The Quixotic Struggle Against the Coming Energy Revolution
As explained in Ride the Wave, the Trends editors expect the unfolding North American Energy Revolution to catalyze the next phase of the Digital Revolution and thereby unleash an unparalleled wave of global affluence.1 The potential benefits are becoming more and more apparent. But, in spite of the expected economic bonanza it will deliver, there are still opposing voices.
Ultimately, however, reality and pragmatism will drown out the critics of the emerging, cheaper energy sources. Nevertheless, they can delay implementation and potentially shift benefits away from North America to other parts of the world.
To understand what's going on, let's examine some of the key players, their arguments, and the merits of those arguments.
Let's start with the powerful combination of horizontal drilling and hydraulic fracturing (fracking) which has recently made it highly cost-effective to extract natural gas and oil from shale. After two decades of development, these two technologies are enabling companies to tap into resources that have essentially been "inaccessible" up until now.
According to Philip Verlerger of the Peterson Institute for International Economics, fracking is creating "the biggest change in energy in almost 100 years — a revolution." Consider what's already happened in the United States:2
- In the past four years, production of shale gas has increased by 500 percent.
- From 2008 to 2012, overall production of domestic natural gas rose 20 percent.
- The Potential Gas Committee, an industry group, recently revised its U.S. gas resources estimate from three years ago, increasing it by 26 percent. These reserves could provide 90 times what the United States uses in a year.
- Crude oil production also increased between 2008 and 2012, growing by 30 percent.
- An International Energy Agency (IEA) report released in mid-May 2013 speculated that U.S. oil production would grow by 3.9 million barrels a day between 2012 and 2018—that's equivalent to eliminating all oil imports except those from Canada.
This boom in energy will also trigger a boom in the economy. As explained in the April 2013 issue of Trends, the North American Energy Revolution will create 21.8 million new jobs in less than 10 years, as follows:3
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