It seems energy production in the US (and around the world) is becoming more expensive. Secondary and tertiary processes are needed now to attempt to keep up with global demand for fossil-based fuels. And from what I’m seeing reported by the Economist and elsewhere, is that we’re consuming faster than production — which includes not only extraction, but transportation and refinement. The lack of refining capacity world-wide is one major factor why the US has become a net exporter of refined oil products.
Yet, it doesn’t seem price really reflects all this. Sure, there’s the slight upward bumps in price during the summer when oil refinement production in the US switches from gasoline to heating oil. But where are the additional costs associated with fracking? With tar sands extraction? With litigation costs due to pollution? There are a ton of additional costs — because the act of extraction is becoming more expensive — that simply isn’t reflected in the price to consumers and industrialists. European prices seem more in line with actual costs.
So, when we finally square all the real costs associated with fossil-based fuels and create a realistic picture of the price, are we getting closer to price parity with different alternative fuels?
New York’s emerging plan to regulate natural gas drilling in the gas-rich Marcellus Shale needs to go further to safeguard drinking water, environmentally sensitive areas and gas industry workers, the U.S. Environmental Protection Agency has informed state officials.