Why Banning Fracking Might Worsen the Recession

Before COVID-19 hit, several key Democrats were pushing for a ban on fracking —  the process for extracting natural gas from the ground. Some conservatives argued that the economic damage caused by an action like this would far outweigh any potential environmental benefit. 

Mark P. Mills, a senior fellow at the Manhattan Institute and author of the book Digital Cathedrals: The Information Infrastructure Era wrote an op-ed for CNN in February where he argued that the jobs lost as part of a fracking ban could not easily be made up elsewhere as advocates for the ban argued.

Because the United States is now the world’s largest producer and a major exporter of both petroleum and natural gas, a fracking ban would constitute the biggest energy disruption in 40 years and trigger a global recession,” Mills wrote. “This isn’t speculation. It has happened before.”

Mills went on to compare a fracking ban to the 1973 OPEC oil embargo that resulted in a 400 percent increase in oil prices and a global recession. The results were devastating and lasted for years, he said.

The Manhattan Institute predicts that a fracking ban would cause a 200 percent increase in the price of oil and natural gas. Such a spike would happen because 7 percent of the world’s oil and 17 percent of the world’s natural gas would be eliminated if the U.S. was no longer able to meet its current supply levels.

No matter how much Democrats and environmental advocates want renewable energy to take the place of fossil fuels, the reality, Mills argues, is that we’re just not there yet. If we move too soon to reduce our dependence on fossil fuels, the results could be disastrous.

Not only will people be out of work in such a scenario, but consumers around the world will have to pay more for something that’s essential to many facets of our lives. Though Mills’s piece was written before COVID-19, the picture is perhaps even more clear now as millions of Americans are unemployed or underemployed as a result of the virus.

The last thing the U.S. should be doing right now, the Manhattan Institute argues, is cutting ties with something that is helping to keep the economy going and keep Americans employed. 

Mills also notes that the U.S. relies on fracking to access many of the minerals used to produce smartphones and other popular electronics, so the implications of a ban extend beyond the effects on oil and gas for fuel and heating.

“While policymakers on both sides of the aisle seek to increase American renewable technology manufacturing, it will take decades before the United States can ramp up significant domestic production,” Mills wrote in the CNN op-ed. “Until America embraces more mining for minerals like lithium, cobalt, nickel, and rare earths, accelerating renewables means replacing hydrocarbon exports with more mineral imports.”

With the election looming in November, it’s unlikely that any meaningful action on fracking will occur until after November 3 — and perhaps even well beyond that depending on how the election and COVID-19 continue to play out.

Grassroots Pulse covers public policy and political issues aimed at engaging highly-active policy makers, donors, and grassroots leaders at the forefront of the political process in America today.

Image Credit: Photo by Zbynek Burival on Unsplash

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