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US Fracking Ban Could Cost The Economy $7 Trillion

A ban on oil and gas drilling in the United States proposed by US Democrat presidential hopefuls will cost the economy $7 trillion, US oil industry lobby group American Petroleum Institute said on Thursday.

In a new report, the API calls out the price climate plans laid out by the Democrat party frontrunner socialist Bernie Sanders and another party hopeful, Elizabeth Warren, alleging that their plans to ban fracking across the nation would chip away $7.1 trillion from the gross domestic production over the next decade.

It would also strip away jobs in major oil hotpots like Texas.

The API didn’t stop there. Its report laid out a laundry list of complaints with the leftist proposals, which would not only see a total ban on fracking, but which would also stop federal natural gas and oil leasing. In addition to the $7 trillion cost, the API suggests in its report that it would increase America’s reliance on foreign fossil fuels and increase costs for farmers and homeowners, Reuters said.

The Democrat candidates, however, suggest that the extraordinary measures is what is necessary to address the “climate crisis” by transitioning to greener energy.

Their solution, along with coming up socking it to taxpayers for $7.1 trillion, in part, includes retraining any displaced oil and gas workers.

But the Democrat’s timing on the energy revolution couldn’t have come at a worse time for US oil producers who will likely fight to the death, after a few years of bang-up production in the United States gave the nation a new level of energy dependence that has freed it—in part—from OPEC’s puppet-master ways of choking oil output among its members to manipulate market prices, at the literal expense of US consumers.

By Julianne Geiger for Oilprice.com

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  • A. D. on March 10 2020 said:
    @ abstract exchange imagine.

    First, your confusing pilot programs with full scale development. Even if there are renewable energies that can take market share from oil and gas (O&G), it's not an immediate deployment. Second, you don't fully understand the concept of what O&G is, because if you did you'd understand that what you're talking about is replacing natural gas not oil, petroleum, or petrochemicals. Third, since your evaluation doesn't consider time scale. You've missed the boat on the immediate impact on a frac ban. The global demand would get back filled with global O&G production. Which would increase emissions since the regulations in OPEC and Russia fields are less than in the U.S.

    You either work on green hydrogen or are willfully ignorant to your own reliance on O&G.
  • abstract exchange imagine on February 29 2020 said:
    The American Petroleum Institute gave very wrong observation about the consequences of fossil fuel bans. This wrong observation is very dangerous, because it can gradually decrease global role of America, and leads America to very conflicted position of energy supply ability-energy demand.
    The Democrat proposes quite right direction : transition to renewable energy. It is the only right direction, which can make America again to be great. But it is necessary to emphasise that fossil fuel bans must go in tandem with colossal building renewable energy stations+hydrogen productions factories. So the right strategy is near the Democrat propose, it is : try maximally to use revenues of present fossil fuel to accelerate building colossal net of renewable energy stations+hydrogen production factories in all american territories, and step by step delete fossil fuels stations to 0. The final target of this process is that America becomes green hydrogen exporter. In far future, if people will use more nuclear energy or nuclear fusion energy, then hydrogen is the fundamental intermediate energy carrier for global import-export energy market (global hydrogen market).
    I explain why green hydrogen economy is right approach for America to get advantage in the world :
    1/ Renewable energy resource is more than enough to power all countries with current developing temp for many years more.
    2/ America has no advantage to compete with some countries by fossil fuels, for example Russia. Urge fossil fuels, America will not only harm global health, but also exactly will lose Russia in fossil fuel competing. But if switch fossil fuel competition to green energy competition, than America will have very important advantage, because America has big resource of solar and wind energy . So America must tend the world to hydrogen energy model, in which America can sell hydrogen, as America has advantage in producing green hydrogen. At least, in hydrogen economy, America can always guarantee it green energy leader position. Transition into green hydrogen is very possible, and it will happen. Today many countries regard their idealistic cultures more than economic arguments. It means that just propagate the hydrogen economy for ecology, than people will gradually deny fossil fuels to buy hydrogen.
    3/ If America wants to achieve global leader role again, then America must have attractive modern civilisation idealistic culture to talk and to call the world. Hydrogen economy is ideal culture to attract the world. Fortunately for America that it really has advantages in hydrogen economy culture. Once it can talk and attract the world, it can organise global structures with finances of world partners in this hydrogen economy culture. For example, organise to make african countries to be rich to convert africa into hydrogen exporter for the whole world.

    I explain why American Petroleum Institute gave wrong observation :
    1/ fossil fuels energy bans will cut jobs . It is wrong. Fossil fuel bans go in tandem with building renewable energy nets+hydrogen production nets. Renewable energy+hydrogen economy creates more jobs than fossil fuel energy.
    2/ fossil fuel energy ban will lead America to reliance on foreign fossil fuel energy. It is wrong! Because renewable energy+hydrogen economy gives enough energy for America and export.
  • Lee James on February 29 2020 said:
    The U.S. is the high-cost producer of oil. Almost free money for investing in oil combined with an over-supply of investors with high expectations for higher oil prices have heated up U.S. oil production.

    OPEC and such wish to maintain an oil price that is high enough to support government spending and debt service.

    After the fumes settle, we will see that fracking has been overall unprofitable and we are not the net oil exporter that we think we are.

    We've seen a lot of wishful thinking around the U.S. oil industry. Time to think about what to do differently. I suggest burn less and transition to alternatives at a faster rate.

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