In early June, the United Nations released a report meant to act as a stepping stone for nations interested in developing their shale and natural gas resources. Though the UN report appears, at first, as a benevolent gesture, it feels far more politicized.
The US ‘Cautionary Tale’
In its most recent Commodities at a Glance report, the United Nations parroted the oft-repeated but hardly founded belief that fracking brings with it environmental issues. The report also took time to infer that the United States’ enthusiasm for oil production helped caused the worldwide drop in gas prices begun in 2009 and increasing drastically over the next seven years.
The report even arrives at the erroneous conclusion that the worldwide downturn may have permanently dissuaded investors from returning to production. Ultimately — and unsurprisingly — the UN report concluded that the best way for developing nations to proceed was by investing in renewable energy.
The European Perspective
The United Nations report may claim to be data-driven, but its conclusions are perfectly in line with the political aims of the organization. Too bad none are based on the truth.
In the years of the global decline in oil prices, the United States energy sector took a hit. That’s true enough, but the fault wasn’t in the oil and gas industry itself. In fact, most experts have admitted that the markets were prepared for the rapid US expansion. The issue came when international demand failed to rise in concert with production.
Rather than fold, however, the United States spent the years of the downturn building a more efficient and cost-effective production model, effectively becoming the world model for energy production.
The United Nations Report Is Half-Right
The United Nations is right in the following: as developing countries develop the infrastructure to support their internal demand for energy, they’ll need to look to a model. However, the UN is wrong when they suggest the US’ energy history is one to avoid. The energy sector of the United States has proven resilient to an incredible degree; further, they’ve developed safe, cheap means of extracting oil and natural gas from the earth to a degree that is far more efficient and reasonable than any renewable options.
For countries who strive to be self-sufficient, but who remain short on funds, the US fracking model is an ideal for which to strive, not some failed experiment.