Oil and gas projects delayed due to worker shortage
Thursday, June 8, 2017
Oil and natural gas drillers are struggling to expand production due to a lack of fracking crews after thousands of workers were let go when the price of oil dropped, according to Bloomberg.
Infill Thinking LLC, a research and consulting firm focused on oilfield services and exploration, found that independent drillers in the United States underspent by as much as $2.5 billion, collectively, in the first quarter. The excess capital was largely caused by a lack of fracking crews to handle all of the work they had scheduled.
In some instances, working crews are paying early termination penalties on jobs they signed up for months ago to take higher paying jobs with other companies.
If the worker shortage continues, production increases planned for this summer may get pushed off until 2018, which could create an output bulge and drop oil prices.
Learn more: Bloomberg > Fracking crew shortage may push oil’s biggest bubble to 2018
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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.