An oil pump jack in Santa Maria, California, a three-story humming contraption struck residents as a mere curiosity until someone uttered the petroleum industry's dirty word: fracking.
AP Photo/Jae C. Hong
North American Oil and Gas Reserves: Prospects and Policy
Summary of a Workshop at the Harvard Kennedy School of Government
For a generation, policymakers in North America have been concerned about increasing dependence on imported oil and natural gas and the resulting exposure of North American economies to global supply constraints. Yet in the space of a few short years the narrative has changed abruptly. With the major recent expansion of extraction of unconventional sources of oil and natural gas, North America has not become the major importer of LNG previously forecasted, and crude oil imports into the U.S. have declined. Enormous growth in shale gas, which now accounts for 30% of U.S. natural gas production, has contributed to prices at as low as $2/MMBtu, with massive spreads against the $14/MMBtu charged in Singapore and other East Asian countries.
The change in estimates of production, exploitable reserves, and prices has attracted national attention. President Barack Obama in his 2012 State of the Union address heralded a future of cheap natural gas. Fortune magazine devoted its April 30 edition to the issue. Yet concerns about adequate regulation, particularly of environmental issues associated with fracking, have led to public debate about the full implications of the boom in unconventional oil and gas resources.
To explore the issues in more detail, a group of academics, industry experts, policy analysts and commentators, and practitioners convened at the Harvard Kennedy School on May 1, 2012 to discuss the prospects for North American oil and gas as well as the policy implications that these recent changes imply.
This report summarizes the discussion. As with the workshop, this report does not strive for consensus. Rather it articulates different perspectives on the prospects for North American oil and gas and the various policy challenges that they present.
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