This week, Kristin Hayes talks with Daniel Raimi about how the presidential candidates in this election cycle are talking about fracking: what the reality of a fracking ban or other regulatory legislation would look like; the impact a ban would have on jobs, the economy, and the environment; and how references to fracking have come to signal the broader stances and attitudes that candidates take toward the environment.
This episode of Resources Radio is part of our Candidate Tracker mini-series that accompanies RFF’s new online interactive tool. The Candidate Tracker has been developed to compare and contrast the positions of the 2020 presidential candidates from both major political parties on a range of climate- and energy-related topics. We hope Resources Radio can serve as a great venue for some deeper-dive analysis on several issues under discussion by the candidates; listeners will continue to see episodes posted over the next few months in this mini-series.
Listen to the Podcast
Top of the Stack
- The Ezra Klein Show with podcast guest Kate Marvel
- "Acknowledging uncertainty impacts public acceptance of climate scientists’ predictions" published in the journal Nature Climate Change
- "Getting Real on the Economic and Environmental Impacts of the Shale Revolution" by Daniel Raimi
The Full Transcript
Kristin Hayes: Welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Kristin Hayes. My guest today is Daniel Raimi, a man who will need no introduction for our regular listeners, but for those of you who might be new to the podcast this week, Daniel is a senior research associate here at RFF. His research has primarily focused on the shale revolution in the United States, but he brings a wealth of experience on topics related to climate impacts, global energy outlooks, and a number of other important energy and climate related topics. He's also the other regular host of Resources Radio, so his is a voice that will sound familiar to you. I'm very glad he could join us on the podcast today to talk about fracking, and in particular, to talk about how the presidential candidates in this election cycle are talking about fracking. Stay with us.
Daniel, thank you for coming back as a guest on Resources Radio, where you are a familiar voice, but it's always nice to have you on the proverbial other side of the microphone.
Daniel Raimi: Thank you. Thank you, Kristin. Listeners would have been thinking, maybe they've gotten a break from me, but no, I'm back.
Kristin Hayes: No, never. That's right.
Daniel, we are here today to talk about fracking, which is an issue, I know, is near and dear to your heart. But this time I just want to remind our listeners that we're talking about fracking in the context of our mini podcast series related to RFF’s Candidate Tracker. And again, the candidate tracker is available on our website at www.rff.org/candidatetracker/. And I will note that this is the second podcast in this mini series and the first aired on October 15th, so feel free to check that one out as well.
But it is a pleasure to have you back for this second episode of the series, and again to focus on fracking.
Daniel Raimi: Thank you so much. I'll try to keep up the high standard that Joe Aldy sent in the first episode, which, which I really enjoyed.
Kristin Hayes: That sounds great. All right, let's talk fracking. A number of the candidates have stated positions related to fracking, but before we really talk about those specifics of what the candidates are saying, I do want to ask you some more basic questions about shale gas development writ large. So first an age-old question, but I think an important reminder—what are the candidates talking about when they use the term fracking?
Daniel Raimi: That is an excellent question and I do not know the answer. So, I've done a lot of work on fracking and oil and gas development more broadly. People use all sorts of terms when it comes to kind of modern oil and gas development. In the United States, the large majority of new oil and gas development that's taking place involves hydraulic fracturing or fracking. So there's a technical definition for what hydraulic fracturing is, and that is, it's the injection of large volumes of water, typically mixed with sand and a small percentage of chemicals, deep underground into a rock formation that is either made up of shale or some other tight or impermeable rock formation. So the hydraulic fracturing fluid goes deep down underground. It creates fractures in the rock, and those fractures allow a natural gas and/or oil to flow into the well and then up to the surface. So that's kind of the technical definition of fracking. It's really only one of many steps that takes place for companies to produce oil and natural gas using today's modern technology in the United States. And when candidates use the term fracking, sometimes they appear to be referring to the specific thing that I just described. And then at other times they appear to be talking about the entire oil and gas industry sort of writ large, or the entire upstream of the gas industry.
