There’s no doubt that US-based fracking – the process through which oil and gas deposits are blasted from shale deposits deep underground – has caused a revolution in worldwide energy supplies.
Yet now the alarm bells are ringing about the financial health of the fracking industry, with talk of a mighty monetary bubble bursting – leading to turmoil on the international markets similar to that in 2008. In many ways, it’s a straightforward case of supply and demand. Due to the US fracking boom, world oil supply has increased.
But with global economic growth now slowing – the drop in growth in China is particularly significant – there’s a lack of demand and a glut in supplies, leading to a fall in price of nearly 50% over the last six months.
Fracking has become a victim of its own success. The industry in the US has grown very fast. In 2008, US oil production was running at five million barrels a day. Thanks to fracking, that figure has nearly doubled, with talk of US energy self-sufficiency and the country becoming the world’s biggest oil producer – ‘the new Saudi Arabia’ – in the near future.
But, fracking is an expensive business. Depending on site structure, companies need prices of between $60 and $100 per barrel of oil to break even. As prices drop to around $50 per barrel, investments in the sector look ever more vulnerable.
The following are paid links. As an Amazon Associate I earn from qualifying purchases.
I am Jeff Clark, founder of Internet Brothers, producer of this blog, and passionate about hiking. I live in Western NC near the Blue Ridge and Great Smoky Mountains. Pisgah and Nantahala National Forests are just out my door, so the content will focus on these areas, but let me know what you would like to see on the site. 
Copyright © 2011-2023 Internet Brothers. All Rights Reserved. ISSN 2324-6057
Designed by Elegant Themes | Powered by Wordpress | Logo by Design Aspirations