What are the important choices in an age of abundance?

Executive Summary

The world is experiencing a new age of energy abundance, largely because the United States, the largest energy consumer, is also increasingly a producer. In addition, Brazil and Canada, among others, are emerging as oil powers. Hydraulic fracturing, or fracking, in which high-pressure streams of water and chemicals are injected into shale rock formations, is unlocking vast supplies of oil and natural gas. Increased energy production is helping the U.S. balance of trade with other countries, lowering energy bills nationwide and reigniting hopes of regaining lost manufacturing jobs. The shifts may also give the United States new flexibility in foreign policy. But the boom comes with a price: Many worry about what fracking is doing to drinking water and other aspects of the environment. Moreover, after accidents involving oil-carrying trains, critics are concerned about the safety of the nation's energy-transportation system.

Resources

Bibliography

Books

Coronil, Fernando, “The Magical State: Nature, Money and Modernity in Venezuela,” University of Chicago Press, 1997. Coronil, who was a professor of anthropology at the University of Michigan, tells how the discovery of oil shaped Venezuelan society and culture.

Gold, Russell, “The Boom: How Fracking Ignited the American Energy Revolution and Changed the World,” Simon & Schuster, 2014. Gold, a veteran Wall Street Journal energy reporter, recounts the story of hydraulic fracturing and its impact.

Marcel, Valerie, “Oil Titans: National Oil Companies in the Middle East,” Brookings Institution Press, 2006. Marcel, an energy analyst at Chatham House in London and a former professor at the Institut de Sciences Politiques in Paris, describes how the oil industries of Middle Eastern nations unshackled themselves from the Western oil giants.

Yergin, Daniel, “The Prize: The Epic Quest for Oil, Money and Power,” Simon & Schuster, 1991, 1992, 2008. Founder of Cambridge Energy Research Associates, an energy consulting firm recently acquired by IHS, Yergin is considered America's foremost chronicler of the energy industry. “The Prize,” the definitive history of the field, won the Pulitzer Prize for nonfiction.

Articles

Gilbert, Daniel, and Justin Scheck, “BP Is Found Grossly Negligent in Deepwater Horizon Disaster,” The Wall Street Journal, Sept. 4, 2014, http://tinyurl.com/mapnoke. BP got handed a big bill for negligence in its massive Gulf of Mexico oil spill.

Gold, Russell, and Daniel Gilbert, “The U.S. Is Overtaking Russia as Largest Oil-and-Gas Producer,” The Wall Street Journal, Oct. 2, 2013, http://tinyurl.com/n9s9cy8. America rose unexpectedly to become the world's top energy producer thanks to hydraulic fracturing.

González, Ángel, “Expanded Oil Drilling Helps U.S. Wean Itself From Mideast,” The Wall Street Journal, June 27, 2012, http://tinyurl.com/pl7qukp. The surge in fracking, coupled with growing imports from Canada, is diminishing the need to import Middle Eastern crude.

Reed, Stanley, “Britain Proposes Easier Access to Tap Shale Rock Energy,” The New York Times, May 24, 2014, http://tinyurl.com/nc7ouk6. The British government seeks to ignite its own hydraulic fracturing industry despite stiff opposition.

Roberts, Dan, “Sweeping new US and EU sanctions target Russia's banks and oil companies,” The Guardian, Sept. 12, 2014, http://tinyurl.com/nvk8j8t. The West is adopting a variety of economic measures against Russia in the wake of the Ukraine crisis.

Reports and Studies

“Annual Energy Outlook 2014,” U.S. Energy Information Administration, May 7, 2014, http://tinyurl.com/365m48b. In its yearly report, the U.S. government agency in charge of gathering data for policy makers and the public focuses on the factors that shape the nation's energy system over the long term.

“Shale Gas—A Global Perspective,” KPMG International, 2011, http://tinyurl.com/ppq475u. Consulting firm's report estimates the global potential of shale if other countries decide to pursue hydraulic fracturing.

“World Energy Outlook 2013,” International Energy Agency, Nov. 12, 2013, http://tinyurl.com/lxkqcab. Annual report from the IEA, a Paris-based organization of governments of oil-importing countries, projects energy trends by fuel, sector, region and scenario through 2035.

Larson, John, and Richard Fullenbaum, “America's New Energy Future: The Unconventional Oil and Gas Revolution and the Economy—Volume 3: A Manufacturing Renaissance,” IHS, September 2013, http://tinyurl.com/mynzvdw. Energy consulting and analysis firm describes how cheap fuel, especially natural gas, is a boon for petrochemical and other energy-intensive industries, bolstering the U.S. manufacturing sector.

The Next Step

Energy Exports

Cama, Timothy, “Report: Natural gas exports could hurt Russian state-owned company,” The Hill, Sept. 22, 2014, http://tinyurl.com/ne379x2. Researchers at Columbia University predict American competition for natural gas exports to Europe will reduce revenue for Russia's state-owned gas company by 18 percent.

