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Retail horizons: will fracking limit business growth?

How we produce the energy we need, the costs and how we use it will all have significant consequences for the future of retail business growth and the transition to a sustainable economy. These factors will also strongly affect supply chains, manufacturing and consumer confidence.

Fuelled by new horizontal drilling and hydraulic fracturing technologies, the production of natural gas and oil within the United States has seen significant growth. In just a few short years, the U.S. has gone from being a net oil importer to a net oil exporter, something that seemed impossible a decade ago.

At a time when conventional oil supplies were feared to be reaching their peak, conflict in the Middle East threatens to disrupt production and China is competing with the West for resources, fracking has helped prevent a surge in fuel and electricity prices.

The consequences are that long and complex supply chains remain feasible, energy-intensive commodities such as aluminium are abundant and consumer confidence has been growing. Beyond the fracking boom, the new energy supply has been driving manufacturing job growth in long-depressed Rust Belt cities such as Youngstown, Ohio.

Fracking however still remains a highly controversial subject with its future uncertain. Contaminated groundwater and earthquakes are just a few of the problems associated with fracking.

Fracking operations have also been known to leak methane, a potent greenhouse gas, and the scale of these "fugitive emissions" may be far greater than initially thought.

Fracking has been described as a "bubble about to burst", causing the shortening of supply chains, rising commodity costs and a decline in consumer confidence and spending. The U.S. Energy Information Agency recently admitted that the recoverable oil in the Monterey shale formation in California is probably 96 percent lower than previously estimated.



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