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Research & Commentary: Congressional Bill Would Block Federal Infrastructure Funds from Heading to States that Have Banned Hydraulic Fracturing

September 1, 2022

Appropriated EECGB Funds From 2021 Infrastructure Bill Would Be Barred From Distribution To Anti-Fracking States

Legislation introduced in the U.S. House of Representatives would block any state that bans the hydraulic fracturing (“fracking”) process for accessing reserves of oil or natural gas from receive funds through the Energy Efficiency and Conservation Block Grant (EECBG) program from the U.S. Department of Energy.

The EECBG program, funded by a $550 million appropriation from the Infrastructure Investment and Jobs Act passed last November, “provides local government, states, territories, and Indian tribes resources to implement strategies to reduce fossil fuel emissions,” reduce “the total energy use of the eligible entities,” and improve “energy efficiency in the transportation, building, and other appropriate sectors.”

The bill, titled the “American Energy is Global Security Act”, was introduced by New York Representative Claudia Tenney (R-22) as a way of getting the Empire State, and others that have followed its path, to correct its self-defeating energy policies.

“Much of Central New York, Western New York, and the Southern Tier lie above the Marcellus Shale and the deeper Utica Shale formations,” a press release from the congresswoman’s office states. “These resources have allowed neighboring Pennsylvania to become the 2nd largest natural gas producer in the United States, accounting for 20.5% of all domestic natural gas production. This energy development now supports 480 thousand Pennsylvania jobs and collects over $500 million for statewide environmental protection funding. Similarly, these formations could power New York for decades and help restore economic prosperity to the region.”

“Despite any firm environmental evidence,” the release continues, “the administration of disgraced former Governor Andrew Cuomo implemented a blanket statewide ban on hydraulic fracturing. The ban was then officially established in 2015 by the NYS Department of Environmental Conservation (DEC) and codified in 2020 by the New York State legislature. This baseless anti-energy policy has stopped our state from accessing a local lower-carbon energy source with the potential to meet the state’s energy needs for decades and provide necessary economic development to Upstate New York communities. It is time for the repeal of this failed ban and a return to a fact-driven energy policy.”

A 2021 report commissioned by the American Petroleum Institute (API) and undertaken by PricewaterhouseCoopers (PwC) found the oil and natural gas industries directly or indirectly supported over 11 million jobs across the country in 2019, produced $892 billion in labor income, and had a nationwide economic impact of nearly $1.7 trillion.

Hydraulic fracturing activity also delivers $1,300 to $1,900 in annual benefits to local households, including “a 7 percent increase in average income, driven by rises in wages and royalty payments, a 10 percent increase in employment, and a 6 percent increase in housing prices,” according to a December 2016 study conducted by researchers at the University of Chicago, Princeton University, and the Massachusetts Institute of Technology. 

Fracking enables the cost-effective extraction of once-inaccessible oil and natural gas deposits. These energy sources are abundant, inexpensive, environmentally safe, and can ensure the United States remains a leading energy producer well beyond the twenty-first century. Therefore, policymakers at all levels of government should refrain from placing unnecessary burdens on the natural gas and oil industries, which are safe and positively impact the United States.

The following documents provide more information about hydraulic fracturing and fossil fuels.

Impacts of the Natural Gas and Oil Industry on the U.S. Economy in 2019
https://www.api.org/-/media/Files/Policy/American-Energy/PwC/API-PWC-Economic-Impact-Report.pdf
This study, conducted by PricewaterhouseCoopers and commissioned by the American Petroleum Institute, shows that the natural gas and oil industry supported 11.3 million U.S. jobs in 2019, produced $892 billion in labor income, and had a nationwide economic impact of nearly $1.7 trillion The study also shows the natural gas and oil industry has had widespread impacts in each of the 50 states.

America’s Progress at Risk: An Economic Analysis of a Ban on Fracking and Federal Leasing for Natural Gas and Oil Development
https://www.api.org/~/media/Files/Oil-and-Natural-Gas/Hydraulic-Fracturing/2020/fracking-ban-study-americas-progress-at-risk.pdf
The study from the American Petroleum Institute (conducted by economic modeling firm OnLocation) warns that banning federal leasing and fracking on public and private lands, which some presidential candidates have proposed, would cost up to 7.5 million American jobs in 2022 alone, lead to a cumulative GDP loss of $7.1 trillion by 2030, slash household incomes by $5,400 annually, increase household energy costs by more than $600 per year and reduce farm incomes by 43 percent 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 percent of supplies by 2030.

