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America’s fracking ‘boom’ is having its worst months ever
America’s fracking ‘boom’ is having its worst months ever
1/26/15
They threw a fracking party in Illinois, and hardly anyone showed up.
More precisely, two months after the state completed a long regulatory process and opened the door to hydraulic fracturing, only one company applied. The state hired 36 employees and five lawyers to handle the expected rush of applicants, reported the Chicago Tribune, “for work that doesn’t exist.”
This after a land rush by energy companies in Southern Illinois that saw them buy tens of thousands of acres anticipating a North Dakota-style energy boom that would create 10,000 jobs.
The disinterest is attributed to the sharp decline in oil and gas prices globally, which makes fracking unprofitable — at best a break-even proposition, at worst a big money-loser.
“Smart people don’t invest in things that break-even,” said energy expert Arthur Berman in Oilprice.com. “I mean, why should I take a risk to make no money on an energy company when I can invest in a variable annuity or a REIT that has almost no risk that will pay me a reasonable margin? Oil prices need to be around $90 to attract investment capital. So, are companies OK at current oil prices? Hell no! They are dying at these prices.
....Anti-fracking groups can’t contain their glee. Annette McMichael, a spokesman for Southern Illinoisans Against Fracturing Our Environment, told the Associated Press her group “believed all along the price of oil is not going to be sustainable, and once it fell the fossil fuel industry would be leaving Illinois — or at least putting hydraulic fracturing on hold. … We certainly hope oil prices stay depressed for 2015, which is a good possibility.”
But maybe Southern Illinois should be grateful. North Dakota became the Saudi Arabia of North America thanks to fracking over the past few years — and now may go bust....
http://www.washingtonpost.com/news/morning-mix/wp/2015/01/26/americas-fracking-boom-is-having-its-worst-months-ever/
1/26/15
They threw a fracking party in Illinois, and hardly anyone showed up.
More precisely, two months after the state completed a long regulatory process and opened the door to hydraulic fracturing, only one company applied. The state hired 36 employees and five lawyers to handle the expected rush of applicants, reported the Chicago Tribune, “for work that doesn’t exist.”
This after a land rush by energy companies in Southern Illinois that saw them buy tens of thousands of acres anticipating a North Dakota-style energy boom that would create 10,000 jobs.
The disinterest is attributed to the sharp decline in oil and gas prices globally, which makes fracking unprofitable — at best a break-even proposition, at worst a big money-loser.
“Smart people don’t invest in things that break-even,” said energy expert Arthur Berman in Oilprice.com. “I mean, why should I take a risk to make no money on an energy company when I can invest in a variable annuity or a REIT that has almost no risk that will pay me a reasonable margin? Oil prices need to be around $90 to attract investment capital. So, are companies OK at current oil prices? Hell no! They are dying at these prices.
....Anti-fracking groups can’t contain their glee. Annette McMichael, a spokesman for Southern Illinoisans Against Fracturing Our Environment, told the Associated Press her group “believed all along the price of oil is not going to be sustainable, and once it fell the fossil fuel industry would be leaving Illinois — or at least putting hydraulic fracturing on hold. … We certainly hope oil prices stay depressed for 2015, which is a good possibility.”
But maybe Southern Illinois should be grateful. North Dakota became the Saudi Arabia of North America thanks to fracking over the past few years — and now may go bust....
http://www.washingtonpost.com/news/morning-mix/wp/2015/01/26/americas-fracking-boom-is-having-its-worst-months-ever/
Cross-posted in the GD forum.
