Appalachian Basin struggles as oil and gas prices bottom out
Friday, May 1, 2020
Things were bad before the COVID-19 pandemic started impacting the market; however, they’ve gotten so much worse since then, some companies might not recover, according to Farm and Dairy.
“Not everybody is going to be able to make it through this,” said Mike Chadsey, director of public relations for the Ohio Oil and Gas Association. “Times were tight to begin with.”
Before the pandemic, the price of natural gas was low — around $2 per million British Thermal Units — there was a glut of it on the market and due to a mild winter people didn’t need to use as much fuel to heat their homes.
Now, all the same problems exist, demand for gasoline in the U.S. had dropped by 45% since mid-March and storage capacity is diminished, creating an even tougher situation for producers to escape.
Learn more: Farm and Dairy > Ohio oil and gas industry hits slump
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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.