Quantcast

California Moves to Ban Fracking—as Gas Prices Hit 3-Year High

California’s proposed ban on fracking comes as global demand for energy is increasing...

(Jon Miltimore & Brad Polumbo, Foundation for Economic EducationCalifornians often serve as test subjects for progressive policies.

With its latest proposed ban, the Golden State may end up serving as a cautionary tale.

“Answering the call of Gov. Newsom, Democratic California lawmakers introduced a bill to ban fracking by 2027, in the fifth largest economy in the world,” Fox Business reports. “The bill, from Democratic state Sens. Scott Wiener of San Francisco and Monique Limon of Santa Barbara, would prohibit new fracking permits or renewals by Jan. 1, 2022, while also banning permits within 2,500 feet of homes or schools.”

“Fracking,” which is short for “hydraulic fracturing,” is the process of drilling into the earth and blasting components—a mixture of water, sand, and chemicals—into shale rock to retrieve gas and oil.

...article continued below
- Advertisement -

Fracking has been instrumental in the recent energy renaissance in America, which saw the US become the world’s top producer of oil and sharply reduced prices of fossil fuels. A 2020 New York Times article described fracking as “an economic savior” for Rust Belt states that arrived as the US economy remained in free fall amid the Great Recession.

While some might think of fracking as new, it’s not. As the Independent Petroleum Association of America points out, fracking has been employed in the United States since the 1940s. Since then, the process has been used to create 1.7 million wells, from which more than 600 trillion cubic feet of natural gas and seven billion barrels of oil have been extracted.

As Justin Wolfers of the left-leaning Brookings Institution has explained, the economics of fracking are not complicated. The process vastly simplified the extraction of fossil fuels, which made production less expensive and therefore reduced prices.

“Overall that makes consumers better off,” Wolfers explained.

...article continued below
- Advertisement -

How much better off? Quite a bit.

“The US fracking revolution has caused natural gas prices to drop 47 percent compared to what the price would have been prior to the fracking revolution in 2013,” Brookings concluded in a 2015 paper exploring the economic benefits of fracking.

So why does anyone want to ban such an economically beneficial practice?

The primary concerns about fracking are environmental. The author of the new ban, California State Senator Scott Wiener, argues that “Extracting massive amounts of oil — particularly with destructive techniques such as fracking — is totally inconsistent with California’s commitment to a sustainable climate future.”

Yet the innovative practice of fracking has actually helped reduce CO2 emissions, by hastening a switch away from coal-generated power, which emits substantially more greenhouse gases than natural gas. The Hillreports that “since 2005, natural gas has prevented more than one billion metric tons of carbon dioxide from being emitted from power plants in the United States.” And banning fracking would simply result in more foreign oil tankers being brought into California, experts warn.

Opponents also cite alleged water contamination and other environmental concerns as reasons to ban fracking. But as I explained in a 2020 article in National Review, an abundance of research suggests these concerns are largely unfounded.

Some might say these concerns still warrant intervention. But it’s important to understand California’s ban would come with serious costs.

The fossil fuel industry supports roughly 366,000 jobs state-wide, according to Fox Business. California Assemblyman Vince Fong warned that the state’s regulatory move would “devastate the local economy” and “destroy careers in California.”

There’s little doubt that California’s ban would place thousands of livelihoods in jeopardy. But the reality is that the effects would go well beyond those employed in the industry—and well beyond the Golden State.

After a year of quarantines, closures, and cancelations, many Americans are likely eager to get back on the road and enjoy spring break and summer vacations.

Unfortunately, they’ll be doing so at an expensive time.

A new federal report shows that gas prices are expected to average $2.78 per gallon from April to September. As The Star Tribune notes, that’s more than 30 percent higher than last year and the highest since 2018. And Energy Information Administration Acting Administrator Steve Nalley says all signs suggest gasoline prices will continue to rise as travel picks up post-pandemic.

A ban on fracking in California would make oil, and therefore gasoline, even more expensive. As Investopedia explains, “Hydraulic fracturing has helped boost the rate at which oil and gas can be extracted from wells, particularly in the United States. By increasing the current available supply, fracking helps to lower oil prices on a global scale. This is particularly true domestically, since oil does not have a historically strong local market in the U.S.”

To be clear, California’s proposed ban, should it pass, may not result in higher prices at the pump this summer. The prohibition on new fracking permits and renewals would not go into effect until next year, and it’s unclear how futures markets would respond to such a move.

But the California legislation banning a key energy innovation comes at a time when we’re witnessing a global increase in the demand for energy and skyrocketing energy prices. Restricting fracking won’t really help the environment, but it will cost many Californians their jobs—and stick Americans with bigger energy bills when they can least afford it.

Politicians meddling in markets should never be taken lightly. History is replete with examples of government interventions in energy markets that led to disastrous results.

For example, in 1971, President Richard Nixon implemented price controlson gasoline, oil, petroleum products. These controls, kept in place by his successors, were the primary cause of the 1970s energy crisis, in which gas stations ran dry and people waited in their cars for hours in long lines to fill up.

California lawmakers fortunately don’t have the amount of power Richard Nixon did. And they may genuinely believe (unlike Nixon) they are simply designing a better, cleaner world by banning fracking. But they’d do well to make sure they aren’t doing more harm than good.

“Almost nothing matters more to our lives,” wrote Alex Epstein in The Moral Case for Fossil Fuels, “and the lives of billions of others around the world than the existence of cheap, reliable energy.”…Original Source

- Advertisement -

TRENDING NOW

Campus Free Speech Rankings: Over 80% of Students Self-Censor Their Viewpoints

(TheFire.org) Prospective students who want to make sure that their free expression will be protected should consider Claremont McKenna College or the University of...

Illegal Aliens in NC Commit 131 Sex Crimes Against Kids in August

North Carolinians for Immigration Reform and Enforcement released its August 2021 "Child Sex Crimes by Illegals in NC" report and found that authorities arrested...

Maricopa Co. Supervisor Secretly Criticized Colleagues Who Opposed 2020 Election Audit

(Headline USA) A Republican official in Arizona resigned Tuesday from the board overseeing Maricopa County after a recording emerged of him criticizing his GOP colleagues...

House Dems Pass Bill to Suspend Debt Limit for Socialist Spending Spree

(Associated Press) The House voted to keep the government funded, suspend the federal debt limit and provide disaster and refugee aid, setting up a high-stakes...

Trump Sues New York Times, His Niece for $100 Million Over ‘Personal Vendetta’ Against Him

(Associated Press) Former President Donald Trump on Tuesday sued his estranged niece and the New York Times over a 2018 story about his family's...

White House Faces Bipartisan Backlash Over Border Crisis

(Associated Press) The White House is facing sharp condemnation from Democrats for its handling of the influx of Haitian migrants at the U.S. southern...

Biden’s Economy is Worse than Global Economic Experts Expected

(Casey Harper, The Center Square) – A major international economic forecasting group has now lowered its optimism about a U.S. rebound from the COVID-19...

Texas Ups Funding to Combat Smuggling, Drugs Coming Across the Border

(Bethany Blankley, The Center Square) – Texas Gov. Greg Abbott said Tuesday the state will allocate an additional $100 million to enhance Operation Lone...

John Kerry’s Wife Has Millions of Dollars Invested in China

Climate change envoy John Kerry’s wife has millions of dollars in Chinese investments through her family’s trust, according to government documents. Kerry disclosed the investments...
- Advertisement -