Brenda Shafer
Vice President Kamala Harris' evolving rhetoric on fracking has become a key issue in the current U.S. presidential campaign. Just five years ago, Harris pledged to ban fracking, the drilling technology that helped make the United States the world's largest producer of oil and natural gas. Now, the Democratic candidate says she supports fracking, a shift many political analysts attribute to the political importance of winning Pennsylvania's electoral votes. Pennsylvania is a major center for natural production through fracking in the United States.
The problem extends far beyond Pennsylvania, however. It also has a huge impact on the U.S. economy and the energy security of the United States and its allies. Additionally, fracking can also be subject to indirect restrictions without a formal ban. In fact, the Biden-Harris administration has limited fracking through indirect means, such as imposing special taxes on natural gas production and halting new exports of liquefied natural gas (LNG). So the question for Vice President Harris should not be will you stop fracking, but will you continue the Biden-Harris administration's policies of curbing natural gas production and raising production costs.
To be sure, whether Harris will stick to her 2019 pledge to “ban fracking” has to do with Pennsylvania, widely seen as the most important battleground state and home to 20% of U.S. natural gas production. Fracking supports more than 100,000 jobs for Pennsylvania residents and generates more than $40 billion in revenue for the state. There's no doubt that Harris' views on fracking will affect her electoral prospects in the Keystone State.
However, restrictions on the production of natural gas through fracking also affect all Americans. Beginning in the early 2000s, natural gas production through fracking increased significantly, significantly reducing electricity and heating costs in the United States. This gives the United States a significant competitive advantage in manufacturing, attracting many companies to move to the United States from Europe and other regions with higher energy costs.
Fracking has made the United States a net exporter of natural gas, bringing in revenue and creating jobs. The United States becoming the largest natural gas producer and the world's largest exporter of LNG also has significant geopolitical implications, allowing the United States to guarantee reliable gas supplies to allies and enabling developing economies such as Pakistan to obtain natural gas as a replacement coal. Europe was able to survive several winters as U.S. LNG exports surged and natural gas supplies dwindled following Russia's invasion of Ukraine.
The Biden-Harris administration has imposed broad restrictions on U.S. natural gas production as part of its climate agenda but stopped short of explicitly banning fracking. These measures raise costs, making U.S. natural gas production less attractive to invest in. As part of the restrictions on natural gas, the Biden-Harris administration imposed a “methane” tax (methane is the main component of natural gas) as part of the administration's signature climate law, the Inflation Reduction Act of 2022. Additionally, the government has implemented a slew of new regulations on methane that have added layers of bureaucracy to natural gas production, increasing costs and causing production delays.
In an effort to win over younger voters by boosting its climate credentials, the Biden-Harris administration in January stopped issuing new licenses for LNG exports to countries that do not have free trade agreements with the United States and therefore require federal approval. In July, a federal court overturned the ban, but no new licenses have been issued since. Almost counterintuitively, banning LNG exports could lead to longer-term price increases in the U.S. natural gas market, because without new exports to back up demand, some investors may flee, leading to a possible decline in U.S. production
Additionally, the Biden-Harris LNG export ban raised questions about whether the United States can be considered a reliable supplier; several potential customer countries subsequently signed new import deals with Qatar and Oman. Even if the ban is lifted in the future, the decision will shock international natural gas markets, as importers understand that changes in U.S. government or policy could put their energy supplies at risk.
Low natural gas prices are critical to lowering inflation and maintaining U.S. manufacturing dominance. Natural gas prices affect the cost of nearly all products because natural gas is the primary source of electricity in the United States. In addition, natural gas is a raw material for fertilizers, so rising gas prices will lead to higher food costs.
So the real question to ask Vice President Harris is whether she will continue the Biden-Harris policies and taxes that impact natural gas production and exports. This is important to America, not just Pennsylvania. It's not just about Pennsylvania jobs, it's also about inflation and the trajectory of the U.S. economy.
Professor Brenda Schaeffer is a faculty member at the U.S. Naval Postgraduate School, a senior advisor for energy at the Foundation for Defense of Democracies, and a senior fellow at the Atlantic Council's Global Energy Center.
This article was originally published by RealClearEnergy and provided via RealClearWire.
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