Matthew Kandrach – President, CARE
January 8, 2020
New Mexico is a testament to the economic power of horizontal drilling, or fracking. Advances in this revolutionary technology have allowed companies to develop oil and gas resources that were previously not economically viable in the state. As a result, New Mexico is one of the country’s leading producers of natural gas and oil.
But on the heels of what is nothing short of an energy-producing renaissance that has resulted in huge tax benefits for New Mexico citizens, a small but growing number of anti-fracking activists in several states are seeking to limit fracking in favor of solar and wind power.
The extent to which unquestioned faith in solar and wind has risen to the accepted norm was driven home recently by anti-fracking statements from two current and one former presidential candidate. Elizabeth Warren, Bernie Sanders and Kamala Harris (who has since dropped out) said that if elected they would clamp a national ban on fracking. Also, 400 environmental and citizen activist groups have sent a letter to the United Nations urging the General Assembly to push for a global ban on fracking.
A recent report from the U.S. Chamber of Commerce’s Global Energy Institute concluded that a ban could cost New Mexico 142,000 jobs and eliminate $86 billion in cumulative gross domestic product through 2025. The state would also lose $8 billion in state and local tax revenues during that time, it found.
The author H.L. Mencken once said that for every complex problem there’s a solution that is simple, neat and wrong. The anti-fracking zealots pose the issue as how best to reduce greenhouse-gas emissions. But banning fracking is nonsensical. Fracking has enabled the U.S. to become the world’s largest producer of oil and natural gas, while also helping to reduce carbon emissions.
Shale production has bolstered the nation’s economy and created millions of jobs. For New Mexico, the benefits have been massive. State tax revenue from oil and gas production reached a record $2.2 billion in 2018, according to an analysis by the New Mexico Tax Research Institute. Much of the money has gone to taxpayers to support public education, higher education and to health and human services programs.
Thanks to the shift from coal to natural gas at power plants around the country, gas has surpassed coal as the dominant fuel for electricity production — and as a result, carbon dioxide emissions in the U.S. have fallen to mid-1990’s levels. In fact, the U.S. is leading the world in carbon mitigation.
In short, the switch to gas has had a much bigger impact on the drop in carbon emissions than the deployment of renewables such as wind and solar.
Relying on solar and wind power to supply base-load electricity that’s available on demand seems more promise than reality — and will remain so until technology is developed for large-scale energy storage on days when the sun isn’t shining and the wind isn’t blowing. Natural gas is the backup fuel to compensate for the intermittency and unreliability of wind and solar power.
Gas usage is being encouraged all over the world. Because we now have an abundance of natural gas due to fracking, U.S. companies are exporting liquefied natural gas to Asia, where countries are using it as fuel at power plants to reduce air pollution and carbon emissions.
The evidence shows that fracking has been a huge success. Even states like New York and Maryland that have banned fracking have joined in its benefits through job creation and stronger local economies in counties adjoining states where fracking is flourishing.
Real, as distinguished from fantasy, solutions to evolving energy needs must respond to basic facts and rest on economic principles. The irrefutable facts are that fracking has led to a dramatic drop in carbon emissions, lower energy costs, job creation in New Mexico and U.S. leadership in energy production.