Feng, Bree, “Russia Uses Its Natural Gas to Play the China Card, Again,” The New York Times, Sept. 25, 2014, http://tinyurl.com/mytu2u8. Russia and China are discussing a deal that would authorize a natural gas pipeline from Siberia to western China and would double Russia's gas exports to China.

Snyder, Jim, “Keystone-Oil Export Ban Sought by Senator Backing Pipeline Bill,” Bloomberg News, Jan. 13, 2015, http://tinyurl.com/kpa9r65. Sen. Joe Manchin, D-W. Va., proposed an amendment that would subject oil transported from Alberta via the Keystone XL pipeline to the restrictions of U.S. crude export laws.

Middle Eastern Oil

Kantchev, Georgi, “How Low Can Oil Go? And When's It Going Back Up?” The Wall Street Journal, Jan. 19, 2015, http://tinyurl.com/kvhe596. Experts predict Saudi Arabian oil prices will continue to fall through the first quarter of 2015 due to emerging Russian competition and the current strength of the dollar.

El Gamal, Rania, “Facing new oil glut, Saudis avoid 1980s mistakes to halt price slide,” Reuters, Oct. 14, 2014, http://tinyurl.com/mzyyk7l. Despite a global market similar to the 1980s oil glut, Saudi Arabia plans to maintain its crude oil production levels, rather than cut production, in an effort to retain its market share.

Graeber, Daniel, “EIA: Oil threats present, but subsiding,” United Press International, Oct. 8, 2014, http://tinyurl.com/lrgu9or. Disruptions in global oil production caused by violence in northern Iraq and Libya have mostly subsided since mid-2014, according to a September report from the U.S. Energy Information Administration.

Natural Gas

Carrington, Damian, “UK to allow fracking companies to use ‘any substance’ under homes,” The Guardian, Oct. 14, 2014, http://tinyurl.com/oye6a2y. A proposed law in the United Kingdom would prevent landowners from blocking fracking below their property and would permit companies to use “any substance” to extract natural gas from the earth.

Cama, Timothy, “Obama Sending Mixed Messages on Natural Gas,” The Hill, Jan. 18, 2015, http://tinyurl.com/novjcoy. The President of the American Petroleum Institute argues that proposed regulations on methane gas will raise natural gas production costs and discourage development of a domestic energy supply that has helped to reduce carbon dioxide emissions.

Philips, Matthew, “U.S. Oil Producers May Drill Themselves Into Oblivion,” Bloomberg Businessweek, Oct. 13, 2014, http://tinyurl.com/qa963aq. Natural gas companies are drilling more and boosting their oil reserves even as global oil prices continue to fall, which could lead some into bankruptcy.

Petroleum Industry

Crooks, Ed, and Anjili Raval, “US poised to become world's leading liquid petroleum producer,” The Financial Times, Sept. 29, 2014, http://tinyurl.com/lnymyyl. Advances in natural gas extraction have put the United States on track to pass Saudi Arabia as the world's largest producer of liquid petroleum.

Dearen, Jason, “Feds approve oil exploration off US Eastern Coast,” The Associated Press, July 19, 2014, http://tinyurl.com/nlhauot. The Obama administration permitted energy developers to explore offshore drilling in the Atlantic Ocean using blasts of sound that detect oil and gas deposits under the ocean floor.

Gilbert, Daniel, and Justin Scheck, “Big Oil Feels the Need to Get Smaller,” The Wall Street Journal, Nov. 3, 2014, http://tinyurl.com/qdp6tsr. Exxon Mobil, Shell and Chevron are paring back operations as rising production costs squeeze their earnings.

Organizations

American Petroleum Institute
1220 L St., N.W., Washington, DC 20005-4070
202-682-8000
www.api.org
Trade group for the oil industry that lobbies the public and legislators and propagates guides to best practices for the industry.

Association of American Railroads
425 Third St., S.W., Washington, DC 20024
202-639-2100
www.aar.org
Lobby for railroad companies; publishes statistics and offers the industry's views on energy transportation.

Canadian Association of Petroleum Producers
2100, 350-7 Ave., S.W., Calgary, Alberta, Canada T2P 3N9
403-267-1100
www.capp.ca
Trade group for the Canadian oil industry that publishes an array of statistics.

Food and Water Watch
1616 P St., N.W., Suite 300, Washington, DC 20036
202-683-2500
www.foodandwaterwatch.org
Environmental group that fights hydraulic fracturing.

International Energy Agency
9, rue de la Federation, 75739 Paris Cedex 15, France
33-1-4057-6500
www.iea.org
Intergovernmental organization linking oil-consuming countries; publishes international energy statistics.

Organization of the Petroleum Exporting Countries
Helferstorferstrasse 17, A-1010, Vienna, Austria
43-1-2111120
www.opec.org
Intergovernmental organization that unites oil-producing countries in Asia, Africa and Latin America; controls about a third of the global oil market.

U.S. Energy Information Administration
1000 Independence Ave., S.W., Washington, DC 20585
202-586-8800
www.eia.gov
The energy statistics arm of the U.S. government that gathers and disseminates energy data for the public and policymakers.

DOI: 10.1177/2374556814562573