The problem Despite all the tv commercials about how many jobs fracking is creating the truth is that the number of producing Fracked Natural gas wells have declined by more than 50%.
According to Baker Hughes, the number of drilling rigs engaged in natural gas drilling has dropped from 936 one year ago to 422, for the week ended October 12, 2012.
Why is the question water maybe one reason several already drilled and producing Fracked wells have been abandoned.
Fracking requires a huge amount of water many already fracked Natural gas wells need to be reFracked in order to keep producing Natural gas and refracking means more water is needed.
Drilling a typical Chesapeake
Barnett deep shale gas well requires approximately 250,000
gallons of water.
Water is also used in hydraulic fracturing, where a mixture
of water and sand is injected into the deep shale at a high
pressure to create small cracks in the rock which allow gas
to flow. Hydraulically fracturing a typical Chesapeake
Barnett horizontal deep shale gas well requires an average of
2.5 million gallons per well.
Notice in the map below just how much of America is experiencing a drought. you can’t frack if you don’t have the water.
Big companies like Chesapeake and lesser-known outfits like Quicksilver Resources andExco Resources were able to supercharge their growth with the global financing, transforming the face of energy in this country. In all, the top 50 oil and gas companies raised and spent an annual average of $126 billion over the last six years on drilling, land acquisition and other capital costs within the United States, double their capital spending as of 2005, according to an analysis by Ernst & Young.
Now the gas companies are committed to spending far more to produce gas than they can earn selling it. Their stock prices and debt ratings have been hammered.
Berman claims that prices $8.68 or higher per million Btu are needed for profitability ofHaynesville Shale, and nearly as high prices are needed to justify drilling other US shale plays. The current US price is about $3.50 per million
Fracking wastes millions of gallons of water and we are in a drought.
Fracking losses money at today’s prices. When prices are low production should be allowed to drop until demand drives up prices to a point where production makes money!
Our banks the efficient allocators of capital that they are/s
are acting like loan sharks and demanding that they get paid now even if it means the Frackers go under.
Fracking will not make America an energy exporter
Our shale gas resources, however, while much ballyhooed in the press, are far less certain. We may now have a 100-year supply of gas in America, as suggested by recent reports. . . or we may not. The U.S. consumes 24 tcf of gas per year. Currently, we only have an 11-year supply on the books: 273 tcf classified as “proved reserves,” meaning gas that is commercially producible at a 10 percent discount rate. Beyond that, there are only “probable,” “possible,” and “speculative” resources, where the gas has not yet actually been discovered, or proved to be economically recoverable. Even where we are sure that the resources exist, we do not know how much of is technically recoverable until we produce it. And as I noted two weeks ago, in the EIA’s Low Case shale gas estimate, the U.S. could become a net gas importer by 2035.
But loans made to Fracking Comapnies Liquid Natural Gas plants, ports, ships, Natural gas Pipelines etc very well might bankrupt our banks.