How To Trigger A Global Recession In One Easy Step: Ban Fracking
https://www.realclearenergy.org/articles/2019/11/08/how_to_trigger_a_global_recession_in_one_easy_step_ban_fracking_110489.htmlIn a time long ago, seven years this month, President Obama and candidate Mitt Romney sparred in their second debate over the extent to which Obama deserved credit for increasing America’s oil and natural gas production. Three years later President Obama would, without fanfare, sign epic legislation reversing a 40-year-old petroleum export ban.
The United States used to be the world’s biggest importer of oil. Now, for the first time since 1949, the U.S. is a net exporter of petroleum thanks to fracking technology. America’s new role in global energy markets has already blunted others using energy as a geopolitical weapon.
So, what would happen if America’s next president were to make good on a promise to ban fracking? We know the answer.
Enthusiasms for alternatives aside, solar and wind combined supply less than 2 percent of world energy, while 54 percent still comes from oil and natural gas. Many analysts have pointed to the domestic jobs and revenues that will be lost were America to shut down fracking. But that’s the least of it. Far more significant: removing that quantity of fuel from world markets would trigger the biggest energy price spike in history, and a global recession.
We know that because history has witnessed the effect of similar amounts of oil suddenly taken from markets for political reasons. During the infamous 1973 Arab oil embargo, a share of oil trade comparable to what a frack-ban would cause, was taken off the market by the Saudis. That episode drove world oil prices up over 350% and triggered a global recession. Again in 1979, a similar loss to energy markets happened when Iran’s Mullahs revolted and that nation’s exports collapsed. That event caused a 200% global price spike and triggered another recession....