And so we often have to ask that question of, you know, what do they mean when they say fracking? And the answer, I think, changes depending on the context. And the regulatory response that you might take also matters when we're thinking about this terminology. So policymakers could very well limit fracking, or oil and gas development more broadly, by regulating things that are not fracking. So for example, a policymaker might choose to have really, really strict regulations on methane emissions from oil and gas wells. I'm not talking about the rules that the Obama administration had previously, but maybe much more strict, much more stringent standards. And so if you had really stringent standards on methane emissions or, let's say, water use or water management associated with hydraulic fracturing, that might have the effect of limiting fracking without actually regulating it directly itself. And that's largely because the federal government essentially has very little authority to actually regulate fracking. And I know we'll talk some more about that in the next few minutes.
Kristin Hayes: Yeah, no, I think that's a perfect lead into another, I think, very important baseline question. As these presidential candidates talk about regulating fracking in its many definitions, I would love to talk more about what levels of government regulate fracking, in what ways. In other words, what does it mean for a presidential candidate to be talking about federal authority in this area? Is that meaningful? Do they have jurisdiction? What does that look like?
Daniel Raimi: Yeah, so when we're talking about the specific activity of hydraulic fracturing, the federal government has very little, maybe no authority to really limit or ban that activity under current law. So the 2005 Energy Policy Act exempted hydraulic fracturing from regulations under the Safe Drinking Water Act. There has been a lot of discussion of that provision under the 2005 Energy Policy Act. It's quite controversial. My view is that that exemption that was put into law in 2005 didn't have a big effect at the time, because the federal government wasn't regulating fracking before 2005 and it still wasn't regulating fracking after 2005. But what that provision in the Safe Drinking Water Act does now is, it really ties the hands of the federal government in a pretty meaningful way, such that they don't have regulatory tools through the EPA to permit or restrict fracking that's taking place in different states around the country. And so, the existing regulatory framework is that state governments are really the ones who have most authority when it comes to oil and gas development, including fracking and other activities associated with the oil and gas production. State governments really take the lead. There are some states where localities, like cities or counties, also have some authority. But for the most part, the states are in the driver's seat unless we're talking about federal lands or federal waters.
Kristin Hayes: Okay. So if I can summarize the answers to those two baseline questions, we find ourselves in a position where the presidential candidates are talking about regulating a process that they haven't necessarily fully defined, in the context of campaigning at least. And also they're talking about it in a way that potentially implies that they have more authority than they necessarily do, at least given current statutes. Maybe that's a bit of a harsh characterization, but it does seem like we're in a situation where it would be important to parse out what some of those authorities are, and we can talk about that a little bit further in terms of what these presidential candidates could actualize as they talk about their proposals. So let's move into that, how they're talking about fracking. First, what broad themes emerge to you? Are there any surprises? Are there any outliers among the presidential candidates, related to the way they think and talk about fracking?
Daniel Raimi: Yeah, so there are several different positions. There's a spectrum of positions, I would say. On one side of the spectrum, we have President Trump who's very pro-fracking, very pro-oil and gas, very pro-coal as well. You know, the president gave a speech in Pittsburgh a couple of weeks ago at a natural gas industry conference where he really touted the industry. He talked about the economic benefits associated with shale development. He talked about some of the environmental benefits of shale gas development. I think some of those claims were perhaps a bit exaggerated. The president, you know, sometimes claims credit for the growth in oil and gas production that's happened in the US and you know, there are lots of factors behind the growth of oil and gas production in the US—the president is certainly not at the top of that list, when we think about reasons why there has been growth in oil and gas production in the US.
But nonetheless, the president is very supportive of the industry. He's taken a variety of actions to reduce or weaken or roll back entirely regulations that the previous administration had tried to implement, dealing with things like methane emissions, for example, or regulation on federal lands of oil and gas development. So that's probably one side of the spectrum. The other side of the spectrum is, you know, several Democratic candidates for the nomination, such as Senator Bernie Sanders, Senator Elizabeth Warren, Senator Kamala Harris. They have all used the word ban when it comes to their positions on fracking. And I think that those candidates understand that a fracking ban would require legislation. They might not say it every time that they're giving an answer in a debate, you know, they have limited time, they want to make an impact on their potential voter pool. So they're not going to get into the details of the legal niceties or ramifications, but they've clearly articulated the idea that they want to ban fracking on public lands as well as private lands across the United States. So those are probably the two poles. And then there are some candidates who are in the middle, who clearly support additional regulations on fracking in oil and gas development, as well as restrictions on new oil and gas development on public lands, but are not all the way in favor of a full fracking ban. So the candidates who occupy that position would be Vice President Biden, Senator Klobuchar, Mayor Pete, from Indiana. And the terminology that these candidates use are all different, but those are kind of the broad strokes of the positions that they've taken out.
