Oil industry innovations like hydraulic fracturing and horizontal drilling have opened up entire universes of new energy reserves in the United States. Shale oil and shale gas, previously not reachable, are flowing to market.
“The shale revolution has quickly and completely remade America’s energy landscape, leaving us in a much stronger position, both economically and geopolitically, than where we found ourselves just a decade ago,” writes Walter Russell Mead.
Cheap energy is key for economic growth, and a glut of natural gas is leading to a kind of small renaissance in American manufacturing, especially in energy-intensive industries. More fracking means more gas, lower prices, and growth potential for firms that use that gas. And then there’s the geopolitical aspect of the shale boom …
America is poised to become the world’s top liquid petroleum producer, supplanting perennial hydrocarbon powerhouses like Russia and Saudi Arabia. Where just a decade ago we were busy building liquified natural gas (LNG) import terminals, now we’re busy converting those facilities to handle exports, and the possibility of opening up crude exports has entered the American energy discussion.
What’s ironic about that is the shale-oil and shale-gas revolution – that’s really what it is – has come during the administration of a President who is demonstrably hostile to fossil fuel development.
Obama apologists are quick to point out that oil production has risen under his administration, as though the President’s policies had anything to do with it. Oil production has actually declined on federally-controlled lands, where President Obama gets the most say. Where America’s booming oil and gas production has thrived is on state-regulated lands, like much of North Dakota and Texas.
It seems the political left is doing everything they can to hurt domestic oil and gas production. From the campaign against fracking to obstruction of pipelines, it’s clear they want to undermine U.S. fossil fuel energy.
Ironically, though, Obama has benefitted from this. Even as his administration continues a left-wing regulatory assault on fossil fuel production, oil and gas production have boosted the national economy. Not just through exploration, drilling, and pumping but through the domino effect on the rest of the economy.
As Mead notes, cheaper gas means cheaper power. Cheaper power means a more efficient economy. A more efficient economy means more opportunity and prosperity for everyone.
Of course, it’s hard to see that impact in America right now with a stagnating economy (outside of the direct-impact areas of energy development like North Dakota), but can you imagine how much worse things would be if we didn’t have an oil and gas energy boom going on in the United States right now?
I’d go so far as to say that Obama might not have been elected to a second term absent the economic impacts of oil and gas development.