Whenever gas prices rise, public sentiment builds to explore options for weaning the U.S. from foreign oil. In addition to producing oil domestically, proponents of becoming self-sufficient push investment in solar, wind, nuclear, and other forms of energy.
Being self-sufficient does not mean the pursuit of isolationist policies by the U.S. However, when political conflicts arise overseas, the country would no longer face the dual pressures of keeping the peace and keeping the oil flowing.
But how would energy independence affect the nation’s business sector?
A tool to create jobs
Evidence suggests that energy independence could be a significant job creator. Northern and central Pennsylvania have become a mecca for drilling thanks to the Marcellus Shale formation, resulting in the creation of new businesses and thousands of jobs.
A 2012 report by Citigroup estimates the U.S. gross domestic product could increase by more than $600 billion as a result of new petroleum and natural gas production. This includes more than 550,000 jobs directly created in the oil and gas extraction sector and more than 2 million jobs created as a result of new production.
In addition, 785,000 jobs would potentially be created, as businesses would have more cash on hand to invest in talent or build capacity as a result of paying less for the energy required to operate offices and vehicles.
Too good to be true?
Skeptics doubt the U.S. will ever truly be energy independent. They say that Saudi Arabia — which the U.S. is expected to pass in oil production by 2020 — could produce more if it so desired, while the supply in the U.S. will always fall short and require other countries to supplement the supply as demand continues to grow.
In addition, concern over the potential for environmental damage caused by drilling into shale formations may keep some of these sources — not all of which have been proven to contain oil — from being tapped. If the concern becomes great enough and drilling slows, the U.S. will continue to be reliant on the Middle East for oil, and new job creation will be put on hold.
However, the reality of what occurs likely will fall somewhere between these two extremes.
Contact us at (215) 441-4600 if you have questions or would like to discuss how this topic may affect your business.