Proposed Fracking Ban Puts Michigan’s Economy at Risk

Fracking Ban
Michigan US State background with waving flag white arrow and stocks chart fall down.

Over the past decade, the shale revolution has transformed the economy and reduced emissions. Now, a new study from the U.S. Chamber’s Global Energy Institute quantifies just how much Michigan stands to lose if some candidates succeed in ending it. 

The study comes as presidential candidates and activist groups have called for a ban on hydraulic fracturing—the technology that has made this energy revolution possible.  Several major candidates have promised to pursue such a ban if elected, and the results would deliver a staggering blow to the economy.

Despite having relatively little energy production, the analysis found that a ban on fracking would eliminate 516,000 jobs in Michigan between 2021-2025, while reducing Michigan’s Gross Domestic Product by $159 billion over the same period. The average Michigan consumer will see their cost of living increase by $5,170 by 2025, while household income would decrease by $88 billion. With a fracking ban in place, there would be $13.5 billion less in state and local tax revenue.

“Increased oil and gas production driven by hydraulic fracturing has been fueling America’s sustained period of growth over the past decade, while making us both cleaner and stronger,” said Marty Durbin, president of the U.S. Chamber’s Global Energy Institute. “Our study shows that banning fracking would have a catastrophic effect on our economy, inducing the equivalent of a major recession and raising the cost of living for everyone across the country. This bad idea should be abandoned.” 

“Michigan’s oil and gas industry is an important part of our state’s economy,” said Rich Studley, President and CEO of the Michigan Chamber. Having safe, affordable and reliable natural gas and oil is important to Michigan’s manufacturers and homeowners. A ban on fracking would drive prices up, which would hurt our industrial base, jeopardize hundreds of thousands of jobs and result in higher costs for consumers. This new study demonstrates that a ban on fracking would have negative consequences for the entire economy, and should be rejected.” 

The report is the first in the 2020 edition of GEI’s “Energy Accountability Series,” which takes a substantive look at what could happen if energy proposals from candidates and interest groups were actually adopted. The study is titled “What If Hydraulic Fracturing Was Banned? The Economic Benefits of the Shale Revolution and the Consequences of Ending It.” The 2020 edition updates a study first done in 2016 with new data and analysis, and several new states.

The study uses the well-known and widely used IMPLAN input-output model that tracks monetary transactions within the economy between different industries, the government and households. The report provides national impacts of a fracking ban, as well as state-specific impacts for five energy producing states—Colorado, New Mexico, Ohio, Pennsylvania, and Texas, and two states with limited energy production, Michigan and Wisconsin. 

Nationally, the analysis found that a ban on fracking would eliminate 19 million jobs between 2021-2025, while reducing U.S. Gross Domestic Product by $7.1 trillion over the same period. Energy prices would skyrocket, with natural gas prices rising by 324 percent, causing household energy bills to quadruple, and the cost of living to increase by $5,661 for the average American. By 2025, the price of gasoline would double and government revenues would plummet by almost $1.9 trillion. 

In addition to the economic boon, the rise of fracking has helped improve the environment. The report notes that U.S. carbon dioxide emissions have been reduced by more than 2.8 billion metric tons since 2005—roughly the equivalent of annual emissions from Australia, Brazil, Canada, France, Germany and the United Kingdom combined. 

The complete results of the report, including a detailed explanation of the methodology, are available here.

About the U.S. Chamber of Commerce 

The mission of the U.S. Chamber of Commerce’s Global Energy Institute is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.


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