A government report released Tuesday throws cold water on claims that fracking could solve America’s labor market woes–and the findings didn’t even account for the possibility of environmental catastrophes.
The Congressional Budget Office predicted that the exploitation of so-called shale resources will only increase Gross Domestic Product 0.66 percent by the end of the decade and 1 percent by 2040.
It also said that fracking should increase federal tax revenues 0.75 percent by 2020 and 1 percent twenty years after that.
In an appendix, the CBO noted that it did not account for “the future environmental consequences of shale development.” It said that empirical reports detailing potential pitfalls “so far are not comprehensive enough” and that “future consequences could differ from past ones because of the increasing scale of shale development.” The report also said that it could not predict “future technological and regulatory developments.”
The relatively tame prediction resulted from the report’s assumption that, in the long-run, “additional labor and capital used to produce shale resources or energy-intensive goods will mostly be drawn away from the production of other goods and services.”
Fracking would have the largest long-run impact on an industry level, according to the report. The CBO said that the price of natural gas would be roughly 70 percent higher in 2040 “if shale gas did not exist.” It said that shale oil, however, is only expected to lower the overall price of oil by about 5 percent.
During his 2012 State of the Union address, President Obama claimed that fracking would lead to the creation of 600,000 jobs in the US by 2020. A DeSmogBlog report, however, said this prediction was based on an industry-funded study produced by the American Petroleum Institute, and that natural gas price fluctuations have led to lower levels of jobs than touted by supporters of fracking.
Read the CBO report here.
