Thursday, 12 April 2012 11:56
April 12, 2012
A shifting energy landscape in the U.S. could have far-reaching repercussions over the next few decades, experts say.
The U.S. has undergone a marked shift in its policies toward energy generation and drilling over the past 10 years. While so-called energy independence has long been a goal of the U.S. – President Richard Nixon expressed his desire to achieve it during his tenure – it has become increasingly more realistic thanks to advances in engineering research and development.
Hydraulic fracturing, more commonly known as fracking, serves as one of the most significant and compelling examples of how such breakthroughs can reshape energy policy. An uptick in fracking throughout the U.S. over the past few years has helped fuel the nation's output of natural gas. Thanks in large part to fracking, the U.S. is now the world's largest producer of the hydrocarbon, which has helped decrease costs.
The New York Times reports that cheaper fuel produced domestically is helping cut manufacturing, shipping and heating and cooling costs. It is also fueling job growth, as oil and gas companies actively recruit workers in such states as Texas, North Dakota and Pennsylvania, where fracking and other drilling operations have grown significantly over the past decade.
The ongoing development of the nation's oil and gas drilling sector could also hamper U.S. efforts to improve renewable energy technologies, scientists say. Moreover, they note that while a jump in domestic oil and natural gas production would likely help lower prices over the long term, many experts are concerned about the negative environmental effects that could result from an increase in traditional fossil fuel energy generation.
Nevertheless, independent researchers and private companies have continued to push forward in their work to improve oil and natural gas extraction methods. Fuel prices have soared since the beginning of the year, and economists and public officials have warned that continued upward pressure on prices could hurt the nation's economic recovery, which has sputtered along in the wake of the worst economic contraction since the Great Depression.
As a result of such factors, the Obama Administration has approved drilling operations in some regions of the U.S. that experts previously said held limited accessible stores of fossil fuels. Advances in fracking and horizontal drilling, however, have enabled companies to tap into such hydrocarbon deposits.
What's more, private firms have also increasingly tapped into vast oil supplies contained in Canada's oil sands and deep underwater in the Gulf of Mexico. Such drilling activity has helped both the U.S. and Canada become the world's fastest-growing sources of new oil supplies.
Exxon Mobil chief executive Rex W. Tillerson said in a speech recently that the energy sector could be entering a new period of development, particularly as the U.S. and Canada overtake traditional energy giants such as Saudi Arabia and Russia.
"The transformation unfolding in North America represents a potentially decisive shift in the history of energy," he said in Houston last month.
A growing number of industry experts and scientists are echoing such an assertion. Citigroup global commodity research head Ed Morse asserted the changing energy landscape in North America could impact not only oil and gas prices, but also geopolitics.
"The reduced vulnerability of North America – and the world market – to oil price spikes also has deep consequences geopolitically, including the reduced strategic importance to the U.S. of changes in oil- and natural gas-producing countries worldwide," according to Morse. "Pressures towards isolationism in the U.S. will likely grow, with consequences for global stability that can only just begin to become understood."
Environmentalists are continuing to push the Obama Administration to bolster support for sustainable energy initiatives. However, as voters continue to push for immediate relief from volatile energy prices, the U.S. is growing more and more bullish on domestic fossil fuel production.