LITERATURE REVIEW: UNITED STATES ENERGY INDEPENDENCE
Question: How the concerns relating to the exploration of Shale gas were mitigated.
The issue of energy independence is a subject of debate that has dominated US politics for several decades. Virtually, every President since Richard Nixon to Barack Obama have pledged allegiance to assisting the United States realize the goal of energy dependence. Policy debates tend to focus on the strategies that could be implemented to minimize US’s dependence on foreign oil. Homans (2012) argues that the United States has remained independent on imported oil despite increasing demands for energy anxiety across the globe. According to Miller (2010), most Americans agree that America’s dependence on foreign oil particularly the Middle East needs to be reduced or eliminated altogether because it possess great danger to the US. The dependence on foreign oil is associated with increased economic costs because billions of dollars flow from the United States to the oil-exporting countries. This dampens the opportunity that could be enjoyed by the United States in terms of revenue that can be obtained from selling alternative energy sources (Trend E-Magazine 2012). Strategies put forward to reduce the dependence of the United States vary and they range from oil conservation, greater domestic production, and increased pursuance of alternative sources of energy (Miller 2010).
For the past decades, oil has played a pivotal function in the world economy. The oil prices have had a big impact on the prices of everything from natural gas to fuel vehicles to plastics and food. In the recent past oil, prices have been in a roller coaster in terms of rising. There are many aspects, which affect the oil prices. A strong economic power seems to raise the oil demand, while a weak economy has adverse effects on the oil prices; drives up the cost of oil, while a poor economy has an opposite effect. Over the past decades, the US has been reliant on imports for energy supplies. The Energy Information Administration in the US reported that approximately 45 percent of the energy consumed was imports from foreign countries.
Vergler notes that in less than a decade, United States will find itself in the position of an exporter of energy as advancement of energy exploration techniques is made . According to him, US will be energy independent: have more energy than it imports by 2023. The path, which would be used to steer this achievement, would be distinct from the Nixon’s proposed strategy, it is considered being a cheap and clean path to energy independence (Vergler, 2012).
Vergler (2012) goes ahead to point out that this state of energy independence will create an economic environment which the united states would enjoy cheaper energy supplies as compared with other parts of the world. This advantage would give the economy of US, an unparalleled edge over nations such as china, and European countries relying on coal and other sources. This advantage was witnessed in early 2012 when the American firms’ expenditure for natural gas was less than 3 million dollars as compared to South Koreans who were fishing out 13.50 million dollars for the same. Other exporters of energy ironically would support this advantage; their strong holding role in crude oil and regulation prices of natural gas would strengthen what Vergler calls the 21st American century economy (Vergler, 2012).
This independence in energy supplies would revolutionize the US and other world economies in the next decade (Vergler 2012). As Nye argues, this leads to the strengthening of the American economy, which in the run empowers its economic, power contrary to the image being portrayed of the US economy now. According to Anders Aslund, the energy independence would also have an impact on the foreign policy (Aslund 2012). With the fall in the energy imports, US interest in other nations like the Middle East will decrease. With the realization of shale gas, the United States will quietly shift focus from Eurasian energy issues as it had previously (Anders 2012). This advantage though will not be impregnable and permanent as Vergler says. Other nations will follow the steps of the US and explore the Shale oil and gas (Vergler 2012).
Gvosdev (2013) shares similar sentiments citing America’s energy dependence on foreign energy for the past 60 years. Gvosdev (2013) analyzes the convergence between the need to secure economic imperatives to America’s energy prosperity and the strategic energy. Critics see the international military presence in other countries as efforts aimed at securing the prosperity of American energy. However, foreign military missions and deployments increase the military budget in terms of energy costs. Gvosdev (2013) further argues that there is no doubt that the United States has enough energy reserves to not only satisfy the domestic supply but as well to enable the United States to export. These energy reserves are contained in what is referred to as the Shale revolution. The shale oil is believed to be the only way that will enable the US to attain energy independence by 2020. Schachter (2012) agrees with the bounty of shale oil in contributing to energy independence in the United States. Schachter (2012) points out findings by Geologists and government experts who estimated an equivalent of 412.5 billion of oil in form of natural gas (2,500 trillion cubic feet of recoverable natural gas).
Rousseau (2012) suggests that all presidential policies seem to agree on one point; the need for the United States to end its reliance of foreign oil. For instance, Obama’s pledge in 2008 while seeking for votes promised Americans that he would eliminate the dependence on Venezuelan oil and Middle Eastern oil within 10 years of election. Rousseau (2012) further cites Mitt Romney’s policy of achieving energy independence if elected president. Other pundits and politicians have divergent views regarding United States’ efforts to achieve energy independence share the same idea. The 2012 Citigroup report identifies the areas and their resource capabilities that the United States can drill to attain energy independence by 2020, which includes the Shale gas.
IEA survey found out that Shale gas and oil resources could be attributed to increased levels of oil and natural gas in the United States. The IEA argues that the United States is likely to be a leading a net exporter of energy by 2030 coupled with increased possibilities of attaining energy self-sufficient by 2035. The World Energy Outlook (2012) projects that the global market for energy is changing rapidly and such changes have far-reaching consequences on the global energy supply. World Energy Outlook (2012) notes the high potential for the production of oil and gas production in United States.
