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Research & Commentary: EPA Finds Greenhouse Gas Emissions Continue to Decline While Oil, Natural Gas Production Soars

May 10, 2019

Greenhouse Gas Emissions Now 12 Percent Below 2005 Levels, Primarily Due To Fracking

The U.S. Environmental Protection Agency’s (EPA) 2018 Greenhouse Gas Inventory (GHGI) was released on April 11. It revealed total greenhouse gas (GHG) emissions in the United States decreased by 35.6 million metric tons of CO2 equivalent, or 0.5 percent from 2016 to 2017. Indeed, U.S. GHG emissions are now at their lowest levels since 1992 and only 1.3 percent higher than their 1990 levels.

Since 2005, GHG emissions are down 12 percent. Over this same period, oil production in the United States has increased by 80 percent and natural gas production has increased by 51 percent, according to the Energy Information Administration (EIA). This is primarily due to the hydraulic fracturing (or “fracking”) revolution of the past decade.

While domestic petroleum consumption has decreased slightly, natural gas consumption has increased 23 percent. EIA also notes 61 percent of carbon dioxide emissions reductions in electricity generation in the U.S. since 2005 can be credited to this growth in natural gas consumption. The GHGI also goes on to note methane emissions have declined by a total of 15.8 percent since 1990, and those emissions from petroleum and natural gas systems have decreased by 10.5 percent and 14.2 percent, respectively, over the same period.

Quite simply, despite opposition from environmental groups, who have attempted to ban fracking at every opportunity, the industry has transformed the nation’s long-term energy outlook. Moreover, its gradual replacement of coal in the country’s energy portfolio is the main driver of these dramatic reductions in GHG emissions.

Not only is the fracking industry helping reduce GHG emissions, it is also providing large economic benefits to local communities located near drilling activities. A study published in the American Economic Review in April 2017 found “each million dollars of new [oil and gas] production produces $80,000 in wage income and $132,000 in royalty and business income within a county. Within 100 miles, one million dollars of new production generates $257,000 in wages and $286,000 in royalty and business income.”

2016 study from researchers at the University of Chicago, Princeton University, and the Massachusetts Institute of Technology examined nine different shale basins, “the most comprehensive assessment to date,” according to the authors. Using a “willingness-to-pay” metric, the study found hydraulic fracturing activity brings $1,300 to $1,900 in annual benefits to local households, totaling roughly $64 billion in yearly household benefits for those living in the nine basins studied. These benefits include a “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 the authors, “Local government revenues also increased at a faster pace than expenditures.”

Hydraulic fracturing has enabled American energy companies to produce abundant amounts of oil and natural gas. Even better, fracking can ensure the United States is the world’s largest energy producer well beyond the 21st century. Therefore, policymakers should not put unnecessary and detrimental regulations on the natural gas and oil industries, which are safe, responsible, and have had an enormous positive impact on the economy at the macro and micro levels.

The following documents provide more information about fracking and fossil fuels.

Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2017
https://www.epa.gov/sites/production/files/2019-04/documents/us-ghg-inventory-2019-main-text.pdf
EPA’s Greenhouse Gas Inventory provides a broad overview of all U.S. greenhouse gas emissions sources and sinks, introduces key concepts, and discusses the primary drivers for changes in greenhouse gas emissions. The 2018 version finds greenhouse gas emissions decreased by 0.5 percent from 2016 to 2017 and are now just 1.3 percent above 1990 levels.

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.

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 Social Benefits of Fossil Fuels
https://www.heartland.org/publications-resources/publications/the-social-benefits-of-fossil-fuels
This Heartland Policy Brief by Joseph Bast and Peter Ferrara documents the many benefits from the historic and still ongoing use of fossil fuels. Fossil fuels are lifting billions of people out of poverty, reducing all the negative effects of poverty on human health, and vastly improving human well-being and safety by powering labor-saving and life-protecting technologies, such as air conditioning, modern medicine, and cars and trucks. They are dramatically increasing the quantity of food humans produce and improving the reliability of the food supply, directly benefiting human health. Further, fossil fuel emissions are possibly contributing to a “Greening of the Earth,” benefiting all the plants and wildlife on the planet.

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).

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.

Impacts of the Natural Gas and Oil Industry on the U.S. Economy in 2015
https://www.heartland.org/publications-resources/publications/impacts-of-the-natural-gas-and-oil-industry-on-the-us-economy-in-2015
This study, conducted by PricewaterhouseCoopers and commissioned by the American Petroleum Institute, shows that the natural gas and oil industry supported 10.3 million U.S. jobs in 2015. According to the Bureau of Labor Statistics, the average wage paid by the natural gas and oil industry, excluding retail station jobs, was $101,181 in 2016, which is nearly 90 percent more than the national average. The study also shows the natural gas and oil industry has had widespread impacts in each of the 50 states.

What If … Hydraulic Fracturing Was Banned?
https://www.heartland.org/publications-resources/publications/what-if-hydraulic-fracturing-was-banned
This study is the fourth in a series of studies produced by the U.S. Chamber of Commerce’s Institute for 21st Century Energy. It examines what a nationwide ban on hydraulic fracturing would entail. The report’s authors found by 2022, a ban would cause 14.8 million jobs to “evaporate,” almost double gasoline and electricity prices, and increase natural gas prices by 400 percent. Moreover, cost of living expenses would increase by nearly $4,000 per family, household incomes would be reduced by $873 billion, and GDP would be reduced by $1.6 trillion.

What If … America’s Energy Renaissance Never Happened?
https://www.heartland.org/publications-resources/publications/what-ifamericas-energy-renaissance-never-actually-happened
This report by the U.S. Chamber of Commerce’s Institute for 21st Century Energy examines the impact the development of shale oil and gas has had on the United States. The report’s authors found that without the fracking-related “energy renaissance,” 4.3 million jobs in the United States may not have ever been created and $548 billion in annual GDP would have been lost since 2009. The report also found electricity prices would be 31 percent higher and gasoline prices 43 percent higher.

The 100 Percent Renewable Energy Myth
https://www.instituteforenergyresearch.org/wp-content/uploads/2019/02/Renewable-Myth-Policy-Brief219.pdf
This Policy Brief from the Institute for Energy Research argues that a countrywide 100 percent renewable plan would put the U.S. economy in jeopardy. The brief investigates the intermittency, land requirements, capacity factors, and cost of transition and construction materials that limit the ability of the U.S. to adapt to 100 percent renewable energy.

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.

 

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.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact George Jamerson, Heartland’s government relations director, at gjamerson@heartland.org or 312/377-4000.