The U.S. Shale Revolution: Global Rebalancing?
Alfaro, Laura;Vietor, Richard H.K.;White, Hilary
Harvard Business School
Beginning less than a decade ago, the U.S. shale revolution began transforming the nation's energy outlook. Technological advances in horizontal drilling and fracking facilitated access to substantial new reserves of natural gas and light oil, imbedded in shale formations thousands of feet beneath the earth's surface. With gas reserves up by more than 47%, natural gas prices fell from $12 to $3 per thousand cubic feet. Tight oil production in North Dakota and Texas soared to more than 500,000 barrels daily. Because government policy directly controlled gas exports (as LNG), oil exports, and pipeline imports, public policy became the object of intense disputes among oil and gas producers, manufacturing and petrochemical interests, utilities, and environmentalists. Exporting gas (or oil) could affect higher prices in the United States but yield significant revenues, jobs, and balance-of-payments benefits. Refraining from exporting, however, would help consumers, reduce coal combustion, and attract energy-intensive businesses to the United States. And by reducing imports, America's foreign policy interests in the Middle East could also change. It remained to be seen what U.S policy would ultimately imply for the world economy.
US;Japan;Middle East, 2005, 2013
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