Fracking ban: Bad for America, bad for Americans, but what to do?
More than 80 percent of our basic energy, electricity and mobility, comes from fossil energy (coal, oil and natural gas). More than 60 percent of our oil and gas is produced by hydraulic fracturing, also known as fracking. What would happen if certain extremists have their way and outright ban fracking? The shock to our American way of life would leave us clamoring over energy outages, ever higher prices, increased job losses, a weakening economy with higher inflation, and for those who can least afford it, deeper impoverishment. Energy transitions should not happen with “shock therapy” that costs so many so much.
If we banned fracking, all the improvements made to our energy security in the last decade would disappear. We turned from excessive imports of oil and gas a decade ago to being a top exporter of oil and gas to the world. In addition to propping up our own energy security we have become the top global producer of oil and gas in the world. This has tremendously strengthened our domestic economy, improved our balance of international trade over what it would have been without fracking, strengthened the value of the dollar, lowered the price of energy and created millions of jobs. We have built a liquified natural gas exporting industry that has enabled Europe, China and numerous other nations to be less reliant on Russia or the Middle East for energy imports. Banning fracking would emasculate our energy diplomacy and present a huge gift to Russian President Vladimir Putin, China’s Xi Jinping and OPEC members who relish resuming their historic dominance.
Ban fracking and we will begin to import, not export, more and more oil and gas, returning America to the energy dependencies of the past. Our trade deficit would go sharply negative. The value of the dollar would decline precipitously and we would risk becoming a weaker and poorer nation. Millions of energy jobs would be lost. Heavy energy users in steel, food processing, information management, the travel industry and manufacturers across the board would lose (and do) due to higher energy prices.
Let us also recognize that natural gas for fertilizer is a critical requirement for America’s agricultural success and the availability and affordability of food. Oil products are vital for mechanized farming.We not only feed ourselves, we feed the world with our agricultural bounty. Petrochemical products that range from household cleaners, paints, most plastics, synthetic fibers for carpets, clothes and thousands of other products, as well as medicines and pharmaceuticals also depend on fracking.
Efforts to reengineer supply chains and to reshore American jobs are dependent upon affordable and available energy supplies. Fracking has provided low-cost energy that is attractive to companies that previously took advantage of low-cost labor to offshore jobs. It makes no sense to say we want companies to return to America or to invest more in America when the costs of the energy that they need will increase so much.
Higher costs of everything — food, energy, electricity, heating, cooling, gas prices, clothing and housing — imposes a greater burden on those who can least afford it. For lower income people, most particularly in rural communities, energy can consume an average of 8.6 percent — even go as high as 12 to 14 percent — of their income. Some people have spent over 50 percent of their incomes on energy. That is a lot for people already on the edge. Paying the electric or fuel bill in winter or summer, filling up the gas tank, can be an expense — it’s just not affordable.
This century provides the opportunity to develop a rational and coherent plan for energy use and energy transitions that takes into account the benefits from every form of energy, including oil, gas, coal, nuclear, hydropower, biomass, wind, solar, geothermal and hydrogen. It could also afford us a chance to reduce the 65 percent-plus of energy we waste daily, which should be a top focus. It takes time to develop and execute such a plan. It took well over a century to build the current energy system. Its environmental impacts however are out of balance relative to Earth’s natural health. But a “shock therapy” ban on fracking here would transfer the environmental burden of oil and gas production to other countries, at great cost to the U.S.
Banning fracking would increase natural gas prices for electricity generation and lead us back to coal. There is no question that greater natural gas availability and affordability have led to the dramatic reduction of coal-fired power in the U.S. From 50 percent of supply 20 years ago, fracking has enabled cleaner natural gas to reduce coal to less than 25 percent of power, while gas has increased from 20 to 40 percent of electricity generation. A reversion back to coal would result in greater carbon emissions, which have been reduced in recent years.
We must fight and win the battle over climate change. To do so, we must transition our energy and environmental system to deliver all the above: available, affordable and sustainable energy from all sources. Some extremists claim that the only way forward to fight climate change is to quickly abandon fossil energy that has created the economic success and quality of life delivered during the 20th and so far, 21st century economic history. They are wrong. A moderate and middle way to energy transitions is the most sensible path.
We can significantly change the mix of energy sources over the coming decades to more renewables. We can also vastly increase energy use efficiency. We can dramatically address the effects of carbon pollution with carbon removal, reuse and sequestration, and moderate, well-considered energy transitions. And we can take advantage of innovation and energy efficiencies and new technologies as part of the transition. A “shock therapy” banning fracking could quite easily backfire because it would cast a burden of costs and losses on those who can afford it the least, with relatively small net environmental gains.
John Hofmeister is the former president of Shell Oil. Paul Sullivan is a professor at the National Defense University. All opinions are the authors’ only.
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