Increased natural gas and oil production is about to make the U.S. energy self-sufficient and a global leader in energy production, but at the potential cost of investment in renewable resources and increased environmental risks, is it still worthwhile?
According to a recent release from the International Energy Agency (IEA), as reported by Yahoo! Finance, “the U.S. could become self-sufficient in energy by 2035 and a net exporter of natural gas by 2020.” In the press release, IEA Executive Director Marian van der Hoeven stated: “North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency.” Initiatives started during the Bush administration and carried forth by President Obama have resulted in an increase of oil production in the U.S., a decrease in oil imports, and a boom in drilling for natural gas. In fact, the U.S. now has a 100-year supply of natural gas at hand, and increased production has already resulted in a variety of benefits, which begs the question: what will become of renewable resource industries like wind and solar power in the face of a more immediate and easy solution?
In October, the U.S. unemployment rate climbed to 7.9% and the increase in gas production has and could continue to lead to increased employment in transportation and construction industries. According to a recent article from Reuters, billionaire investor Wilber Ross predicts “800,000 new U.S. jobs over the next few years as a result” and energy consultant IHS reports that “shale drillers alone currently support 1.7 million high-wage U.S. jobs, a figure that is expected to grow to 2.5 million over the next three years.” Natural gas also has investment benefits as a cheap raw material for chemical and fertilizer makers, which could lead to increased manufacturing in the U.S. as opposed to foreign companies, which have been at the receiving end of such investment for the past few years. However, not every increase in production is a good one . The U.S. is already struggling to deal with a lack of skilled laborers and engineers, which could put a halt to increased production before it begins or at least create inefficiencies and shortcomings in the market. Further, while an increase in production could create opportunities for engineering managers, it could also create growth at the risk of other energy fields like wind and solar power that transcend personal gains.
Increased natural gas and oil production has the immediate benefit of removing dependence from Russia and the Middle East, but it could come at the cost of serious environmental risks. By 2017, the U.S. will be the largest oil producer in the world, which creates a threat to renewable energy industries, including the already precarious wind sector. (Click here for our insider report on the issue.) By creating short term benefits, more government spending might be cut from more forward-thinking solutions, and as Director van der Hoeven suggested, the potential need for natural gas might diminish as other countries continue to invest in other forms of energy. While the U.S. doesn’t want to run the risk of falling behind in developments for a short term solution to a much bigger problem, the immediate benefits are certainly more tantalizing in times of economic struggles, though the EPA might have the final say when reports on the environmental risk of fracking are released later this year.
What do you think? Is there a way to balance the immediate and long term benefits? Can U.S. investors be convinced of a long-term solution instead of short term game? Weigh in with your opinion today!