Oil and gas production from the U.S. petroleum resource base has experienced an unprecedented expansion in output which has now positioned the U.S. as the world’s largest oil and gas producer. The North American petroleum production platform is soon to become a net oil and gas exporter to the world market. This rapid expansion in oil and gas production has enhanced U.S. energy security, provided greater stability to the world oil market, and conveyed sustained economic benefits to the national economy. The expansion in output has been possible through a series of advances in extraction technology including the use of hydraulic fracturing which permits oil and gas production from so-called source rock.
Concerns over carbon emissions from sustained increases in domestic oil and gas production has now been reflected in the 2020 Presidential race, with some candidates and many public interest groups calling for an end to hydraulic fracturing. Operationally, these initiatives would include a ban on oil and gas development on public lands, prohibition of new infrastructure, such as pipelines, export terminals and even refineries. This effort, championed by several Democratic candidates for President would include features of so-called Green New Deal (GND) to quickly move that national energy complex to a fully renewable fuel system.
In this paper, EPRINC fellow, Michael Lynch, explores the economic consequences of policies aimed at severely reducing U.S. oil and gas production. Such an estimate is important because whatever the merits (benefits) from reducing carbon emissions through oil and gas production constraints, policy makers will have to confront the costs and public acceptance of such a policy.Click here to visit this release on the EPRINC website.
And below is the research paper for your review, including its conclusion:
A ban on fracking (should the new administration be able to overcome a large array of legal and political obstacles) would result in large and sustained declines in U.S. oil and gas output, with oil and natural gas liquids dropping by 7 million barrels per day in two years and natural gas falling by 11 billion cubic feet per day over the same period, even with a huge rise in conventional drilling. Job losses in the U.S. petroleum and related industries would start with the layoffs of over ten thousand fracking crews and direct losses would be over 150,000 jobs, with indirect losses about three times that much. The bill in the first two years of a fracking ban could be, by conservative estimates, an extra $150 billion on the trade deficit and $300 to $600 billion in additional consumer expenditures for oil and gas.