore, it states that natural gas is not a bridge gas on the way to a decarbonized economy. “Renewable energy and storage eliminate any need for fracked gas,” it says, while “all the technologies needed to support a transition to 100 percent renewable electricity exist at commercial scale and equal or cheaper costs compared to fossil fuels.” Sanders believes that low-income communities, communities of color, indigenous communities, and other “environmental justice communities” in the United States are disproportionately exposed to pollution from hydraulic fracturing, and that “hydraulic fracturing is not in the national interest of the United States.”

However, it seems certain that any bill aimed at a ban on fracking would need to pass congress, and could even be subject to legal challenges. According to Standard & Poors, “The bill appears unlikely to become law and would be subject to years of legal challenges if it ever did, but its introduction marks perhaps the most extensive legislative proposal to hamper domestic oil and natural gas growth.”

A statement from Bernie Sanders said the bill has been endorsed by a number of environmental organizations such as the Sierra Club, Greenpeace USA, and Friends of the Earth, as well as Hollywood personalities such as film-maker and activist Josh Fox and actor Mark Ruffalo.

However, analysts at Rystad Energy believe a federal ban on fracking would have a relatively minor effect on oil and gas production. “Recent analysis conducted by Rystad Energy suggests that if the fracking activity were to be eliminated on federal acreage—in accordance with a stated policy goal of at least one presidential candidate—the result would be a widespread shift of capital from federal to private and state-owned acreage in a bid to replace the lost oil volumes. In other words, a potential fracking ban would likely have a little immediate impact on nationwide oil and gas production figures.”