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Paul Junge — one of several Republican candidates looking to unseat U.S. Rep. Elissa Slotkin, D-Holly — touts fracking as a boon to Michigan’s economy and is attacking Democratic presidential nominee Joe Biden for his stance on the energy extraction method. On his campaign website, Junge claims moderate Democrats like Joe Biden have endorsed a ban on fracking, which would eliminate 516,000 Michigan jobs and reduce the state’s gross domestic product by $159 billion over five years. Hydraulic fracturing, or fracking, is a method of releasing oil and gas from shale rock underground by injecting water, sand and chemicals. It has provided an economic boost for some areas of the Midwest, but environmental officials and advocates are concerned about its impact on local water supplies , air pollution and greenhouse gas emissions . Michigan, home to the large Antrim Shale formation, has not seen significant uptake of fracking activity. Voters may have a chance to decide whether it can continue at all if advocates of a fracking ban succeed in reviving a proposed ballot initiative. Polls suggest voters are divided on the issue. Many Democrats have been critical of fracking on environmental grounds and call for a shift away from fossil fuels, but Junge, a former TV news anchor, exaggerates both Biden’s position on fracking and the impact banning fracking would have on Michigan’s economy. Joe Biden’s position on fracking While Biden has called for a ban on new permits for fracking on federal land and waters, he has not supported a ban on fracking on private or state land. As evidence for the claim, Junge’s campaign provided the transcript of a March 2020 Democratic debate in which Biden said no new fracking, and then added, no more drilling on federal lands. Following the debate, a Biden campaign spokesperson clarified that Biden wants a ban only on new fracking activities on federal lands and waters. PolitiFact rated a Facebook claim that Biden announced on CNN he will completely shut down drilling for oil and natural gas on day one of his administration as Mostly False. The economic impact of banning fracking in Michigan The Junge campaign said that a ban on fracking would eliminate 516,000 Michigan jobs. The Bureau of Labor Statistics shows that only 1,577 workers in Michigan were employed in natural-gas extraction, oil and gas drilling, and related support activities in 2019. David Foster, a former Energy Department official and distinguished associate at the Washington-based Energy Futures Initiative, notes that the data does not differentiate between fracking and conventional oil and gas production. A supplemental survey conducted for a report on energy employment in the U.S. that Foster wrote found an additional 1,600 people involved in natural-gas fuels in Michigan. This includes professional services jobs, such as accountants, primarily servicing the oil and gas activities identified by the Bureau of Labor Statistics data. Taken together, the oil and natural-gas sector employs fewer than 3,200 workers in Michigan. While fracking may not employ many workers in the state, home heating needs and energy-intensive manufacturing in Michigan make the state’s economy sensitive to changes in the energy market. Still, it is unlikely a ban on fracking would cost the state’s economy more than 500,000 jobs and billions of dollars in economic activity over the next five years. The job- and GDP-loss estimates cited by Junge come from a report by the Global Energy Institute at the U.S. Chamber of Commerce in Washington. The institute uses an economic-impact analysis model to measure how employment and economic activity statewide would change as a result of a ban on fracking. The analysis makes several assumptions to arrive at the job and GDP figures. First, it assumes that a ban on fracking would result in higher energy prices for consumers and businesses, forcing them to spend more on energy and less on other items such as household goods or investment. Second, it assumes there won’t be any major structural shift in the U.S. energy market over the next five years except for this increase in energy prices. Third, it assumes the higher prices would create some windfall effect for select producers, boosting some households’ income and spending power. But researchers are skeptical of using such a model to analyze the potential macroeconomic impact of a fracking ban on a state’s economy. Tim Bartik, senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, believes the institute’s analysis makes unrealistic assumptions that overstate the impact of a ban on fracking. The method assumes that neither consumers nor businesses would adapt to any price increases. As Bartik explains, this would mean that no one adjusts to the banning of fracking, except that prices go up to allocate the reduced supply of energy, the extra funds spent on energy then apparently disappear to Mars, and this reduction in income, in turn, reduces demand mechanically for all other goods and services. The authors of the institute report said the economy eventually would adjust to higher prices, but evidence of that adjustment would not appear until several years after a ban. By then, they predict, the U.S. economy would tank, suffering more than a 10% reduction to employment and economic output with the loss of 19 million jobs and $7.1 trillion in GDP. Michigan alone would take a five-year hit to its GDP that amounts to a third of its 2019 economic output, they estimate. These are some incredible numbers, Bartik said. Our ruling Junge said, Even so-called moderate Democrats like Joe Biden have endorsed a ban on fracking, which would eliminate 516,000 Michigan jobs and reduce the state’s gross domestic product by $159 billion over five years. Biden miscommunicated his stance in a debate, but the campaign clarified his position, which the Junge campaign is distorting. Biden supports a ban on new fracking on federal lands and waters, not a total ban. Meanwhile, the job and GDP loss projections Junge cites come from an analysis that researchers say overstates the impact of a ban on fracking. The campaign did not respond to a request for further comment. We rate this statement Mostly False.
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