Inside the US shale crisisOctober 8, 2020
New York (CNN Business)Banning fracking would kill tens of thousands of jobs in Pennsylvania, Ohio and Texas — three states at the heart of the 2020 race for the White House.
That’s why Joe Biden has explicitly opposed a nationwide ban on the controversial oil-and-gas drilling technique, even though climate activists want to save planet by banning fracking.
It’s also why President Donald Trump has repeatedly claimed otherwise. It happened again during Wednesday night’s debate when Vice President Mike Pence misleadingly said Biden wants to “ban fracking.”
Both campaigns know that voters in battleground states rely on the oil-and-gas industry for their livelihoods. And those votes could very well decide next month’s election.
“Fracking is really important to white, working class voters — especially in the key swing state of Pennsylvania,” said Ed Mills, Washington policy analyst at Raymond James.
Pennsylvania, the state that FiveThirtyEight says is most likely to provide the decisive vote in the Electoral College, is home to the Marcellus Shale formation, America’s largest natural gas field.
‘Severe’ impact on jobs
Even though oil and gas prices are depressed and layoffs have been widespread, the industry remains a major employer.
As of June 2019, shale operators, pipeline companies and service companies together employed nearly 32,000 people in Pennsylvania, according to a New York Times analysis of Bureau of Labor Statistics data.
“A ban on fracking would have an immediate and severe impact on an industry that has already been kicked in the teeth,” said Jeff Bush, president of CSI Recruiting, an oil-and-gas recruiting agency.
Biden’s past comments have added to confusion over the issue. During a July 2019 debate on CNN, Biden was asked if there would be any place for fossil fuels, including coal and fracking, in a Biden administration.
“No, we would — we would work it out,” Biden said. “We would make sure it’s eliminated and no more subsidies for either one of those, either — any fossil fuel.”
However, Biden’s written plan never included an outright ban on fracking and he has since explicitly opposed such a ban. That sets him apart from more progressive presidential candidates, including Senators Elizabeth Warren and Bernie Sanders. Rather than a total fracking ban, Biden has consistently proposed a more moderate step: banning new oil and gas permitting on public lands and waters.
And Biden wants to achieve net-zero emissions by no later than 2050, a goal that would almost certainly require a significant reduction in fracking.
“It’s a perfect example of who Joe Biden is,” Mills said. “He supports a longer-term transition away from fossil fuels, but is not going to rush to get it done and harm workers in the near term. Joe Biden is a transitional candidate in every single sense of the world.”
Climate activists knock Biden, Harris
Pence correctly noted that Senator Kamala Harris, Biden’s running mate, favors a fracking ban.
During a September 2019 CNN town hall, Harris said there is “no question I’m in favor of banning fracking,” starting with public lands.
“That’s important because she would be one heartbeat away from being president,” said Bob McNally, president of consulting group Rapidan Energy Group.
But during Wednesday night’s debate, Harris repeated Biden’s stance, not her own. “Joe Biden will not end fracking. He’s been very clear about that,” Harris said.
Those comments caused Harris to draw fire from climate activists, who argue that fracking should be banned because it contributes to the climate crisis.
“We were glad to hear Kamala Harris call for a vision of the future rooted in science, and plan to get to net zero emissions by 2050,” climate group 350.org said in a statement after the debate. “However, we still have a ways to go to hold Biden and Harris accountable to a bold climate action that is steadfast in its commitment to phasing off fossil fuels and halting the bad business of fracking.”
Fracking isn’t just a major employer in Pennsylvania. The Marcellus shale formation also lies in Ohio, a battleground state that CNN Politics classifies as a toss-up.
“Ohio seems to be more in play than anyone would have anticipated. Maybe Texas is in play,” Mills said.
Texas, which CNN Politics classifies as “leans Republican,” is home to the Permian Basin, one of the most prolific oilfields on the planet. Fracking in the Permian Basin drove unprecedented growth in US oil production.
The Obama-Biden oil boom
In 2018, the United States overtook Russia and Saudi Arabia to become the world’s largest oil producer for the first time since 1973. That feat allowed the Trump administration to claim victory for energy dominance.
However,the shale boom began long before Trump took office. The United States became the world’s top producer of natural gas in 2009 after rapid growth during the Bush administration.
And the Obama-Biden administration presided over a 72% spike in US oil production, according to the Energy Information Administration. By comparison, US oil output is up 18% since Trump took office.
“When you listen to Mike Pence, you would think shale happened on Trump’s watch,” said Helima Croft, head of global commodity strategy at RBC Capital Markets. “Biden was there for this massive explosion of the industry.”
Gas as a bridge fuel, geopolitical tool
Croft, a former CIA analyst, said Biden’s continued support for fracking, and natural gas in particular, serves three objectives: electoral, climate and geopolitical.
The electoral support is simple math: He needs to win support from moderates in Western Pennsylvania.
“They need Conor Lamb’s voters,” Croft said, referring to the conservative Democrat who won election in 2018 in a district Trump won by 20 points in 2016. (It’s no coincidence that Lamb sits on the Biden-Sanders climate task force.)
But unlike Sanders, the Biden camp still sees natural gas as a bridge fuel that can help the United States wean off its addiction to fossil fuels. Banning fracking would sharply reduce America’s excess supply of gas. Although solar and wind costs have plunged, renewable energy alone can’t power the United States, at least not yet.
“The Biden view is you still need gas as a transition fuel,” Croft said.
US natural gas can also be used as a geopolitical tool against Russia, the world’s biggest gas exporter.
For instance, Biden is expected to take a tougher stance on Russia by stepping up opposition to Nord Stream 2, the nearly complete gas pipeline that will only strengthen Russia’s grip on Europe’s energy supply.
“Gas and US exports align with Biden’s geopolitical agenda of countering Russian influence,” Croft said.
Banning US fracking would eliminate an alternative to that Russian gas.
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