The abundant availability of energy in 2014 is encouraging – in very many ways. New technology associated with accessing and extracting natural gas and oil has created an energy boom along with new jobs. The Economist likened the boom in energy to the California gold rush. But this boom is very different in its technology and the very particular political challenges it faces – for both traditional fossil fuels and renewable energy.
Beyond creating new jobs and new sources of energy, the “boom” has leveled prices of natural gas and oil. It has also moved the United States closer to what multiple presidents have called for in historic, campaign political statements – energy independence and energy self-sufficiency for America. For consumers, access to widespread, available oil and natural gas means price stability, including months of decline during 2013 in the price of gasoline at American gas stations.
Of course, there is no guarantee that international issues will not alter current supplies and threaten recent price stability. Both supplies and price are particularly vulnerable to the continued instability in the Middle East and the uncertainty over persistent, volatile political issues on the Korean peninsula and old territorial disputes between China and Japan. Historic trends in prices have frequently been disrupted by political volatility.
Despite the very good news for consumers and the U.S., reactions to the boom in energy availability have not been uniformly positive. Concern over the environment and the desire to avoid “energy production in my backyard” have led to voter restrictions on hydraulic fracturing or “fracking” – the extraction of natural gas from shale beds using the injection of water and chemicals. The public’s negative reaction is not restricted to gas wells; indeed, consumers have also reacted unenthusiastically to the presence of windmills that produce renewable energy and sometimes kill errant fowl. That same environmental concern has led to pressure on government to control energy production with new rules. Misplaced beliefs about the ability to restrict global markets has also led to pressure on the federal government to limit exports as well via licenses for ports associated with liquid natural gas.
In so many ways, the public has benefitted from the ingenuity that has come from the marketplace. That benefit has come in the form of stability in energy prices, new jobs in the fossil and renewable sectors of the industry, and increased availability of energy, globally and at home. The last decade has not only seen a boom in the oil industry with newly identified sources of oil and natural gas, but it has seen improved technology in the renewable energy sector as well. In addition to improvements in the technology associated with the generation of electricity via wind, progress has continued with greater efficiency of solar cells too.
Yet, the challenge to energy availability in 2014 is likely to continue. For those who support renewable energy and for those involved in traditional fossil fuels, there is a common interest. It is in limiting government restrictions on energy production and supporting R&D.