by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The extraction of oil and gas through the techniques of horizontal drilling and hydraulic fracturing (colloquially, “fracking”) has catapulted the United States into leadership of the world’s energy markets. Since 2007, fracking has doubled U.S. oil production and increased gas production by 60%. Instead of a major importer, America is rapidly becoming the largest exporter of oil and is expected to supply the majority of net new energy traded on global markets over the next two decades.
If the U.S. imposed a fracking ban, the supply disruption would trigger the biggest oil and natural gas price spikes in history—almost certainly by more than 200%—which would, in turn, tip the world into recession. Even the expectation that a ban could be enacted would destabilize markets. U.S. imports and the trade imbalance would soar, as would consumers’ spending on energy. To keep the lights on, America would have to nearly double the quantity of coal burned, as well as import up to 1 million barrels of oil per day for dual-fueled power plants that would lose access to natural gas. …
… Alternative energy sources—in particular, wind and solar—could not replace what would be lost from a ban on fracking in time to prevent massive economic and social disruptions.
Oil and gas together supply 54% of global energy, little different from a 55% share a decade ago or the 53% share forecast by the International Energy Agency for 2040. Oil alone powers 98% of all global transportation.
Wind and solar together supply 1.8% of the world’s energy, and electric vehicles have displaced 0.1% of global oil use over the past decade.
The entire world would have to increase global wind and solar installations by 500% to replace the energy that would be lost from an American fracking ban—never mind the additional energy needed to fuel global economic growth.