A report released in December 2019 by the Global Energy Institute at the U.S. Chamber of Commerce details how a ban on hydraulic fracturing (colloquially known as “fracking”) would have devastating consequences for the Ohio economy and would displace “hundreds of thousands of jobs” throughout the state.
According to the study, if a fracking ban took place, the Buckeye State would experience the cumulative loss of 700,000 jobs thanks to higher residential and business energy costs and upstream production losses, as well as $245 billion in lost gross domestic product (GDP) and a $20.6 billion loss in state and local tax revenues by 2025. Over that same period, Ohio households would experience a $119 billion loss of income and Ohioans would suffer a per capita cost-of-living increase of $5,625.
These losses would naturally begin taking effect immediately. In 2021 alone, the study estimates 155,000 job losses, $18 billion in lost GDP, $1.49 billion in lost state and local tax revenue, and a $9 billion loss in household income.
A 2020 report from the American Petroleum Institute (API), with modeling data from the consulting firm OnLocation, has unemployment numbers in Ohio due to a fracking ban that mirror GEI’s study, with 500,000 lost jobs in 2022 alone.
The development of the Utica shale play in Ohio has turned the state into the fifth-largest producer of natural gas in the United States. This massive increase in domestic shale development, led by fracking, has caused natural gas prices to plummet in Ohio, saving state residents and businesses more than $40 billion from 2006 to 2016, according to a September 2018 study from the Consumer Energy Alliance. This is backed up by a September 2019 report prepared by Kleinhenz & Associates for the Ohio Oil and Gas Energy Education Program, showing total savings thanks to fracking for Ohio residents from 2008 to 2018 amounts to $45 billion.
Additionally, the oil and natural gas industries supported more than 262,000 jobs in Ohio in 2015, according to a 2017 API study prepared by PricewaterhouseCoopers.
Hydraulic fracturing activity delivers $1,300 to $1,900 in annual benefits to local households, including “a 7 percent increase in average income, driven by rises in wages and royalty payments, a 10 percent increase in employment, and a 6 percent increase in housing prices,” according to a 2019 study conducted by researchers at the University of Chicago, University of Illinois at Urbana-Champaign Princeton University, and the Massachusetts Institute of Technology.
Hydraulic fracturing enables the cost-effective extraction of once-inaccessible oil and natural gas deposits. These energy sources are abundant, inexpensive, environmentally safe, and can ensure the United States is the world’s largest energy producer well beyond the 21st century. Therefore, Ohio policymakers should refrain from placing unnecessary burdens on the natural gas and oil industries, which are safe and positively impact the Buckeye State economy.
Tim Benson serves as a policy analyst in The Heartland Institute's government relations department. He previously worked as a writer and editor for the Foundation for Government Accountability.
Editor's Note: This piece originally appeared on The Heartland Institute.