A national hydraulic fracturing ban being pushed by Democratic presidential candidates would hit Colorado and New Mexico especially hard, according to a new report released by the Global Energy Institute at the U.S. Chamber of Commerce.
Combined, the two states would lose more than 600,000 jobs and $250 billion in GDP by 2025 from a ban.
Since 2016, the idea of completely banning fracking has moved from a talking point for environmentalist groups to a platform plank for most Democratic candidates, but the study finds that the effects of a fracking ban would be radical—especially for western energy producing states like Colorado and New Mexico.
“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.”
Nationally, banning hydraulic fracturing would more than triple the price of natural gas, cost 19 million jobs, and reduce America’s GDP by $7.1 trillion.
Higher energy prices would also raise prices for consumers, who, the report found, would pay $5,661 more per capita in higher prices for energy and other goods and services.
“Simply put, a ban on fracking in the United States would be catastrophic for our economy,” the report says.
“Lower energy production and higher energy prices affect all households and industries throughout the U.S. economy and lead to lower employment, less gross domestic product, and reduced labor income,” it continued.
The report shows the real world impact a fracking ban like those supported by the Democratic candidates would have.
“Presidential candidates and others who peddle these reckless and backward policies are doing a tremendous disservice to our country,” Dan Haley, president of the Colorado Oil and Gas Association, told Western Wire.
“Voters deserve to hear about how we can all work together to build an energy future that’s safe, clean, reliable and affordable for all of us,” Haley added.
Amy Oliver Cooke, Executive Vice President and Director of the Energy and Environmental Policy Center at the Independence Institute, a free market think tank based in Denver agreed, telling Western Wire that the numbers were “alarming.”
“I cannot imagine any of these Democrat presidential candidates campaigning in Weld County! It’s pretty clear they have little use for the hard-working men and women, the schools, and the communities in Northern Colorado,” she said.
In Colorado, which has the sixth-largest natural gas reserves in the U.S. and the sixth-largest crude production, fracking has helped to make the state a leader in environmentally-conscious development. Collaboration between industry, government, and community stakeholders has helped the state cut volatile organic compound emissions nearly in half between 2011 and 2017 even as production increased fourfold.
A fracking ban would shut down much of this development, costing the state 468,000 jobs. At the same time, residents would see raising costs for most goods and services, increases researchers estimated would start at $520 per capita in 2021, but which would increase to $2,005 by 2025. The state government would also forgo millions of dollars in revenues and fees.
Because of negative effects like these, Colorado voters have rejected anti-development proposals like S.B. 181.
“Extreme measures to impede production, like banning hydraulic fracturing, would be detrimental to our economy—that’s why, when given the opportunity, Colorado voters consistently reject efforts to drive the industry out of our state,” said Chuck Berry, President of the Colorado Chamber of Commerce.
Meanwhile, in New Mexico, a fracking ban would strip the state of much-needed funding for infrastructure improvement, education, and public safety. The researchers found that in New Mexico, which they called “one of the great success stories of America’s energy revolution,” banning fracking would cost the state 142,000 jobs and $86 billion in lost GDP by 2025.
“To put this potential loss in perspective, more jobs supported by the oil and natural gas industry would be lost in the first year of a hydraulic fracturing ban than the total number of jobs that all New Mexico industries created in the last year,” the report concludes.
This sort of economic downturn would cost New Mexico households $26 billion in total income by 2025, equal to $10,723 in labor income per capita.