U.S. energy policies came into sharp focus last week as the price of crude oil fell to a two-year low. According to The Hill.com the tumbling oil price has a real impact on Americans’ lives. The good: prices at the pump are at a historic low, dipping below $3 in some states. The bad: Stock market volatility hurts investors, raises questions about the robustness of the economic recovery and places severe pressure on domestic oil producers. Prices rebounded on Friday, holding above $80 a barrel. But that did not dull the questions about America’s ability to maintain the pace of the oil boom that has blossomed in recent years.
Critics say that production in the very formations that are most responsible for the U.S. oil boom is endangered by two major factors: a lack of infrastructure at home, which makes the storage and refining of crude more complicated than it should be, and the potential for the oil price to plummet further if the Organization of the Petroleum Exporting Countries (OPEC) doesn’t cut its output. “The market has gotten oversupplied, and with the potential for domestic prices to fall by another $6-$8, certain unconventional plays are no longer economic to develop,” said James Fallon, director of research and consulting with IHS energy team