And I guess, you know, none of these positions strike me as all that surprising. In the Democratic party, there's a pretty strong appetite for action on climate change. Fracking has a complex relationship with climate change—we've talked about that on a previous podcast episode. There are some positives associated with increase in natural gas production, but there are also a variety of negatives associated with both natural gas and oil production. But I think fracking has been a sort of useful catchall, it's a term that presidential candidates can use as a signal to their constituents that they are serious about environmental issues and serious about climate change. Fracking, for better or worse, is not a very appetizing sounding word. It sort of has a negative connotation. It sounds like a four letter word that we can all think of. And so when you say you oppose fracking or you want to ban fracking, whether or not voters understand all the details of your position, I think they sort of hear, oh, this person is serious about climate and they're serious about the environment. And I think that's one of the big signaling devices that candidates are using, at least in the Democratic Party.
Kristin Hayes: Yeah, just a quick followup question on that. How much of that signaling—again, I think you make a good point that it's sort of a proxy for general concern for a number of environment, energy, climate-related issues. But if I can ask you to sort of parse out, how much do you think a ban on fracking is in fact a nod towards dealing with climate change versus other environmental issues that, quite frankly, I think have been more on the minds of people who actually are in close proximity to fracking—related to water quality and air quality and health impacts and a number of other environmental challenges. So do you have any thoughts on what the balance is between the various signals that are being sent by a potential fracking ban?
Daniel Raimi: Yeah, that's a great question. And the public concerns over fracking, I think they’ve evolved a little bit over time. In the early days of shale development, particularly in Pennsylvania, and when the film Gasland came out, I want to say 2011, the bulk of the concern was really about water quality and how all this new development was going to affect water quality around the country. There are impacts of oil and gas development on water quality or at least potential impacts that we've seen, but they haven't been, you know, maybe at the scale that some people were concerned about early on. And so as time has gone by, I think public concern around fracking, particularly among anti-fracking advocates, of which there's a pretty healthy constituency out there, they have really turned to focus more on climate change risks. There's been a lot of discussion of methane emissions from natural gas in oil systems, which is a really important topic. And so, when the candidates talk about banning fracking, I think they're nodding to both the local concerns that people have about water—potential water contamination, as well as potential health risks from living close to oil and gas operations. But they're also nodding to climate concerns and the idea that to achieve the kind of ambitious climate targets that many of the candidates have laid out, such as reaching net zero emissions by 2045 or 2050, you know, that almost certainly means a substantial reduction in consumption and hence, production of oil and natural gas. And so I think they're kind of nodding at both sides of that equation.
Kristin Hayes: Right. And that really does point to the fact that when candidates, by the climate logic at least, when candidates are talking about banning fracking, they might actually really mean banning shale gas development, not the actual process of fracking, and any concerns around water quality that might come with that. So perhaps there's sort of a revealed reality of what candidates are talking about, as well, when they talk about bans.
Daniel Raimi: Yeah, and I would just add to that, a lot of times when people talk about fracking, there's an association between fracking and natural gas or shale gas. But when we think about fracking these days, it's really more of an oil story than a natural gas story. And it really has been for a little while. So if you look at just the number of drilling rigs that are out there in the United States these days, most of them are focused on oil and most of them are using hydraulic fracturing to get at that oil. So when we talk about a fracking ban, we're really talking about both natural gas and oil.
