Shale energy shows the power of markets

Shale oil worker checks hydraulic fracturing pumps in Texas
An oil worker checks pumps at a hydraulic fracturing operation near Carizo Springs, Texas, which sits atop the massive Eagle Ford shale formation (source: dpa)
  • Renewable and shale oil technologies have matured at nearly the same time
  • Shale’s effect on output and markets better fits the definition of a disruptive technology
  • By bolstering U.S. energy independence, shale has big political implications as well

When experts, policy makers and commentators discuss major technological developments in the energy sector, their attention is often focused on modern renewables, which they describe as disruptive technologies.

If one takes a closer look at the data, however, a clear fact emerges: the impact of new technologies in fossil fuels, specifically those developed to produce shale oil and shale gas, has been larger than that of renewables. Shale technology has been by far the more powerful force, fundamentally altering the global energy markets and challenging the existing order, with serious spillover effects on the global economy and geopolitics.

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