A ban on federal leasing hydraulic fracturing (fracking) on public and private lands in the United States would potentially cost as many as 7.5 million jobs in 2022 and lead to a cumulative gross domestic production (GDP) loss of $7.1 trillion by 2030, according to the American Petroleum Institute (API).
A study conducted by OnLocation Inc. found that such a ban would prompt a series of economic setbacks, including cutting average household income by $5,400 annually, increasing household energy costs by more than $600 per year and reducing farm incomes by 43% due to higher energy costs.
"If a ban is enacted, the U.S. would flip from being a net exporter of oil and petroleum products to importing more than 40% of supplies by 2030," API said in a report issued Thursday.
"You can't eliminate the very technology that has enabled the American energy revolution without damaging economic consequences," said OnLocation CEO Lessly Goudarzi. "As our analysis shows, assuming a full ban on fracking would threaten a U.S. recession and force American consumers to rely more on foreign energy rather than energy produced here in the U.S."
OnLocation concluded that average residential natural gas prices would increase 58% and electricity prices would average 20% higher per family annually if a frack ban were enacted.
The study, based on the U.S. Energy Information Administration's National Energy Modeling System, examined the potential impact of a fracking ban on all industries and households.
The conclusions in the API study mirrored a recent report by the Global Energy Institute that found that a ban on fracking would be "catastrophic" for the U.S. economy, eliminating 19 million jobs by 2025, reducing GDP by $7.1 trillion, and reducing tax revenue at the local, state and federal levels by almost $1.9 trillion.