Kristin Hayes: Yeah, yeah. Big chunks of the economy potentially in play here. So a little bit more on bans, and I want to harken back to our earlier conversation about jurisdictional authority as well. Let's say a candidate like Senator Sanders or Senator Warren did in fact come into office and he or she decided to implement a fracking ban. How would such a thing come to pass? You mentioned that new legislation would be needed at the federal level if this were to be actualized on any broad scale. So yeah, how would such a thing happen, in your educated opinion? And then also, can you speculate a little bit about what the implications of that might be?
Daniel Raimi: Sure. So if a president were able to pass a fracking ban through Congress, I think that would be a really monumental hurdle, just, you know, given the structure of our of our legislature, particularly the Senate. It is fairly hard to imagine that actually happening in the world that we live in today—who knows though, you know, politics can change quickly. And so they would definitely need legislation to actually do this. And if a fracking ban were to be passed, then the timing of that ban becomes really important. If fracking were banned or you know, new oil and gas development were banned tomorrow, that would have an extremely disruptive effect on a variety of different parts of the economy. The more likely scenario that I could imagine would be, you know, if this thing were actually to happen, which is as we've stipulated, pretty unlikely in the first place—but if it were to happen, I would imagine that it would have to be phased in over some period of time, you know, maybe five years or something like that. The effects of an actual or de facto fracking ban in the United States would mean higher oil prices, here in the United States and globally—recent estimates from Lutz Kilian and some other scholars have estimated that the US shale boom has reduced global oil prices by about 10 percent over the last five years or so. So you could expect at least a 10 percent bump, I would expect probably a little bit more, at least in the short term. Natural gas prices would increase substantially more. Researchers like Ryan Kellogg and Katherine Hausmann have estimated that the shale boom has reduced natural gas prices by more than 60 percent in the United States.
And so this is largely because oil is traded globally, where as natural gas is mostly traded within the United States. So the effects in the United States would be sort of more directed and more immediate. So you could expect a natural gas price spike of, you know, 60 percent. I would think probably even more than that at this point, given the fact that natural gas prices have been consistently under $3 for the last several years. I think we'd see a big spike in gas prices. In the short term, again, depending on the timing over which the ban was implemented, over the short term, we would almost definitely see a resurgence in coal fired electricity generation. That is if there were no other policies addressing coal. One of the things that's complicated here is that if a president were able to get a fracking ban through Congress, they almost certainly would also be able to get some other stuff through Congress dealing with climate change.
Kristin Hayes: Other climate legislation in particular?
Daniel Raimi: Yeah. Which would probably limit the ability of coal to make a comeback. But if we're talking about sort of a standalone fracking ban, then one would expect coal to benefit substantially from that. And then just a couple more impacts over the sort of medium term, 5 to 10 to 20 years; I think we would expect nuclear and renewables to benefit substantially. We would see more investments in energy efficiency, not least because energy prices would go way up, and so people would have a much stronger incentive to invest in efficiency. You know, in terms of local impacts, the places where this oil and gas boom has been happening—West Texas, parts of North Dakota, Oklahoma, New Mexico, Pennsylvania, et cetera. You would see really dramatic negative economic effects, particularly for rural regions where the boom has really sort of reshaped the economy of some of these places.
And I think there would need to be really serious attention paid to how to support those communities and support the workers who would be displaced by any type of fracking ban. And then the last thought is, if a fracking ban were to be implemented quickly in a way that was super disruptive, I can imagine the political ramifications of that being potentially pretty extreme. You know, a place like North Dakota that relies on oil and gas production for roughly half of its government revenue. Oklahoma, Texas, Wyoming—where oil and gas is a huge part of the economy—I could imagine really vigorous political opposition. And I would actually sort of worry about the stability of some of those regions. If you were to do a fracking ban that was like, really kind of hamfisted and took place over a really short period of time, I can imagine lots of social disruption.
Kristin Hayes: Yeah, and I do think that this question of how workers will transition out of industries that are in fact being driven to change by policy decisions is at the heart of so much of the debate around climate policy and the Green New Deal. And I'm sure policymakers are considering that as they think about these policies. But I think it's also good to challenge candidates to make sure they have a plan for any consequences of a potential policy choice they make. So in your view, how much do the candidates positions reflect the views of their prospective constituents on this topic? In other words, do they sort of take a populist view around fracking, shale gas development, shale oil development, or do the stances that candidates are taking represent more niche constituencies, more of the outliers on the political spectrum than the middle? Do you have any thoughts on that?
