Oil industry predicts "severe consequences" if U.S. bans fracking
The oil industry and its backers are coming out swinging against proposals pushed by Democratic presidential candidates aiming to virtually eliminate oil and gas.
Why it matters: The emphasis, made at an annual luncheon attended by hundreds of energy executives, shows how worried the industry is about the potential impact of such proposals, including fracking bans.
What they're saying:
"At the extreme, we hear promises on the 2020 campaign trail to ban fracking, nationwide and forever. Here's a glimpse at that vision: Millions of jobs lost, a spike in household energy costs, a manufacturing downturn, less energy security. In the short run, a fracking ban in America would quickly invite a global recession. You don't abolish the most dynamic asset of the world's leading energy supplier without severe consequences."— Mike Sommers, CEO and president, American Petroleum Institute, a nonpartisan trade association
Sommers told reporters after the event that a report the group is going to release in the next week will show that such a move would cause a global recession.
Reality check: No evidence exists to back up the claim a U.S. ban on fracking, a controversial oil and gas extraction technique, would lead to a global recession. Such a move would likely hurt the economy and reverse the trend toward more energy security, though the extent to which that would occur is unclear.
- A September note from consulting and research firm Rapidan Energy Group projects that if a ban were imposed on Jan. 1, 2022, U.S. oil production from shale formations would fall by more than 3 million barrels per day within a year.
But, but, but: A Democratic president would need Congress to ban fracking nationally, and given the economic benefits of cheap oil and gas, such a move is unlikely to get enough support (something Sommers mentioned on Tuesday).
- A de facto ban on federal lands would be more likely, but most production has been on private lands.