Power of Story
Send a Tweet        
- Advertisement -

Share on Google Plus Share on Twitter Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 1 (1 Shares)  

Printer Friendly Page Save As Favorite View Favorites (# of views)   1 comment
OpEdNews Op Eds

The Fracking Rush Hits a Pothole

By       Message Other Words     Permalink
      (Page 1 of 2 pages)
Related Topic(s): ; ; ; , Add Tags Add to My Group(s)

Well Said 1   Valuable 1  
View Ratings | Rate It

opednews.com Headlined to H2 11/29/14

- Advertisement -

Original published at Other Words

Oil and natural gas gluts are driving prices so low that drill-baby-drillers may have to hit the brakes.

- Advertisement -
By


Ever heard of Bryan Sheffield? The baby-faced tycoon enjoyed a brief blast of fame a few months ago when he became one of those rare non-tech billionaires under 40.

- Advertisement -

What ignited his rise to the ranks of Americans with money to burn? He owns a company called Parsley Energy Inc. that extracts oil and natural gas using the highly polluting technique known as fracking. Sheffield's fortune hit the billion-dollar milestone when Parsley went public in May.

But a sudden plunge in oil prices quickly spiked the young Texan's newfound status, trimming Sheffield's fortune to a more modest $750 million.

You see, domestic oil production could hit 9.4 million barrels a day next year. This 42-year high, sparked by a fracking bonanza, is feeding a global glut that's pushing oil prices down to levels not seen since 2010.

As recently as 2013, energy experts were freaking out about how "expensive" gasoline at U.S. pumps had gotten as it crossed the $4-a-gallon mark. Even though Europeans are accustomed to prices at least twice as high as ours, that problem was supposedly going to choke U.S. economic growth.

Since then, oil prices have retreated -- albeit to the historically high level of about $78 a barrel. The experts are now forecasting that "cheap" gasoline prices will slink along at under $3 a gallon next year.

That's good news for U.S. consumers, right? Since we're spending less on gas, can't we splurge more on gifts for our loved ones this holiday season? Aren't we more apt to hit the road to visit grandma?

Yes, but the experts aren't happy.

- Advertisement -

Those low prices are imperiling oil fracking operations in Texas and North Dakota. Many companies may start losing money or even go broke.

High-flying bond investor Jeffrey Gundlach says he bets oil will decline to $70 a barrel soon. After that, "It's bye, bye fracking."

Green-minded people like me aren't upset about the prospect of bidding farewell to fracking. But we do see a risk that "cheap oil" will speed the pace of climate change if more consumers opt to drive gas-guzzlers or refrain from steps that might reduce their carbon footprint.

Well, maybe that won't happen this time around. Lower prices could mean that lots of companies in the fracking business will wind up defaulting on the mountains of junk bonds they've issued to finance their operations.

Those companies may go out of business before oil prices recover. While Sheffield has said he plans to snatch up lots of frackers who go broke, it's likely that the overall industry will contract.

Next Page  1  |  2

 

- Advertisement -

Well Said 1   Valuable 1  
View Ratings | Rate It

http://www.otherwords.org
William A. Collins, a former mayor of Norwalk, Connecticut, founded Minuteman Media in 1998. In 2010, the Institute for Policy Studies took over its management and Minuteman Media was renamed OtherWords. OtherWords distributes commentary and (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon



Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Related Topic(s): ; ; ; , Add Tags
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

The Latest Victim in the War on Whistleblowers

Banning Assault Weapons Makes More Sense than Arming Teachers

Romney's Borking Strategy

Naomi Klein wants everyone to join forces and just pull the plug on oil, gas, and coal

Shameless Tax Loopholes

The Fracking Rush Hits a Pothole