(CN) – Warning of the proposal’s economic impacts, the head of the nation’s largest oil and gas lobbying group says his organization is taking very seriously the prospect that a future Democratic president could ban or severely limit fracking in the U.S.
“The fracking ban hasn’t just been introduced by an obscure congressman from Vermont, this fracking ban has been introduced by the leading presidential candidate on the Democratic side of the isle,” American Petroleum Institute President Mike Sommers said at a press event Thursday at the group’s Washington, D.C. headquarters.
Sommers was, of course, referring to Bernie Sanders, the current frontrunner in the 2020 Democratic primary race who last month introduced the Fracking Ban Act in the Senate alongside a companion House bill from Congresswoman Alexandria Ocasio-Cortez, D-N.Y.
The legislation, which has drawn the support of leading environmental groups like the Sierra Club, Earthworks and Greenpeace, would shut down hydraulic fracturing on federal lands and ban the use of the technology altogether in 2025.
“It’s past time the government puts the people before corporate polluters,” the Sierra Club’s executive director Michael Brune said in a statement endorsing the bill when it was announced.
Though it’s unlikely any sitting U.S. president could unilaterally ban all fracking – doing so would take an act of Congress – the industry isn’t taking the idea lightly.
Sommers said Thursday the API will roll out a digital ad campaign against the proposal targeting voters in certain battleground congressional districts and states. The campaign is accompanied by an analysis the group commissioned on the potential economic impacts of banning fracking both on federal lands and across the country.
The report, based on computer modeling methods used by the federal Energy Information Administration, suggested a ban would kill millions of jobs and make the U.S. once again heavily dependent on foreign energy imports.
A fracking ban would lead to 7.5 million lost jobs in 2022, raise household energy costs by an average of $618 per year and would likely trigger a nationwide recession, the report said.
Democrats have countered those economic fears by suggesting that oil and gas workers could be retrained and placed into other well-paying industries as the U.S. moves away from fossil fuels in favor of cleaner forms of energy.
Sanders’ bill specifically calls on the federal government to provide fossil fuel workers with a “just and fair transition” away from the industry by creating “new, high-wage, unionized, green jobs.” Proponents of a “Green New Deal” have pushed for the same kind of job transition programs.
While the API warns of dire consequences from a fracking ban, the effects would not necessarily immediately cripple the nation’s energy economy, as the vast majority of American oil production comes from private land in Texas that would not be directly impacted by the Sanders bill until 2025.
In a February report, analysts at the energy consulting firm Wood Mackenzie found that banning fracking solely on federal lands would, at a maximum, cut U.S. oil production by about 750,000 barrels per day by 2025. The nation would still be producing about 12 million barrels per day after that reduction, the firm said.
The estimates don’t account for Alaskan oil production and assume existing wells on federal lands would be allowed to continue flowing.
“It really looks like it would have kind of this one-off big impact,” Wood Mackenzie analyst Elena Nikolova said in an interview. “So let’s say [Sanders] comes into office and immediately institutes a ban, assuming he’s able to do that, there’s going to be kind of a one-time shock, but then the market recalibrates.”
Even with the outcome of the 2020 election far from certain, some oil companies have started planning for the possibility of a Democratic crackdown on the industry.
Their response could be as simple as hopping state lines.
“We’ve heard from several operators, including Matador, Concho and Cimarex, who would be affected on federal land in New Mexico, that they’re positioned to be able to pivot their activity from New Mexico to Texas,” said Julie Francis, another Wood Mackenzie analyst.
At least one of the region’s top oil producers, Diamondback Energy, has already fled federal land as a precaution.
The company announced in February it had successfully traded the majority of its New Mexico acreage for holdings in West Texas, a move that means less than 0.1% of the company’s net acreage is now on federal land.
API officials at Thursday’s event said they were taking the fracking ban proposals seriously and would continue to push the oil and gas group’s message to voters as the primary season continues.
“We’re not taking anything for granted,” said Frank Macchiarola, the group’s top policy advocate.