The transformation of the U.S. energy market created by the new extraction techniques for oil and gas has some predicting a renaissance for U.S. manufacturing based on lower, stable energy costs. In today’s Policy Initiative Spotlight, Renewing America contributor Steven J. Markovich examines those claims and argues that the impact will likely be modest.
The United States is experiencing a boom in oil and natural gas production. High global oil prices and new technologies have spurred the development of unconventional sources such as deepwater oil drilling and hydraulic fracking. The rapid adoption of these new extraction techniques has roiled energy markets, and the environmental effects are still being determined. But will they improve U.S. competitiveness?
According to the Energy Information Administration (EIA), in the past three years domestic production increases have outpaced demand increases. Domestic crude oil production increased 5.9 percent, while demand only increased 0.2 percent. During this period, world oil prices rebounded after crashing with the start of the recession; oil futures are trading at more than double their price in January 2009.
Oil trades on a global market, so a surge in domestic production is unlikely to shrink oil prices in the United States, or increase national competitiveness. Additionally, many unconventional U.S. sources of oil are only economical with high prices. Natural gas is a regional, not a global market. As a gas at normal temperatures and pressures, natural gas is difficult to trade overseas, so prices are more localized.
According to the EIA, the United States produces over 90 percent of the natural gas it consumes, and imports most of the remainder by pipeline from Canada. Liquefied natural gas (LNG) does allow global trade, but that technology requires substantial infrastructure investment in specialized terminals to chill natural gas until it becomes a liquid. The United States currently has few LNG terminals, and LNG was responsible for less than 1 percent of the U.S. market.
Imo, Markovitch is a Globalist hack that you would EXPECT would criticize and downplay ANY USA energy efforts because he’s writing FOR the Council on Foreign Relations, –a Globalist Group that probably endorses the Georgia Guidestones, a reprehensible edifice of Elitist, Fascist (imo) Terror, along the lines of Heinrich Himmler and Hitler’s “Final Solution,” only WORSE. WHY NOT have the USA have 120% domestic use of shale-gas if Coal is going to be prevented from use here in the ‘States? Oil experts are confident that energy prices will go down, with more domestic production, and if it didn’t, wouldn’t it STILL be better to have the money for gas & oil use to go to a USA firm, with US jobs HERE, rather than building more mosques here and finding HAMAS and other groups flush with Arab (ex-OUR dollars) cash, to visit MORE Terror HERE? Actually, the Globalists know that if the USA were an OPEC-nation, the dollar would be sound, our deficits payed-down, and millions would benefit, HERE, from USA energy employment. Nations don’t choose Globalist Governance in “boom”-times, but “bust”-times, so the CFR, desiring World Soviet-style Socialism, WANTS the USA weak, broke, –”desparate”–RUN by the Elites of the BildeBORGers, CFR, and Tri-laterals, whose governmental puppets are Clintons, O’Bama, Schumers, Feinsteins, Pelosis, and even the Bushes. The Shell oil spokesman, is a Corporate-Globalist, imo, where he stupidly advises FOR funding the U.N. with the restrictions and the regulations (un-constitutional) via the LOST treaty. Shell is, imo, an Arm of the Dutch Crown, whose “Queeg” is a BildeBORGer, so Globalist-politics infects Corporations, in addition to “Poxing” most Royals.