On August 18, the Associated Press ran an interesting story saying that the Trump administration had declared in “a major new policy statement” that “conserving oil is no longer an economic imperative for the U.S.” This statement does not appear to be posted in any obvious government website, but the news story says the government memo was released last month regarding fuel mileage standards.
The memo apparently says that the growth of natural gas and other alternatives has reduced the need for imported oil, which “affects the need of the nation to conserve energy” and provides “more flexibility than in the past to use our oil resources with less concern.” The idea was roundly mocked by environmentalists and other experts, who say the new policy is ignoring climate change.
It is not particularly controversial to note that the shale boom has drastically changed U.S. policy goals. Experts from the Brookings Institution, for example, have repeatedly noted that the shale boom has made big changes to global energy markets. This is because America provides non-political energy supplies, which helps stabilize prices.
That is because counties like Saudi Arabia can work with other producers to limit output and keep prices high, but that would be illegal price fixing for American companies and would probably be a bad business decision anyways. So American oil and gas production helps ensure well-functioning global energy markets, including stability for American consumers. Something like the 1970s oil supply shocks would be hard to imagine with America’s current production, and most of the modern oil conservation laws were built as a response to those shocks.
American natural gas exports have an even bigger role than oil. America is still a net importer of oil and probably always will be, but we are rapidly becoming a leading exporter of natural gas. Natural gas from America can have a huge impact on the world, because natural gas is hard to transport and there are few countries providing it. Many countries want more gas so they can replace dirtier coal power plants.
The Marcellus shale formation is ground zero for the boom in natural gas production. At Cimmaron Land, we help companies secure the right to explore and produce in the region. For more information, just call 412-212-7517.