Colorado stands to lose billions of dollars in tax revenue and suffer massive job losses if the state bans fracking, or technically hydraulic fracturing, according to a research by Leeds School of Business at University of Colorado Boulder.
The study estimates losses of $12 billion in Gross Domestic Product and 93,000 lost jobs, if the state goes ahead to enact the proposed bans on fracking into law. Within the first five years after the ban, 68,000 jobs will be lost, while GDP will be reduced by $8 billion.
The losses for the state and local governments are also enormous. The research estimated that the local and state governments will lose tax revenue worth $985 million between 2015 and 2040.
“It would be devastating, there’s just no way around it,” Weld County Commissioner Sean Conway told the Coloradoan. “I don’t think people would have a clue of the ripple effect it would have.”
The economists used the new dynamic modeling system that is being applied by economic development organization to calculate the economic impact of various changes in public policy, such as fracking ban.
Hydraulic fracturing, a controversial oil and gas extraction method that has drawn the ire of environmentalists, involves pumping a mix of fine sand, chemicals and water at high pressure deep underground in order to release oil and gas trapped in the rocks.
The method has always been used in the United States for at least 60 years, with more than 90 percent of the existing oil wells fracked.
The study also pointed out that job cuts would extend to companies that supply the extraction industry with equipment, underscoring how fracking has embedded itself into the state’s economy.
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