New technologies in the oil and natural gas sectors have enabled the explosion of production growth in the United States known as the Shale Revolution. A combination of hydraulic fracturing and horizontal drilling allows producers to access reserves of oil and gas from low-permeability geological formations that were previously too expensive to extract. Until recently, the United States was the world’s largest consumer of oil, accounting for 25% of global demand. New developments in the U.S. oil and gas industry have stimulated economic recovery from the 2008 financial crisis via new job growth, increased investment in oil- and gas-producing regions, and lower consumer prices of gasoline. Policymakers worry that a significant reduction of U.S. petroleum imports will have geopolitical implications beyond increased U.S. energy security and could alter diplomatic relationships with oil-producing countries. Likewise, there is some concern that reduced export revenues for traditional producer countries may create instability and potentially threaten U.S. security interests. However, these fears are unfounded due to a popular mis-characterization of the role of oil in shaping diplomatic relationships. 

The diffusion of new oil and gas production technologies is not limited to the United States. Unconventional hydrocarbon reservoirs are already being exploited in Canada, South America and Africa as price signals send international oil companies to new frontiers in search of higher profits. The most significant of these new production technologies include tar sands and deepwater water drilling. In this section, we look at the different types of new oil and gas production technologies that are changing the energy map, and the implications they have for the environment.

In this section: