NEW YORK (TheStreet) -- Oil plunged to its lowest level in two years Tuesday and is threatening to break $80 a barrel. While great for consumer gas prices, low oil prices don't necessarily translate into a universal positive for the U.S. economy and consumers. Higher oil prices are needed to continue to fuel a domestic oil and gas production revolution, now in jeopardy.

Even now, oil companies like EOG Resources (EOG - Get Report) and Hess (HES - Get Report)  are playing a game of chicken, hoping oil prices will rebound before they have to cut back shale production in the U.S., a move that would negatively impact the economy. 

Since 2008, fracking techniques have allowed the U.S. to increase its domestic oil production more than 3 million barrels a day, for a total now close to 9 million barrels a day. But those oil companies have come to rely on high oil prices in their exploration planning, and their ability to weather an $80 price of oil for an extended period of time is in doubt.

While the Energy Information Administration Tuesday put the average "break even" price of crude for shale producers at $70, there are several marginal players producing oil in the Eagle Ford Shale and particularly the Bakken, where $70 or even $80 oil will ultimately force major production cuts. Those stocks are 40% to 50% under their market highs for the trailing 52-week period.

Gabriele Sobrara, an analyst for Topeka Capital Markets, commented Tuesday that even larger producers with strong balance sheets, like EOG Resources and Hess, will look to hold back on capital expenditures in 2015 in areas like the Bakken, should prices remain depressed. Others in the shale oil space include Pioneer Natural Resources (PXD - Get Report) and Cimarex (XEC - Get Report)  in the Permian Basin and Whiting Petroleum (WLL - Get Report)  in the Bakken.

Of the more than 8 million new jobs created since 2008, more than a million have been created inside the oil and gas sector. Much of that hiring and growth is traceable to the relatively high price for crude oil, which had been averaging above $100 a barrel for most of the last two years.

Beyond oil stocks, a cratering price for crude is seen as a "canary in the coal mine" for slack growth and missed expectations everywhere around the world. It is an important contributor to the recent U.S. and global stock market negativity.

Lower crude prices will ultimately lead to less hiring and layoffs in the oil and gas sector, although there's little evidence to believe that these cuts will be immediate. Most production planning for even the smallest producers in the U.S. shale plays extend for many months and even years and once a production schedule is set, it becomes difficult to change. That's why the EIA is still predicting record U.S. shale oil production for November, even though the oil markets continue under pressure.

There is a time game that is forced upon these shale oil producers -- a "wait and hope" attitude -- where they will hang on to production as long as they can before making cutbacks, hoping that crude oil prices will recover.

Considering that crude looks anything like a market preparing for a major rally, it is a game that many of these producers are likely to lose, and with them, a lot of U.S. jobs.

At the time of publication, the author was long XEC.

This article is commentary an outside contributor, separate from TheStreet's news coverage.