Chanis (2012) cites recent technological advancements as the key aspects necessary to enable the United States to produce sufficient energy within its own territories. Chanis (2012) argues that realizing energy independence is a dream that can be realized easily. Analysis of US petroleum security identifies critical factors necessary for improving energy independence. However, Chanis (2012) cites several prerequisites for the realization of this objective. These factors are future investment policies with global oil companies and the outcomes of political disputes between environmental interest groups and petroleum companies.
According to Phil Vergler (2012), United States will become energy dependent within a decade; this will be because of technological shift to new oil exploration and natural gas shale fracking techniques. This Shale natural gas exploration is frequently defined as transformative and game-changing, a revolution signaling a golden age of affordable and excessive energy for a resource-constrained world. With the lack of effective exploration techniques, the shale gas reserves in US were initially ignored for quite some time, although the production of conventional sources of energy were turning to be costly each day. The major shale gas plays, the Barnett shale kick started investigation in 1981; however, it was not until the introduction of hydraulic fracturing technology (Halliburton 2008).
However, the efforts to lobby the shift to this new shift of energy supply were faced by national anti-fracking protests mounted against the exploration of Shale gas by hydraulic fracturing. On the other hand, the organizations in the energy sector have largely failed to appreciate the political and social risks (Wilber 2012).
As Shale gas exploration activities expands and becomes more dominant in the process of formulating government energy policies and investment strategies, it has become critically essential to understand the goals of the witnessed protests against the exploration of shale gas. The protest came on the center stage of energy sector activities with the Gas land incident. This incident brought national controversies centered on water contamination alarms and allied threats to agriculture, public health, and ecology (Manning 2012).
Moratoriums are established on the requirements to have a better understanding of the environmental effects of hydraulic fracturing, while injunctions declare clearly that hydraulic fracturing is an unsustainable environmental risk. Major plays in the shale exploration argue that environmental distresses are misplaced and centered on misperceptions fired on by the Gas land incident. However attempts to discredit the Gas land incident have been effective for a number of reasons. First the concerns on anti-fracking have a broad context ranging from water contamination to issues of health, safety, cultural integrity, economic development and political legitimacy. Secondly and crucially major plays in the industries have lost public confidence by disregarding the legitimacy of these issues, overlooking transparency for trade secrets and involving governments instead of communities.
The anti-fracking protests points to lingering knowledge gaps about the impact of shale gas exploration particularly on public health as justification for a precautionary policy and regulatory stance. It naturally seizes on credible analyses of water contamination, seismic activity or other issues as critical evidence supporting the need for further research. Two 2011 reports in particular function as key texts in this regard: a U.S. Environmental Protection Agency (EPA) finding of water contamination from a well in pavilion; and the UK department of Environment and Climate Change (d ECC)’s determination that hydraulic fracturing induced minor earthquakes near Black pool(Manning 2012). Further study is always possible. Both the EPA and ECC studies were not conclusive on some aspects; a simple scientific investigation fact and even greater uncertainty surrounds the impact of Shale gas exploration on the climate change or economy.
In responding to these protests, the major plays in the exploration developed a strategy of countering these protests. The first strategy was to acknowledge the issues, accept the legitimacy of local complaints. Denying the agency of local communities by blaming ‘fear’ and ‘hysteria’ is winning the industry often an ‘outsider’ few friends. Acknowledging grievances would begin to repair its crippling trust deficit with local communities. Movements towards greater transparency and voluntary disclosure, however grudging, are a positive step in this direction and accommodate a major grievance shared by anti-fracking movements worldwide. Meaningful consultations with local stakeholders, instead of didactic ‘information sessions’ to market the presumed benefits of drilling, would help to identify potential points of tension to be addressed through both outreach and grievance mechanisms.
Secondly, the industry needs a broad-spectrum political engagement strategy that is not overly dependent on cozy relationships with regulators, power-brokers and other narrow points of influence, which are easily tarred by general mistrust of central governments and are a source of political risk. In part, this means laying groundwork at the local level with municipal and provincial officials. Such local lobbying is expensive, but many companies have dedicated teams in the wake of legislative and regulatory changes giving more clout to local authorities.
Thirdly, the industry created good faith efforts to lessen adverse effects across the board. Not only did the organizations involved strengthened compliance, ensured subcontractor performance and embraced new technologies, but also made conscientious project decisions concerning the operations of exploration activities. This would entail absorbing increased mitigation costs, which the IEA in its 2012 report on ‘golden rules’ estimates at up to 7%. But it would also reduce non-ideological objections to the industry.
Finally, in addition to lessening the negative effects of shale gas exploration, the companies ensured that the profits are both palpable and fairly and widely distributed as much as possible. For most people, this meant procuring to a great extent locally and employing the locals, remitting the required taxes and most importantly making long term investments which delivered economic boost. The composition but diffuse of benefits of lower gas prices are one thing; an industrial base which provided well-paid jobs for more than two or three years of drilling was a more material way to distribute Shale gas exploration’s benefits.
American Society of Mechanical Engineers 2013. By the Numbers: U.S. to achieve energy independence. Mechanical Engineering. Pp. 32-33
Aslund, A 2012, The impact on foreign policy? Huge. In The geopolitics of U.S Energy Independence, The International Economy, pp. 22-28.
Chanis, J. 2012. U.S. Petroleum Security and Energy Independence. American foreign policy interests. 34(1): pp. 20-26
Gvosdev, N. 2013. Energy independence a game-changer for US Defense posture. World politics review.
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Wilber, T. 2012. Under the surface: fracking, fortunes and the fate of the Marcellus Shale. Ithaca, Cornell University Press