The Shale Revolution: Reducing Energy Dependence in the US - Essay Sample

Introduction

Over dependency on vital energy has overtime been an issue of concern, coupled with the 1970's recession caused to surge in global oil prices. The United States adopted the shale revolution as a mitigation measure to stimulate the great production of natural gas and oil. According to the author, the blending of hydraulic fracturing and horizontal drilling revolutionized the mass exploitation of energy. All the states which depended on energy exploration accounted for an increased number of employees. Between 2010 and 2012, the industry injected into the industry 169000 jobs, which was approximately ten times compared to the overall US employment rate. Although the GDP due to gas and oil extraction was unstable, from 2011, the shale boom trigged a steady increase of GDP from 0.6% to 1.6%.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Onto fossil fuels and state employment, there was a great decrease in energy prices, and most states diversified from energy-intensive industries between the 1980s and 2000. However, with the increased use of combined technology in the early 2000s, the level of employment went up again. In addressing oil prices shock across the five states, the presence of sizable natural gas and oil industries have silenced the negative responses towards raising oil prices. State susceptibility to a drop in oil prices is dependent on natural gases. States with prominence in natural gases are less likely to experience harm as a result of the decline in prices of oil.

Q1. From my reading today, I have discovered that the shale revolution was a conservative approach towards the 1970s oil prices upsurge, which I have found very illuminating—the over-dependency of the United States on the importation of energy. The revolution advanced the use of technology that led to the mass production of both gas and oil. Thus, the idea leads to economic diversification and greater availability of domestic energy after 2008. Consequently, both employment and GDP recorded an upward trend between 2010 and 2012.

Q2. However, I found it puzzling that states which provided innovative energy resources became less economically differentiated and thus economically susceptible in case of energy prices deteriorations. Ideally, the local energy exploitation was made to cushion the economy from over-dependency on imports. But for the states which did not bother to diversify its economy was bound to face economic constraints in times of price declines. Fast forward to the 2000s, most of the states depend less on the main five energy-related industries compared to what they did back in 1982.

Q3. I am confident that reduced use of energy has contributed to the lessened vulnerability of the American economy to the price shocks of the oil. The shale revolution was a great milestone for the American states, but over-reliance on energy production economy turned out to be unreliable. Prominence in energy production makes states with undiversified and small economies to be more susceptible to economic downturns in time of energy price drops. If prices of oil were to go down, the states with high dependence on gas and oil extraction would be hit hard.

Work Cited

Brown, Stephen PA, and Mine K. Yücel. "Shale Gas and Tight Oil Boom: US States' Economic Gains and Vulnerabilities." (2013). Retrieved from. https://www.cfr.org/report/shale-gas-and-tight-oil-boom