American Petroleum Institute analysis says Sanders’ fracking bans would devastate Colorado economy

Date:  Comments: 0 - Permalink

U.S. Sen. Bernie Sanders has called for an immediate ban on fracking and the end of drilling on federal lands as a way to combat global climate change, a message that resonated in Colorado, where he won Tuesday’s Democratic presidential primary.

But the American Petroleum Institute argues that Sanders’ policies, if implemented, would deal a crushing blow to the Colorado economy, eliminating 353,218 jobs directly and indirectly.

That might explain why the industry is breathing a little easier after former Vice President Joe Biden’s strong performance on Tuesday. Biden’s campaign, although it has at times called for a fracking ban, has advocated tighter regulations, especially on methane emissions, and a more gradual transition.

“He has a more nuanced approach,” said Mike Sommers, president and CEO of the American Petroleum Institute, on a visit to Denver on Thursday.

Sommers said 95% of wells drilled in the U.S. rely on hydraulic fracturing, which injects water, sand and chemical lubricants under high pressure to fracture rock and release more petroleum. Fracking combined with horizontal drilling have greatly boosted U.S. production, including in the D-J Basin northeast of Denver.

Any ban would effectively kill off new activity and come with devastating economic consequences, with Colorado being one of the hardest-hit states, he said. The country could lose 7.5 million of the 10.9 million jobs the industry now supports and suffer a reduction in GDP of $1.2 trillion by 2022, which would trigger a recession, according to an economic analysis the API conducted on a fracking ban.

On a percentage basis, the states taking the biggest employment hit would be North Dakota, Oklahoma, New Mexico, Wyoming, Louisiana, West Virginia, Kansas and Colorado.

Given that oil and gas jobs tend to pay above-average wages, the study estimated household incomes nationally would decline an average of $5,040 a year, or 4.3% and consumers would spend $618 more a year in energy costs.

Sanders, in his Green New Deal, wants to switch electricity generation and transportation to all renewable energy sources by 2030 and make the U.S. economy carbon-free by 2050. The plan says that the transition will generate 20 million jobs, with special attention paid to workers in impacted industries.

Progressives and environmental groups argue that fracking has negative consequences on public health. Beyond that, they argue if climate change isn’t addressed and carbon emissions reduced immediately, the habitability of the planet is at risk, not just the economy.

Also, when it assumes a complete fracking ban, the API analysis may be dealing with a hypothetical rather than a probable scenario.

For starters, any president would be hard-pressed to ban oil and gas drilling in the country, without the help of Congress, according to an analysis in January from S&P Global Platts.

“An attempt to do so without support at the state level would likely face quick backlash and legal challenges from oil and gas producing states as individual states play a large role in regulating drilling activity,” the report argues.

Drilling on federal lands is a different matter. Biden and Sanders are likely to curtail permitting on federally owned or federally managed lands, which account for about a quarter of U.S. production.

Output in states like New Mexico would be hit hard going forward, but Colorado would see less severe impacts. Weld County, which accounts for about 90% of oil production and 60% of natural gas production in Colorado, is not on federal land.

The API, in its analysis, lists a series of ripple effects that would come with a fracking ban. The U.S. would go from being a net exporter of natural gas and oil to a heavy importer, relying on outside countries for 40% of its oil and 30% of its natural gas supplies.

Bringing in that much supply would create national security issues and higher energy prices would soak up resources across the economy. Farmers would be especially hard hit because of higher fuel costs, resulting in $25 billion of losses in farm income a year and causing food prices to rise, the study predicts.

This content was originally published here.

About admin

Highlighted News:

Sorry, no posts matched the criteria.
Sorry, no posts matched the criteria.
Sorry, no posts matched the criteria.

No Comments

Be the first to start a conversation