A nationwide US ban on hydraulic fracturing would have a devastating effect on the natural gas industry and the country's economy as a whole, causing prices to spike to $12/MMBtu and resulting in the loss of 14.8 million US jobs by 2022, according to a report released Friday by an arm of the US Chamber of Commerce.
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The report, released by the chamber's Institute for 21st Century Energy less than a week before the US presidential election, examines the impacts that a fracking ban, advocated by some environmental groups and some political candidates, would have on the US economy and on the energy-producing states of Pennsylvania, Ohio, Colorado and Texas.
"This isn't just about the upstream, the men and women on the drill face. This is about the entire macro effect," Christopher Guith, the institute's senior vice president of policy, said during a conference call with reporters to discuss the study Friday.
The report examined the potential economic impacts that would ensue if a fracking ban were imposed in 2017, both short-term and over a five-year period.
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"If we ban fracking, which accounts for two-thirds of all the gas pulled out of the ground and north of one half of oil, that's a huge chunk of production that goes away and that means that prices go up really quick," Guith said.
In addition to gas prices soaring back to the double-digit levels not seen since the early 2000s before the onset of the shale revolution, the price of gasoline and electricity would almost double by 2022, he said.
"We're on the verge of seeing the first year-on-year decrease in electricity prices. We would flip that on its head," Guith said.
Guith and other speakers on the call blamed environmental activists advocating a "keep it in the ground" public policy agenda, and political candidates seeking the environmentalists' support, for threatening the future viability of fracking, which the study identifies as the engine of a US manufacturing renaissance in recent years.
A fracking ban "would be tremendously detrimental to Pennsylvania," said Gene Barr, CEO of the Pennsylvania Chamber of Business and Industry.
"During the Great Recession, the growth of this industry was virtually the only job creator in the Commonwealth in that time," Barr said.
Zachary Frymier, director of energy and environment at the Ohio Chamber of Commerce, echoed the call for support for the buildout of energy infrastructure in the region.
"The direct extraction of the gas is important, but benefits run beyond that and touch every aspect of our economy in Ohio. Infrastructure such as pipelines is the key to getting these products to market," he said.
Shawn Bennett, executive vice president of the Ohio Oil and Gas Association, said a statewide or national fracking ban would cripple a burgeoning petrochemical industry that in recent years has grown up in the state, taking advantage of liquids production from the Utica Shale play.
"The shale petrochem complex along the Ohio River is a perfect example of what's happening," he said. "If we were to ban hydraulic fracturing in Ohio, we would not only face the decimation of our new manufacturing opportunities, but also see natural gas prices skyrocket and the cost of gasoline doubling, causing the cost to live in Ohio to increase by $4,000 per year."
Ohio has two anti-fracking initiatives on the ballot on Tuesday, one in Youngstown, where voters have rejected similar measures in five previous elections, and one in the town of Waterville, in the northwestern corner of the state near Toledo, an area that has seen little or no oil and gas development.
The study found that Texas would be the biggest loser in the event of a nationwide fracking ban.
By 2022, Texas could lose 1.5 million jobs and $196 billion in annual gross domestic (GDP) and the average Texas household could see costs rise more than $4,632 per year, according to the report.
Over the same period, the report states that Pennsylvania could lose 466,000 jobs and $45 billion in annual GDP. The cost increase for the average Pennsylvania household was estimated to be more than $3,500 per year.
Under a fracking ban, Ohio could lose 397,000 jobs, the report states. "$33 billion in state GDP in Ohio would be lost, with the majority of those losses attributed to the higher costs for energy that Ohio businesses would be forced to pay," the report states.
The study estimates that a fracking ban would result in the total loss of 215,000 jobs in Colorado. "Banning hydraulic fracturing would deprive Colorado's economy of $26 billion in state GDP by 2022, with half of that total coming directly from the upstream oil and gas segment itself," the report states.
--Jim Magill, firstname.lastname@example.org
--Edited by Keiron Greenhalgh, email@example.com