Expert predicts 'Golden Age' of fracking
Controversial means of oil production may possibly lift U.S. from economic doldrums, historian says
As the United States is headed for a certain economic cliff this post election, one historian says that a controversial method for oil production may be just the thing to lift the nation from further gloom and doom. Niall Ferguson, a former adviser to a Republican Party presidential candidate and Harvard history professor says in fact that America may be headed for a new economic "golden age," thanks to fracking.
Historian Nial Ferguson says that "fracking," an ecologically invasive method of oil production could possibly save the United States from economic ruin and in fact lead to an economic boom.
"This is an absolutely huge phenomenon with massive implications for the U.S. economy, and I think most people are still a little bit slow to appreciate just how big this is," Ferguson said in Hong Kong this week. "Conceivably it does mean a new golden age."
Adding to this almost too-good-to-be-true news was the International Energy Agency's prophecy that the U.S. would pass Saudi Arabia as the world's biggest oil producer by the end of this decade and would achieve near energy independence by the 2030s.
Ferguson says this will create lots and lots of jobs in the United States.
The energy sector currently supports 1.7 million American jobs directly or indirectly, according to economic forecaster IHS global Insight. That could rise to three million by 2020, it says.
"It's not only in the extraction industry and infrastructure, but more importantly cheap energy is going to create employment in manufacturing. I think you'll see a renaissance in manufacturing," Ferguson says.
"That is being helped by the fact U.S. labor costs have been pretty competitive over the past decade, even as labor costs are going up in China."
It will also prove to be a momentous boon to the U.S. dollar, Ferguson says. "As the U.S. moves towards energy independence and becoming the biggest producer in the world, the dollar can only benefit. Anybody who thought the financial crisis was going to lead to the demise of the dollar as an international currency is wrong -- it's quite the opposite."
The one sticky wicket in this equation - how will this effect international relations between the U.S. and the Middle East?
"Nobody is going to step in and take the job of being global policeman in charge of Middle Eastern stability. I think everyone would be nervous, if the Chinese suddenly volunteered to take that job on, which by the way they are not going to do anytime soon," Ferguson says.
A staunch supporter of Mitt Romney, Ferguson concedes the irony that the president will now be the beneficiary of the "good times that lie ahead."
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