In 1973, the United States’ oil embargo on the Middle East resulted in an era of energy scarcity. Now, forty years later, the country is on the cusp of an energy revolution and an economic surge like never before.
What’s behind this revolution? New technology!
Breakthroughs like horizontal drilling and hydraulic fracturing (fracking) have allowed energy companies to tap into vast reserves of oil and natural gas. Wind and solar, once thought to be green fantasies, have finally become economically feasible. Public utilities are reimagining our obsolete energy infrastructure into something smarter and far more efficient.
By 2020, the U.S. could very well produce as much oil as it consumes, reducing the country’s dependence on an often unstable, and therefore unpredictable, Middle East.
“The transformation we’ve seen in just the last few years from an outlook of scarcity to one of abundance is real,” says Jason Bordoff, Director of Global Energy Policy at Columbia University. “It has huge economic, geopolitical and environmental implications.”
The benefits are obvious. By replacing coal with cheaper, all-natural gas, the U.S. has reduced carbon emissions despite bolstering domestic manufacturing. That means that billions of dollars that would have gone overseas are now staying at home, providing capital for future investments.
Yet energy abundance comes with a whole new set of challenges. Environmentalists have protested the government’s involvement in fracking for oil and gas, and economists have warned that the energy bubble – like the dot com bubble of the 90s – could burst at any time.
But the bubble isn’t just in oil and gas—renewables like solar and wind are growing rapidly. And thanks to the government’s focus on energy efficiency, the U.S. now gets twice as much “bang for its buck” than it did thirty years ago, when the economy was a third its current size!
Global greenhouse gas levels reached an all-time high last year, and in June, the International Energy Agency claimed that we were headed towards a temperature increase as high as 9.5°F by the end of the century – which would all but spell the end of civilization as we know it.
Amy Myers Jaffe, Executive Director of Energy and Sustainability at the University of California – Davis, says that “people can no longer rely on high oil prices and fossil-fuel scarcity to motivate a climate agenda. It completely changes the picture.”
So is too much of a good thing bad for you? The U.S. is about to find out.
[ energy bubble, energy scarcity, energy revolution, hydraulic fracturing, Jason Bordoff, Columbia University, Amy Myers Jaffe, Ana Shell NRGLab, gasification nrglab, NRGlab, NRGLab Pte Ltd ]