My latest in the Wall Street Journal.
Joe Biden is probably telling the truth when he says he won’t “ban” fracking. A president can’t do that by executive order. And even if Democrats seize the Senate, a legislative ban would be politically risky. Far more likely is that a Biden administration would end fracking via indirect means, by taking a regulatory nibble here and a legislative bite there.
While Mr. Biden has flip-flopped on fracking, he has consistently pledged to outlaw drilling on federal lands. That would affect 8% of all U.S. oil production, 9% of gas production, and 6% of natural gas liquids production. He has also committed to reversing President Trump’s deregulatory efforts, including the rollback of an Obama administration Environmental Protection Agency rule requiring the oil-and-gas industry to pay to limit methane leaks from fracking wells.
Big oil companies support the Obama rule because it puts the squeeze on smaller players. If the rule is reinstated, struggling independent frackers will either close up shop or sell themselves to larger companies, whose profits have been harmed by a production glut. With the ability to control and limit overall production, those larger frackers could reduce the glut and increase their profits. There would be less fracking—and higher energy prices for consumers.
The rest of the Biden administration’s antifracking playbook would mimic the Obama administration’s destruction of 94% of the market value of the coal industry from 2011-16. Making good on a campaign promise to bankrupt utilities that wanted to build coal plants, Mr. Obama’s EPA issued air-quality rules that made existing coal plants too expensive to operate. Another rule banned new coal plants unless they were built with nonexistent technology to capture and store emissions.
The Obama Interior Department also issued a rule prohibiting coal mining within a certain distance of streams, preventing underground miners from using efficient long-wall mining technology, and dramatically raising operating costs. The Labor Department tightened dust standards in mines, further raising costs for underground coal miners.
These attacks on mining operations and coal customers by unaccountable and uncontrollable regulatory agencies, combined with the gusher of natural gas from fracking, crushed the coal industry, sending all the major producers into bankruptcy.
Congress was too divided to do anything about this while it was happening. By the time the Supreme Court got around to freezing some of the rules pending review, Gina McCarthy, Mr. Obama’s EPA administrator, was chuckling to the media that the damage to the coal industry was already done.
The only hope the oil-and-gas industry would have in a Biden administration is that there is no substitute for fracking. Power plants could switch out of coal and into natural gas during the 2010s, but they won’t be able to switch out of natural gas and back into coal during the 2020s. On the other hand, American politics are more irrational now than they were during the Obama years. And it isn’t clear that Biden administration regulators would care about relevant realities.
A fracking ban? No. Death by a thousand cuts? Bank on it.
Mr. Milloy publishes JunkScience.com, served on the Trump EPA transition team, and is author of “Scare Pollution: Why and How to Fix the EPA.”
October 20, 2020 at 09:55PM