The Fiscal and Economic Impacts of Federal Onshore Oil and Gas Lease Moratorium and Drilling Ban Policies
https://www.wyoenergy.org/wp-content/uploads/2020/12/Final-Report-Federal-Leasing-Drilling-Ban-Policies-121420.pdf
This report from the School of Energy Resources at the University of Wyoming demonstrates how a fracking ban or leasing moratorium on federal lands like the one advocated by the Biden presidential campaign would severely harm the economies of eight western states.

What If…Hydraulic Fracturing Were Banned? (2020 Edition)
https://www.globalenergyinstitute.org/sites/default/files/2019-12/hf_ban_report_final.pdf
This study from the Global Energy Institute at the U.S. Chamber of Commerce says a ban on fracking in the United States would be catastrophic for our economy. Their analysis shows that if such a ban were imposed in 2021, by 2025 it would eliminate 19 million jobs and reduce U.S. Gross Domestic Product by $7.1 trillion. Tax revenue at the local, state, and federal levels would decline by nearly a combined $1.9 trillion. Natural gas prices would leap by 324 percent, causing household energy bills to more than quadruple. By 2025, motorists would pay twice as much at the pump for gasoline as oil prices spike to $130 per barrel, while less domestic energy production would also mean less energy security.

America’s Progress at Risk: An Economic Analysis of a Ban on Fracking and Federal Leasing for Natural Gas and Oil Development
https://www.api.org/~/media/Files/Oil-and-Natural-Gas/Hydraulic-Fracturing/2020/fracking-ban-study-americas-progress-at-risk.pdf
The study from the American Petroleum Institute (conducted by economic modeling firm OnLocation) warns that banning federal leasing and fracking on public and private lands, which some presidential candidates have proposed, would cost up to 7.5 million American jobs in 2022 alone, lead to a cumulative GDP loss of $7.1 trillion by 2030, slash household incomes by $5,400 annually, increase household energy costs by more than $600 per year and reduce farm incomes by 43 percent 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 percent of supplies by 2030.

Debunking Four Persistent Myths about Hydraulic Fracturing
https://www.heartland.org/publications-resources/publications/debunking-four-persistent-myths-about-hydraulic-fracturing
This Heartland Institute Policy Brief by Policy Analyst Timothy Benson and former Heartland communications intern Linnea Lueken outlines the basic elements of the fracking process and then refutes the four most widespread fracking myths, providing lawmakers and the public with the research and data they need to make informed decisions about hydraulic fracturing.

The Local Economic and Welfare Consequences of Hydraulic Fracturing
https://www.heartland.org/publications-resources/publications/the-local-economic-and-welfare-consequences-of-hydraulic-fracturing
This comprehensive study published by the National Bureau of Economic Research says fracking brings, on average, $1,300 to $1,900 in annual benefits to local households, including a 7 percent increase in average income, a 10 percent increase in employment, and a 6 percent increase in housing prices.

Legislating Energy Poverty: A Case Study of How California’s and New York’s Climate Change Policies Are Increasing Energy Costs and Hurting the Economy
https://www.pacificresearch.org/wp-content/uploads/2018/12/LegislatingEnergy_F_Web.pdf
This analysis from Wayne Winegarden of the Pacific Research Institute shows the big government approach to fighting climate change taken by California and New York hits working class and minority communities the hardest. The paper reviews the impact of global warming policies adopted in California and New York, such as unrealistic renewable energy goals, strict low carbon fuel standards, and costly subsidies for buying higher-priced electric cars and installing solar panels. The report finds that, collectively, these expensive and burdensome policies are dramatically increasing the energy burdens of their respective state residents.

The U.S. Leads the World in Clean Air: The Case for Environmental Optimism
https://files.texaspolicy.com/uploads/2018/11/27165514/2018-11-RR-US-Leads-the-World-in-Clean-Air-ACEE-White.pdf
This paper from the Texas Public Policy Foundation examines how the United States achieved robust economic growth while dramatically reducing emissions of air pollutants. The paper states that these achievements should be celebrated as a public policy success story, but instead the prevailing narrative among political and environmental leaders is one of environmental decline that can only be reversed with a more stringent regulatory approach. Instead, the paper urges for the data to be considered and applied to the narrative.

Climate Change Reconsidered II: Fossil Fuels – Summary for Policymakers
https://www.heartland.org/publications-resources/publications/climate-change-reconsidered-ii-fossil-fuels---summary-for-policymakers
In this fifth volume of the Climate Change Reconsidered series, 117 scientists, economists, and other experts assess the costs and benefits of the use of fossil fuels by reviewing scientific and economic literature on organic chemistry, climate science, public health, economic history, human security, and theoretical studies based on integrated assessment models (IAMs) and cost-benefit analysis (CBA).

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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