Adam Ferrari, Founder of Ferrari Energy- The impact of shale oil can be seen in a number of different factors, including the decreased dependence of America on foreign oil as well as job growth. In this article, Adam Ferrari, CEO of Ferrari Energy, analyzes the American economy and how shale oil is impacting it.
Both natural gas and oil can be extracted and produced from shale, which is a sedimentary rock formation. Shale oil, or liquid or gas petroleum pockets, can be found in shale formations. An example of these shale formations can be found spanning Montana, North Dakota, Manitoba, and Saskatchewan in the Bakken formation.
As a consumer, when oil prices dropped, it served the United States positively since they could purchase and consume oil at lower rates. However, when the United States became an oil producer, oil prices affected the country differently. Now, if oil prices drop, it actually hurts the economy.
On the other hand, high oil prices add to business costs globally. For example, if oil prices increase, the cost of shipping agriculture from California, or goods from China, all increases as well. At the end of the day, the price of oil has blanket effects for almost every aspect of a business, both within and outside of the oil industry.
When America learned about shale oil and hydraulically fractured wells, also known as fracking, the country was able to involve itself in producing oil in a significant way. The increased prices of barrels of oil justified taking on the cost of fracking to the United States.
By fracking and producing oil, the United States again became one of the greatest gas and oil producers. By decreasing its dependence on foreign countries for oil and gas, the United States took back its independence and contributed to its own economy in a tremendous way.
By discovering, exploring, and producing shale deposits, the United States created a lot of new jobs for the country. Since the fracking systems have short production lives, recent drilling activity is always available. This type of labor requires loader operators, drilling crews, diesel mechanics, truck drivers, and many more individuals to run these operations. These opportunities to increase jobs in the United States are made possible by the increased prices of oil barrels. There are generally more employment opportunities when the price of oil rises. This direct relationship exists because the cost of oil fracking and production is expensive. Thus, when the oil prices increase, the outcomes and rewards outweigh the costs and risks of the operations necessary to produce oil and gas from shale.
Altogether, when the United States can decrease its dependence on foreign countries and powers, it is able to regain its independence in many ways. When the United States finds new solutions for growth and development, it is important to explore them to increase the number of jobs for Americans and to improve the American economy overall.