Issues 2020: Fracking Ban Would Trigger Global Recession

In addition to destabilizing international markets, a fracking ban would increase reliance on coal

NEW YORK, NY – Candidates for the 2020 Democratic presidential election have made headlines calling for a ban on fracking in the U.S. But proponents of the ban overlook the massive destabilization that such a ban would trigger, both domestically and internationally. A new issue brief by senior fellow Mark Mills, as part of the Manhattan Institute’s Issues 2020 series, argues that a U.S. fracking ban would spur the biggest oil and natural gas price spikes in history, which would, in turn, tip the world into recession.

A U.S. ban on fracking, the extraction of oil and gas through horizontal drilling and hydraulic fracturing, would eliminate 7% of world oil and 17% of world gas supply. Considering that changes of even 1-2% in the supply/demand balance trigger huge price swings in this global commodity market, a 7% loss would be similar to that of the infamous 1973 Arab oil embargo—which drove world oil prices up by 400% and triggered a global recession. An American fracking ban would lead to similarly disastrous economic results and injure sensitive geopolitical dynamics.

Fracking ban advocates point to alternative energy sources—particularly wind and solar—as potential replacements. But considering that oil and gas together supply 54% of global energy, and wind and solar together supply only 1.8%, such a solution is unviable. Instead, to keep the lights on, electric utilities would need to quickly replace natural gas (currently 35% of all electricity) with coal—which would mean burning an additional 400 million tons of coal a year.

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About Issues 2020

The Issues 2020 series applies the Manhattan Institute’s breadth and depth of expertise on major issues of national public policy to the key arguments and proposals of the 2020 presidential campaigns. MI scholars identify where the central claims driving key debates reflect fundamental misunderstandings about what is happening in America. With succinct explanations of what the data show, they provide a much-needed corrective and a solid foundation for political debates about the nation’s future. Click here to read more.