Could a ban on fracking happen? Would it benefit the nation? Democratic presidential candidates and some incumbent officeholders have recently called for a ban on the hydraulic fracturing of oil and gas wells, which is used to boost recovery from shale formations.
In 2012, my colleagues and I visited the topic with “The Arithmetic of Shale Gas,” in which we found that U.S. consumers benefited by more than $100 billion per year in lower natural gas prices. We contrasted that consumer gain with the harm from fracking asserted by activists (but unsubstantiated by a major Obama administration study).
So what, if anything, has changed since then? For one thing, the annual financial benefits to consumers from fracking have almost doubled as natural gas prices dropped. And we have learned more about the environmental impacts, including how to manage them.
Today, annual domestic natural gas consumption is approximately 31 trillion cubic feet, compared to 23 trillion cubic feet in 2008. The Henry Hub benchmark average price of natural gas was approximately $2.56/thousand cubic feet, or mcf, in 2019, versus $8.86/mcf in 2008, suggesting an approximate gain to U.S. consumers in 2019 of $195 billion.
Therefore, over the past 10 years, consumers have saved more than one trillion dollars. That’s $1,000,000,000,000 — real money even to politicians. With that much, and more, at stake, any argument against fracking needs to be well-founded.Read the whole article by clicking here.