American Oil and Gas Reporter - March 2020 - 27

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Proposals To Ban Fracturing
Unlikely To Find Traction,
But Reveal Mindset, Strategy
As noted in June's Washington Watch, Democratic presidential
candidates were lining up to proclaim that, if elected, they
would ban hydraulic fracturing on federal lands. Since then, we
have seen some divergence among the candidates. The Feb. 19
Democratic primary debate in Las Vegas laid bare the candidates'
differences over fracturing.
Senator Bernie Sanders, I-Vt., said he would tell Pennsylvania
oil and natural gas workers whose jobs would be sacrificed of
the need to act "incredibly boldly" in the near future to prevent
"irreparable" global damage from climate change. Former New
York City Mayor Michael Bloomberg said he did not support a
hydraulic fracturing ban: "If we enforced some of the rules on
fraccing so that they don't release methane into the air and into
the water, you will make a big difference, but we are not going
to get rid of fraccing for a while." Similarly, Senator Amy
Klobuchar, D-Mn., referred to natural gas as a "transitional
fuel," but did not support a ban.
What does a frac ban mean to the candidates espousing one,
and what would the impact be? On Feb. 12, representatives
Alexandria Ocasio-Cortez, D-N.Y., and Darren Soto, D-Fl., introduced H.R. 5857, the "Fracking Ban Act," a bill to phase out
hydraulic fracturing nationwide-not only on federal lands-in
the United States. A companion bill was introduced in the
Senate by Sanders and Senator Jeff Merkley D-Or. The House
Energy and Commerce Committee put forward the "CLEAN
Future Act Proposal, which would address a wide array of important energy issues.
Although it is likely that neither the House nor Senate will
consider these proposals in this Congress, they are instructive.
The CLEAN Future Act is an effort by the committee of jurisdiction over energy and Clean Air Act issues to stake out its turf
while a special committee on climate is about to release its recommendations. However, while the proposal presents itself as
policy to support clean energy development, it includes an
array of provisions that punish oil and natural gas production.
Sanders' legislation presents itself as a fracturing proposal,
but defines the term more broadly than the industry does
while also directing federal agencies to deny permits for new
natural gas and oil infrastructure and use. The nuances of the
legislative language can be significant. Like the Sanders bill,
which expands the definition of hydraulic fracturing to include
acid stimulation, provisions in the CLEAN Future Act regarding
carbon dioxide enhanced oil recovery and groundwater sampling
need to be assessed because they shift the federal regulatory
structure in potentially significant ways. Taken together, the
proposals show the types of federal policies likely to be the
subject of future debate.
As for fracturing bans, a recent paper by Energy Policy Research Foundation Inc. fellow Michael Lynch explores the economic consequences of policies that aim to severely reduce
U.S. oil and natural gas production. Such an estimate is important
because, whatever the likely merits or benefits of reducing
carbon emissions by constraining oil and gas production, poli-

"Sanders' legislation presents itself as a

fracturing proposal, but not only covers
more than stimulation in its definition of
fracturing, it also directs federal agencies
to deny permits that allow for the
development of infrastructure and the use
of natural gas and oil.

cymakers must confront the costs and public acceptance of
such a policy.
"The Impact of a Fracking Ban on Shale Production and the
Economy" provides important insights. If a ban is enacted, projected U.S. shale oil production would nosedive in two years.
This collapse in oil production from American formations
"would be accompanied by an increase of $150 billion in U.S.
oil imports in the unlikely event that the production loss would
not bring about an increase in world oil prices. In a more likely
case of at least another $20 a barrel increase in oil prices, the
U.S. oil trade deficit would grow by $200 billion over the
current level and consumers would have to spend an extra $400
billion for their oil and gas."
For natural gas production, the EPRINC paper projects
that "output would not be as severely curtailed, partly because
some of the loss can be offset by increasing conventional gas
supply. In the near term, substantial price risks would remain
as it would be difficult to expand imports given limited LNG
import capacity. To attract imports, domestic U.S. prices would
probably triple; the gas bill for consumers would grow by
over $100 billion."
Since 2005, natural gas has prevented 2.8 billion metric tons
of carbon dioxide emissions. Absent the fracturing ban rhetoric,
the U.S. Energy Information Administration projects natural
gas production and exports will continue increasing in most
scenarios. Soundbites seldom prompt good public policy. The
significance of these campaign promises and the implementing
legislation must be weighed carefully, and voters need to know
about their potential costs.
r

SUSAN GINSBERG is vice

president of crude oil and natural gas regulatory affairs for
the Independent Petroleum Association of America. She covers legislation and regulation,
focusing on the CFTC and
FERC. Her experience in natural gas regulatory affairs spans
more than three decades.
MARCH 2020 27

American Oil and Gas Reporter - March 2020

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