Over the past decade, the shale revolution has transformed the economy and reduced emissions. Now, a new study from the U.S. Chamber’s Global Energy Institute quantifies just how much Texas stands to lose if some candidates succeed in ending it.
The study comes as presidential candidates and activist groups have called for a ban on hydraulic fracturing—the technology that has made this energy revolution possible. Several major candidates have promised to pursue such a ban if elected, and the results would deliver a staggering blow to the economy.
The analysis found that a ban on fracking would eliminate 3.2 million jobs in Texas between 2021-2025, while reducing Texas’ Gross Domestic Product by $1.5 trillion over the same period. The average Texan will see their cost of living increase by $7,280 by 2025, while household income would decrease by $794 billion. With a fracking ban in place, there would be $106.6 billion less in state and local tax revenue.
“Increased oil and gas production driven by hydraulic fracturing has been fueling America’s sustained period of growth over the past decade, while making us both cleaner and stronger,” said Marty Durbin, president of the U.S. Chamber’s Global Energy Institute. “Our study shows that banning fracking would have a catastrophic effect on our economy, inducing the equivalent of a major recession and raising the cost of living for everyone across the country. This bad idea should be abandoned.”
“Texans are rightfully proud of the “father of fracking” George Mitchell, and of the benefits that hydraulic fracturing has brought the globe,” said Jeff Moseley, President of the Texas Association of Business. “As the nation’s leading oil and gas producer, a ban of fracking would hit Texas especially hard—costing us billions of dollars and millions of jobs and jeopardizing promising export projects now underway. This new study should serve as a wake-up call to politicians that are calling for fracking bans to abandon this misguided idea.”
The report is the first in the 2020 edition of GEI’s “Energy Accountability Series,” which takes a substantive look at what could happen if energy proposals from candidates and interest groups were actually adopted. The study is titled “What If Hydraulic Fracturing Was Banned? The Economic Benefits of the Shale Revolution and the Consequences of Ending It.” The 2020 edition updates a study first done in 2016 with new data and analysis, and several new states.
The study uses the well-known and widely used IMPLAN input-output model that tracks monetary transactions within the economy between different industries, the government and households. The report provides national impacts of a fracking ban, as well as state-specific impacts for five energy producing states—Colorado, New Mexico, Ohio, Pennsylvania, and Texas, and two states with limited energy production, Michigan and Wisconsin.
Nationally, the analysis found that a ban on fracking would eliminate 19 million jobs between 2021-2025, while reducing U.S. Gross Domestic Product by $7.1 trillion over the same period. Energy prices would skyrocket, with natural gas prices rising by 324 percent, causing household energy bills to quadruple, and the cost of living to increase by $5,661 for the average American. By 2025, the price of gasoline would double and government revenues would plummet by almost $1.9 trillion.
In addition to the economic boon, the rise of fracking has helped improve the environment. The report notes that U.S. carbon dioxide emissions have been reduced by more than 2.8 billion metric tons since 2005—roughly the equivalent of annual emissions from Australia, Brazil, Canada, France, Germany and the United Kingdom combined.
The complete results of the report, including a detailed explanation of the methodology, are available here.
