Unconventional Resources Largest Opportunity for U.S. Economy

However, the report’s authors’ note, the U.S. is caught in an unproductive, divisive, and often misinformed debate about energy strategy that threatens the nation’s economic and environmental goals. They add that the ability of the U.S. economy to improve the standard of living of the average citizen is weaker than it has been in generations. The deterioration began well before the Great Recession and is reflected by slow job growth and stagnating wages. Meanwhile, small businesses in the U.S. are registering eroding performance and business failures have outnumbered new start-ups from 2009 through 2012—the last year of available data—for the first time since at least the 1970s.

“America’s poor economic performance is not cyclical, but structural, and it reflects an erosion of the nation’s fundamental competitiveness,” the report states. “As documented by the U.S. Competitiveness Project at Harvard Business School, the overall quality of America’s business environment has declined in key areas, including skills, infrastructure, costs of doing business, and corporate tax structure.” But America’s abundant and low-cost unconventional gas and oil resources provide an opportunity to change the nation’s economic and energy path. The U.S. now has a global advantage, with wholesale natural gas prices averaging about one-third of those in most other industrial countries. That means major benefits for industry, households, governments, and communities, while reducing the U.S. trade deficit and geopolitical risks.

Although the recent decline in world oil prices has affected the short-term prospects of U.S. unconventionals, low prices are unlikely to significantly impact the fundamental U.S. competitive advantage over the next several decades. Despite these major benefits, however, public support for unconventional energy development, and especially hydraulic fracturing, is decidedly mixed and seems to be declining. Further development is increasingly threatened. Underscored in the report is that opposition reflects both legitimate concerns over local environmental and climate impacts, and widespread confusion over the facts. Therefore, “in today’s status quo, no [energy] stakeholder is achieving its most essential goals. The ability to change America’s economic trajectory is being eroded, industry is facing stiff opposition, local environmental performance is not improving as rapidly as it should, and large-scale progress toward a cleaner-energy and a lower-carbon future remains fiercely contested. There is not a real risk that America will fail to capitalize on this historic opportunity, much less build on it.”