Daniel Raimi: Yeah, so I haven't looked at a lot of public opinion data recently on fracking, but you know, it is certainly the case that for a lot of political issues, it's the vocal minority that really drives drives policymakers to signal on issues like fracking or other controversial topics, potentially heated topics. And so I think that certainly on the left, there's a very vocal constituency that is very anti-fracking, where that is one of the very top issues for them. And if you think back to the 2016 presidential cycle at the Democratic convention, there were a variety of delegates on the floor who were sort of chanting, you know, “ban fracking now” as a way to sort of get their message across to Secretary Clinton, who was the nominee and who did not favor a ban on fracking at the time.
And so, I think on the left there's definitely some motivation to reach out to that very vocal group that is very anti-fracking. On the more conservative side of the spectrum, I think there's a similar dynamic going on where fracking is not the number one priority for most Republican primary voters or voters who might be predisposed to support President Trump. But it can again play a signaling role, and be one of those issues that is quite important to a relatively small portion of the electorate. And then the policymaker can also signal to that broader base that they are in favor of oil and gas playing a big role in the economy going forward, by just saying, you know, “I love fracking and we want to promote fracking,” kind of simple phrases like that. So, I think they're mostly speaking to the niche constituencies, but I think there's also some bleed over into the broader electorate that just kind of gets these signals along the way.
Kristin Hayes: Sure. Well, I do want to circle back to President Trump and his support for oil and gas development, as well as coal production, as you've mentioned. And maybe I'll just close the sort of substantive portion of this by asking if President Trump or potentially other Republican nominees who might also lean towards either at least support and potentially expansion of oil and gas production; if that's the trajectory that we're on, then tell me more about what shale gas and shale oil development in the US might look like in a world where there's federal support for that activity.
Daniel Raimi: I think it looks pretty similar to what it has looked like over the last five years. You know, sometimes I've done talks and people will ask questions about the role that the Trump administration's regulatory rollbacks might have on the industry, and I think they might have some effect around the margin. But when we're talking about onshore US oil and gas development—which is primarily what we're talking about when we're talking about fracking—there's really not that much more the federal government needs to do to encourage oil and gas operators to get out there and invest. The technologies have improved so much over the last 15 years and particularly over the last, you know, five or six years, that companies are now able to profitably drill wells for prices that they would not have been able to just a few years earlier.
And so the technological development in the industry has really been pretty astounding, and it's really what has driven the growth in production in the US—it hasn't been sort of a set of regulatory changes or a set of attitudes from the public. It's really the technology that's driving the way. And as long as oil and gas prices remain at relatively stable levels—I mean, they're pretty low today, right? Natural gas prices are extremely low. Oil prices are quite low as well. Despite the fact that there are a variety of geopolitical risks that are out there in the world, and yet oil production continues to grow in the United States. We're continuing to produce more than 12 million barrels of oil per day, which is more than the US has ever produced. The US is becoming a net exporter of crude oil and petroleum products, combined, not of crude oil. We still import quite a bit more crude oil than we export. But when you combine crude and refined products like gasoline and diesel, those lines are really starting to converge and we're starting to become a net exporter. And so I think if you were to see a loosening of regulations or opening more federal land, more federal waters to oil and gas development, it might have some positive effect for production over the medium to long term. But I think really what's driving this train is technology. And the main thing that could slow it down are the types of bans that we've been talking about, or potentially other climate policies that don't focus on the supply side, but instead focus on the demand side—reducing demand for fossil fuels across the economy in a way that would end up redounding and negatively affecting the producers of oil, natural gas, and coal.
Kristin Hayes: Well thanks, Daniel. That's a really helpful overview of some potential futures that we as an economy might experience, depending on how candidates move forward in this election cycle. And then of course as you wisely pointed out, what policies they could actually get passed once in office. But this has been a really helpful overview, a good regrounding in this topic and then a good reflection on how it fits into the current political dialogue as well. So I really appreciate you taking the time to talk to me. I did want to close with Top of the Stack because we always close with Top of the Stack.
