Risk Reward and Fracking

1326 WordsJul 10, 20186 Pages
Risk Reward “Fracking provides a source of energy that is not only new but also relatively clean, cheap, without political strings” (www.economist.com, 2014, para. 3). In the article “The Petrostate of America” the debate about fracking, the energy boom throughout the world, and what decisions the U.S. government along with President Obama should make on deciding to lift the ban on exportation of crude oil and restrictions on getting permits to export natural gas are starting to heat up. There are many topics in the article that focus on key principle and indices of economics and based on the decision made by our leaders could possibly determine our fate in an economy that is trying to rebuild. Therefore, throughout this work the goal is…show more content…
There was a time when this was not a bad thing because it allowed the U.S. to preserve one of the most important natural resources, while using others. “The Petrostate of America” argues that President Obama should remove the ban and restrictions immediately, and the days of preserving oil and natural gas should be over. “Barack Obama should lift it so that newly fracked oil can be sold wherever it makes the most cash” (www.economist.com, 2014, para. 5). The vulnerable state of the economy may be dependent on these government decisions based on the amount of money they could provide to the U.S. economy overtime. If the ban is lifted and the restrictions are fixed we will have a competitive advantage in the world market, because we can produce the product at a cheaper cost. How the government decides to enforce the rules and maintain the institutions in the oil and gas industry will be crucial in whether or not fracking is beneficial to our market outcomes (Mankiw, 2012, p.11). Trade Can Make Everyone Better Off “Trade allows countries to specialize in what they do best and to enjoy a greater variety of goods and services” (Mankiw, 2012, p. 10). That being said many countries are in a difficult spot when it comes to oil and natural gas, and the U.S. is not in good shape when it comes to the
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