Fracking “Revolution” continues to be a disaster for investors and more

❝ Steve Schlotterbeck, who led drilling company EQT as it expanded to become the nation’s largest producer of natural gas in 2017, arrived at a petrochemical industry conference in Pittsburgh…with a blunt message about shale gas drilling and fracking.

“The shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor in the shale gas industry with very few limited exceptions,” Schlotterbeck, who left the helm of EQT last year, continued. “In fact, I’m not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change.”

“While hundreds of billions of dollars of benefits have accrued to hundreds of millions of people, the amount of shareholder value destruction registers in the hundreds of billions of dollars,” he said. “The industry is self-destructive.” [emphasis added]…

❝ “The technological advancements developed by the industry have been the weapon of its own suicide,” Schlotterbeck added, referring to the financial impacts of shale gas drilling on shale gas drillers. “And unfortunately, the industry still has not fully realized how it’s killing itself. Since 2015, there’s been 172 E&P company bankruptcies involving nearly a hundred billion dollars of debt.”

❝ “In a little more than a decade, most of these companies just destroyed a very large percentage of their companies’ value that they had at the beginning of the shale revolution,” he said. “It’s frankly hard to imagine the scope of the value destruction that has occurred. And it continues.”

Our fake president wants to make it easier for this clown show to borrow even more money. When this paper edifice crashes and burns – what do you think will be the effect on the nation’s economy?

8 thoughts on “Fracking “Revolution” continues to be a disaster for investors and more

  1. p/s says:

    “U.S. Oil Companies Find Energy Independence Isn’t So Profitable” (NYT 6/30/19) “…In the last four years, roughly 175 oil and gas companies in the United States and Canada with debts totaling about $100 billion have filed for bankruptcy protection. Many borrowed heavily when oil and gas prices were far higher, only to collectively overproduce and undercut their commodity prices. At least six companies have gone bankrupt this year, and Weatherford International, the fourth-leading oil services company, which owes investors $7.7 billion, is expected to file for bankruptcy protection on Monday.
    “The politics of methane” (Brookings Institution 7/8/19)
    “Persian Gulf Conflict Could Send Oil Beyond $325” ( 7/7/19) See also “Oil Prices Set For Worst Weekly Drop In Five Weeks” (7/5/19)

  2. Collateral damage says:

    “As the Trump administration opens millions of acres of once protected land and coastline for oil and natural gas exploration, there is mounting concern about the potential impact on the environment as well as those who enjoy the outdoors. Researchers at the University of New Hampshire took a closer look at one of these industries, shale natural gas energy development (SGD), and how it is affecting the experiences of outdoor recreationists, like hikers and campers. They found a significant number of recreationists encountered SGD-related activities and a smaller number even changed their outdoor recreation behaviors or experiences as a result of encountering SGD.”
    “According to the Outdoor Industry Association, in 2017, the U.S. outdoor recreation economy generated $887 billion in annual consumer spending and employed over 7 million people which is 42 times as many individuals in the U.S. employed by the oil and gas industry.
    “The outdoor recreation industry has quietly positioned itself as a massive economic sector in the United States”, said Ferguson. “As SGD grows in the United States, the number of affected recreationists could increase and current numbers of those impacted could rise. It is important for lawmakers, natural resource managers, and industry representatives to recognize that outdoor recreation is an increasingly critical component of the economy and should have a seat at the table when looking at responsible SGD.”

  3. 23 skidoo says:

    “Energy Industry Faces Reckoning After Oil Prices Crash : Withdrawal of capital threatens a sector that has been a pillar of the debt markets”
    “Places that bet big on fracking as an engine for economic stability “are going to fall on hard times,” according to Clark Williams-Derry, analyst at the Institute for Energy Economics and Financial Analysis. He likenes the effect of low oil prices on U.S. frackers to an unhealthy person contracting the rapidly spreading coronavirus.
    “You think of someone with a weakened immune system, and now they’re facing the coronavirus. This was an industry that was already touch-and-go financially, already having severe difficulties managing debt loads. This just accelerates that problem, and brings all the other problems to the fore.”
    “Oil price plunge wallops NM”
    “As oil prices crash, line-item vetoes to state budget coming”

    Donald J. Trump @realDonaldTrump 8:36 AM Mar 9, 2020:
    “Good for the consumer, gasoline prices coming down!”

    • eideard says:

      Saw the #1 operator in the Permian Basin on the tube, this morning. Answering questions on BBG TV. Said, “If the war between Saudis and Russians keeps up through year-end, he expects at least 80% of the smaller producers to go belly-up.”

      Nice to see them out of the political battles coming up with the growth of electric vehicles – and cretins like Trump wanting to rescue them with taxpayer $’s.

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