Unconventional oil and gas reserves are distributed across the globe. Having well defined reserves is important to countries for both economic and geopolitical reasons. Large reserves lead to increased levels of local energy security by protecting consumers against world market price fluctuations.
For example, if international producers decide to increase prices significantly, the U.S. could produce and sell its own oil and gas for local consumption at a much more reasonable price.
As we mentioned before, natural gas markets are more localized than oil markets, which are priced globally. The recent discovery of large shale gas reserves in the United States has driven prices down by increasing the supply of the product. As demand rises, prices may rise again.
The recent increase of proved United States reserves is a good thing, given the amount of energy we use.
Just how much energy do we use in the U.S., anyway? Let’s take a look.
Images: “International Flags” by TommL via iStock