The recent buzz about the shale oil deposits in America could have bigger influences than expected. Political leaders in the gulf fear the consequences that their countries may have to deal with and are considering possible strategies in order to prevent economic chaos. For years the gulf has thrived because of the constant demand of oil. It has become a primary source of revenue and replacing it could prove to be impossible. Certain officials suggest shifting to other markets and focusing their attention on recently developed countries.
Cuts to environmental funding will have national implications. According to a White House Report, cuts to environmental funding will hit hard. Permitting for solar and wind power plants on federal lands could also slow down, the sequestration will likely slow down oil and gas permitting.
The National Science Foundation will be forced to issue nearly 1,000 fewer research grants and awards, impacting an estimated 12,000 scientists and students and curtailing critical science, including climate change related research.
However America is not the only country aiming for a shale oil industry. Other countries are enjoying the discovery of shale deposits and this could turn out to be the future of the oil industry. Arabic leaders are considering alternative solutions, some even suggest joining the exploration. While choosing to compete with a new technology can be hard, investing in it and becoming a part of it might be the smartest thing to do.
Whereas the technologies available at the moment permit the extraction and use, the shale oil is still rather troublesome to export outside the U.S. Furthermore the production costs are much higher than the costs of Arabian oil. However developing economies (such as China) are ready to invest in the shale industry. Foreign funding could help increase the speed of the research process and bring a new era of energy.
While the boost of shale deposits could prove to be a great opportunity for the U.S. the moment is far from opportune. Recent sequester cuts threaten America’s financial security. More budgetary reductions are yet to follow and a lot of industries fear for their future.
Hundreds of research grants are being canceled and the oil industry could be severely affected. Taking such things into account we must ask ourselves if the only thing that could be done for the U.S. economy was to impede its development. Cutting research grants seems like an unnecessary measure and it might cost the U.S. its technology advantage.