In a satellite image of the United States at night, bright lights are clearly visible in the Bakken region of North Dakota and Eagle Beach in Texas. These areas are far from urban centers, meaning the light isn't from human activity or city illumination. What could it be? The answer lies in the burning of shale gas. This phenomenon is somewhat similar to the milk dumping during the Great Depression, when surplus products were destroyed rather than stored or transported. In this case, oil and gas companies choose to burn off excess natural gas to avoid the costs of handling it. Could this waste become a new "shale curse"?
The reason behind this practice is that shale gas is extremely cheap. Known as a "game changer" by the global energy community, it has transformed the world’s energy landscape. According to the U.S. Energy Information Administration, U.S. oil imports hit their lowest level in 25 years in 2014. Some economists even predict that by 2020, U.S. oil and gas production might surpass that of Saudi Arabia.
This boom has brought short-term happiness to Americans, but it also caused Obama's "green revolution" to take a backseat. However, just like lottery winners who often end up bankrupt, the U.S. shale gas rush has led to its own problems. With rapid development, infrastructure such as pipelines and storage facilities have lagged behind, and falling global gas prices have made many projects less profitable. As a result, in many oil and gas regions, excess shale gas is simply burned off — seen as the most economical option.
According to a report by the Financial Times, in North Dakota, the main hub for U.S. shale gas development, the amount of flared gas rose by about 50% in 2012. In Texas, regulators issued 1,963 venting permits in 2012 — a sharp increase from 306 in 2010. But this kind of flaring not only wastes energy but also increases greenhouse gas emissions.
This situation echoes the concept of the "resource curse." In 1995, American economists Jeffrey Sachs and Andrew Warner studied 97 developing countries and found that those with high resource exports grew more slowly than those with fewer resources. In other words, resource wealth didn’t drive growth — it became a burden.
If one aspect of the "Shale Curse" is the massive waste of energy, another is the "Dutch disease" — a common problem in resource-rich economies. In the 1970s, the Netherlands experienced an economic boom due to the discovery of the Groningen gas field, but this led to a decline in agriculture and industry. When the gas boom ended, the economy suffered. Similar patterns have been seen in Latin American countries, contributing to their development traps.
Today, the large-scale development of shale gas in the U.S., especially in regions where gas is being burned instead of sold, shows heavy capital investment in the sector. However, this influx of money may reduce investments in other areas, particularly renewable energy. While the shale gas boom will likely last for years, when it eventually declines, the U.S. could face a similar "Dutch disease."
Additionally, there's a third curse in the "Shale Curse" that shouldn't be ignored: the world’s largest country shirking its global responsibilities. The rise of shale gas has slowed the U.S. “green revolution†and distracted the government from addressing climate change. On an issue critical to humanity’s survival, the U.S. lacks leadership, which could lead to serious consequences.
As Sophie Sachs summarized regarding the "resource curse," "as long as natural resources are wisely used, they can lay the foundation for human capital, technological advancement, and infrastructure development, leading to sustained growth." If wealth is wasted, if policies are blinded by short-term gains, or if responsibility is replaced by short-sightedness, the consequences will come sooner or later. As Americans enjoy the "shale gas dividend," they should remain cautious of its potential devastating effects. Shale gas is indeed a gift from the world to the U.S. and the globe, but if misused, it could turn into a curse.
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