Low oil prices impact decisions in shale industry
Wednesday, January 14, 2015
Consumers may be enjoying the weeks-long slump in gasoline costs, but shale drillers aren’t benefitting from oil’s price break, according to The Observer-Reporter.
In Pennsylvania, Range Resources is one of the largest Marcellus Shale drillers. The company plans to spend less on drilling this year, but at the same time predicts production to surpass last year’s numbers by 20 to 25 percent. In contrast, Antero Resources is laying off contract land brokers in West Virginia due to a drop in oil prices, and U.S. Steel is temporarily shutting down its plant in Lorain, Ohio, because of low oil prices and competition from other countries.
Erica Bowman, chief economist for America’s Natural Gas Alliance says that falling oil prices largely won’t affect shale drillers, but the domestic markets where the gas is used will affect drillers. Liquified natural gas (LNG) will most likely be affected due to a price break for foreign importers.
Via: The Observer-Reporter > Shale gale shows some fraying due to low oil prices
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.