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Shale oil production could boost the world economy by up to $2.7tn (£1.7tn) by 2035, according to a report. The extra supply could reach up to 12% of global oil production, or 14 million barrels a day, and push global oil prices down by up to 40%, PricewaterhouseCoopers said. Shale oil and gas have emerged as a viable way to boost energy supplies. However, there are concerns over the process by which the gas is extracted, known as fracking. In fracking, a mixture of water, sand and some chemicals is pumped into a well under high pressure to force the gas from the rock. It has been linked to minor earthquakes, and there are concerns about its impact on the environment.
In its report, PwC said that the level of global growth could increase by around as much as 3.7% by the extra supply of shale oil, which is the equivalent of adding an economy roughly the size of the UK to the total world economy by 2035. But the benefits of oil price reductions due to shale oil will vary significantly by country. Current major oil exporters, such as Russia and the Middle East, could be "significant net losers in the long term unless they can develop their own shale oil resources on a large scale", it said.
Last month, China stepped up its efforts to explore shale gas reserves by awarding exploration rights on 19 shale gas areas to 16 firms. Demand for energy in China has surged in recent years as its economy has expanded. The country is now the world's biggest energy consumer. In December, the UK government gave the go-ahead for a firm to resume fracking to exploit gas in Lancashire, which was stopped after two tremors near Blackpool.
BBC News - Shale oil 'to boost world economy by up to $2.7tn'
But critics say that in doing so, he’s selling out the real energy needs of the United States -- and they say the U.S. needs a pipeline, not a pipe dream when it comes to energy concerns. “Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more,” Obama said. “Solar energy gets cheaper by the year -- let’s drive down costs even further. As long as countries like China keep going all in on clean energy, so must we.”
Obama also paid lip service to natural gas and oil industry, with a brief tip of the hat to the fact that a boom in natural gas “has led to cleaner power and greater energy independence.” “Now, in the meantime, the natural gas boom has led to cleaner power and greater energy independence,” Obama said. “We need to encourage that. And that’s why my administration will keep cutting red tape and speeding up new oil and gas permits. That’s got to be part of an all-of-the-above plan. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and our water.”
Obama, in the meantime, even issued what he called “a new goal for America.” “I’m also issuing a new goal for America: Let’s cut in half the energy wasted by our homes and businesses over the next 20 years. We'll work with the states to do it. Those states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make that happen,” he said.
But Tim Wigley, president of the Western Energy Alliance, called the president’s hand on the SOTU proposal. “Time and time again President Obama says the right things publicly when he talks about our nation’s energy and economic potential,” Wigley said. “However, while touting the success of increased oil and natural gas production in America, he continues to ignore the fact that those increases are almost exclusively on state and private lands, and that federal lands are not keeping pace.” Wigley noted that Obama only briefly mentioned energy from public lands -- as a pretext for proposing an Energy Security Trust Fund that is designed, according to the president, “to get American cars and trucks off oil for good.” But Wigley said that the Obama administration is ignoring the fact that unlocking federal lands for further natural gas and shale oil development could help not only our energy outlook – but create thousands of jobs and increase government revenues.
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