Daniel Raimi: What would we be without it?
Kristin Hayes: Exactly. So I would invite you, certainly if you have something on the top of your stack that you would like to mention to our listeners, please feel free to do so. I also do have something at the top of mine, which I'm also happy to share, but I'll turn the floor over to you if you have anything you'd like to mention.
Daniel Raimi: Sure. So I'll just mention two quick things. One of them is a podcast. So as soon as you're done listening to this podcast, you can go check it out. It's an episode of the Ezra Klein podcast and I don't normally listen to it, but there were a variety of recommendations from people I respect, pointing out this really cool interview that Ezra Klein did with Dr. Kate Marvel, who is a climate scientist and a really great sort of science communicator and climate communicator. And it's kind of like a master class on how to be a really good climate communicator, I think. So I would definitely recommend checking that out. And then the other thing along similar lines on climate change, is a paper that I just downloaded, and it's on my metaphorical stack because it's on my desktop, on my computer, but it's a new article in Nature Climate Change called “Acknowledging uncertainty impacts public acceptance of climate scientists' predictions.” And it's a paper by Lauren C. Howe and several other coauthors, including Robert Socolow, and it's a paper about how, when climate scientists talk about climate change, how much do they include the uncertainties that are kind of embedded in a lot of the modeling exercises and the uncertainties that exist, like the physical earth system that we still haven't totally figured out, and about how including those uncertainties when discussing climate change affects sort of the public perception or the credibility of those communicators. So, I actually haven't read that yet. But it sounds fascinating, so I'm looking forward to checking it out.
Kristin Hayes: That sounds great. Thanks for those recommendations. And I just wanted to put in a plug as well. This is in fact, literally on the top of my stack because somehow I managed to print it out on overly sized legal paper. So it's sitting here very prominently. But I wanted to recommend to our listeners, one of your recent blogs. I hope I get the title right, but I believe it's called “Getting Real on the Economic and Environmental Impacts of the Shale Gas Revolution in the United States.” Something like that.
Daniel Raimi: Yeah, I probably said shale revolution cause I put the word gas after shale so much these days.
Kristin Hayes: Okay. And somehow also in my giant print out, the full title did not show up. So my apologies. But thanks for clarifying that. And I did really enjoy your reflections on some of the administration's recent reporting on the impacts of the shale revolution in this country. And I think you have some good insights about what parts of that we might want to listen to, and what parts we might want to challenge. And so yes, I would certainly recommend that to the listeners as well.
Daniel Raimi: Thanks, Kristin. They’re going to be super sick of me by the end of this.
Kristin Hayes: No such thing. Also something that we were talking about just as we were beginning this podcast, that is wholly unrelated to shale but is nonetheless a recommendation that's on my mind is the movie Yesterday. Daniel, you know, you and I have a long history of talking about music, as well as talking about energy and climate change. And yeah, given recent references to the Beatles music, I thought of the movie Yesterday as a wonderful encapsulation of what makes the Beatles and their music so special and a great soundtrack for life. So I would encourage anyone who hasn't seen it to go check it out, mostly just to steep yourself in the wonderful Beatles sounds for an hour and a half and maybe shed a few tears along the way. So, great. Well Daniel, thank you again. It's always nice to have you as both a host and a guest, and I'm sure I will talk to you again very soon.
Daniel Raimi: Thanks Kristin, I enjoyed it.
Kristin Hayes: You've been listening to Resources Radio. Thanks for tuning in. If you have a minute, we'd really appreciate you leaving us a rating or a comment on your podcast platform of choice. Also, feel free to send us your suggestions for future episodes. Resources Radio is a podcast from Resources for the Future. RFF is an independent nonprofit research institution in Washington DC. Our mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. Learn more about us at rff.org. The views expressed on this podcast are solely those of the participants. They do not necessarily represent the views of Resources for the Future, which does not take institutional positions on public policies. Resources Radio is produced by Elizabeth Wason with music by Daniel Raimi. Join us next week for another episode.