American Oil and Gas Reporter - March 2020 - 95

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it when you say it, but natural gas is part
of that solution, and is not part of the
problem at all," he argues.
Pennsylvania Governor Thomas Wolf
has announced plans for the commonwealth to join the Regional Greenhouse
Gas Initiative. A multistate cooperative
effort by Connecticut, Delaware, Maine,
Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode
Island and Vermont, it seeks to reduce
carbon dioxide emission from the power
generation sector.
"I am a bit concerned if that happens,"
Slagel advises. "The general assembly
has been saying the governor cannot unilaterally join RGGI without legislative
approval. I don't know how that battle
will ultimately end, but it probably will

drag on for another year or two."
Weaver says the potential impacts of
joining RGGI will fall on the power generation sector more than the oil and gas
sector, although any negative effects ultimately will hit operators because of the
growth of natural gas use in power generation over the past several years.
"PIOGA has not officially taken a
stance on the RGGI proposal, because it
is not sure what it will look like," Weaver
indicates. "There are still a lot of questions
as to where this is going, but some legislators say this absolutely will not happen,
because the governor isn't going through
the proper channels. The governor thinks
he can just sign the paperwork for joining
RGGI, but those other states who have
joined the initiative have gone through

their legislatures."
The governor also has expressed support
for a full ban on hydraulic fracturing in the
Delaware River Basin, which extends into
northeast Pennsylvania, Weaver says. He
adds that if the DRBC moves ahead with
that action, residents of the affected counties
are ready to file lawsuits against the state,
claiming an illegal taking of property.
"However, the reality is there are not
a lot of producers looking at operating
in that area anyhow, so while it is a
showpiece, there just is not much gas
there," he explains. "The average person,
though, will look at what the commission
did and think there must be something
wrong with fracturing. That is why the
association has to counter those messages
right away."
❒

API Highlights Costs Of Fracture Ban
WASHINGTON-A ban on federal
leasing and fracturing on public and
private lands, which some presidential
candidates have proposed, would eliminate
as many as 7.7 million jobs in 2022,
slash gross domestic product by $7.1 trillion by 2030 and increase U.S. household
energy costs by more than $600 a year,
an economic analysis released by the
American Petroleum Institute warns.
The study, "America's Progress at
Risk: An Economic Analysis of a Ban on
Fracking and Federal Leasing for Natural
Gas and Oil Development," was conducted
by economic modeling firm OnLocation
Inc. If a ban is enacted, the study says
says, the United States would flip from
being a net exporter of oil and petroleum
products to importing more than 40% of
supplies by 2030.
"If I told you about a technology that
would help the environment, that would
help American consumers, would reduce
our trade deficit and increase American
jobs, I think most politicians would jump
on that, not try to ban it," poses API
President and Chief Executive Officer
Mike Sommers. "American families should
be shocked to hear proposals from candidates for high office that would ban
this transformative technology, which
would erase a generation of American
progress and return us to the days of
heavy reliance on foreign energy."
U.S. families would pay more under a
fracture ban, the analysis calculates. On
average, it predicts, residential natural
gas prices would increase 58% and electricity prices would average 20% more
per family annually. American farmers
also would suffer, API warns, with the
cost of wheat farming jumping 64%, corn

farming 54% more expensive, and soybean
farming increasing 48%, because of higher
energy costs.
"You can't eliminate the very technology that has enabled the American
energy revolution without damaging economic consequences," argues Lessly
Goudarzi, founder and CEO of OnLocation. "As our analysis shows, assuming a
full ban on fraccing would threaten a
U.S. recession and force American consumers to rely more on foreign energy
rather than energy produced here in the
United States."
Another report, written by energy
analysis firm Energy Policy Research
Foundation Inc., highlights the promises
of a fracturing ban from Democratic presidential candidates senators Bernie
Sanders, I-Vt., and Elizabeth Warren, DMa. The report acknowledges uncertainties
about authority by which a president may
theoretically attempt such a step, but adds
that even a move by the White House of
questionable legality still may do enough
to scare bank capital away from oil or
gas investments.
Job Losses
Technologically, fracturing is the chief
reason the United States is the world's
leading natural gas and oil producer, API
says, with fractured onshore and offshore
wells on federal leases accounting for
14% of domestic gas production and
nearly a quarter of U.S. oil output. In
fiscal 2019, oil production from federal
lands topped a record 1 billion barrels.
According to API, more than 95% of
U.S. natural gas and oil wells now are
developed using hydraulic fracturing. The
study projects the states with the highest

job losses in 2022 if a fracturing ban is
enacted include Texas (1.3 million), California (765,000), Florida (711,000), Pennsylvania (551,000) and Ohio (500,000).
API's analysis also contains a number
of other warnings:
· In 2022, top states for job losses as
a share of overall employment include
North Dakota, Oklahoma, New Mexico,
Wyoming, Louisiana, West Virginia,
Kansas and Colorado.
· A fracturing ban would increase
the U.S. trade deficit by a cumulative
$3.1 trillion through 2030.
· Average gasoline prices would climb
15%, while average electricity prices
jump 20% per family and residential
heating oil prices average 15% higher.
· Total cumulative lost farm income
exceeds $275 billion, with average farm
income losses topping $25 billion.
A little more than a decade ago, energy
imports were at record highs and the
U.S. economy faced high energy costs
and a growing reliance on those imports,
at a time when global oil prices peaked
at $133 a barrel and gas prices topped
$12 a million Btus, the study recalls. In
2008, the country imported 57% of its
oil products and natural gas imports accounted for 13% of domestic use.
According to API, the study was developed based on the U.S. Energy Information
Administration's Energy Modeling System,
a model used to build the U.S. Department
of Energy's Annual Energy Outlook. ❒

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