How long does it take to Kill Fracking?

[Mega]

?

Mike

[thriftyandboringinohio]

Re: How long does it take to Kill Fracking?

I suspect it might be impossible to truly kill. Too many people and companies have become good at it, and it's worked on a big scale for too long.
Much of the fracking industry might go into mothballs and become dormant if the price of oil stays low.
But if the price of oil gets high enough again they will start back up. The reserves have been mapped, the mineral rights have been worked out, and the technology is well developed.
It could be restarted.

[GRG55]

Re: How long does it take to Kill Fracking?

?

Mike

The controversy over fracing shows how ignorant and stupid our politicians and population have become. Literally.

Modern hydraulic fracture stimulation (the proper phrase, now contracted to "fracing", NOT "fracking", but then even The Economist spells it incorrectly) originated in the late 1940s in the research labs of Standard Oil of Indiana (one of the original Rockefeller Standard Oil Trust companies, later renamed Amoco Corporation**, now part of the BP empire).

It is not something new. Virtually every single producing clastic reservoir hydrocarbon well drilled anywhere in the world in the last 70 years has been hydraulically fracture stimulated, "fraced", to make it economically productive (carbonate reservoirs are generally acidized or acid fraced).

In the 1980s and 1990s, Texas entrepreneur George P. Mitchell experimented with hydraulic fracture stimulation of the Barnett gas shale near Fort Worth. Eventually Mitchell's company combined new advances in horizontal drilling with hydraulic fracture stimulation to successfully extract the shale gas.

And the rest is history (some of it still being written). Today the industry can routinely drill 10,000 foot horizontal sections, steering the drill bit in real time the whole distance, 2 miles below surface. Exxon's superpads in the Permian have up to eight electric drive "triple" drill rigs running side-by-side, drilling as many as two dozen separate bores off the pad.

This is classic American (USA + Canadian) oil industry technology development and implementation, supported by the deepest financial markets in the world and the most supportive economy/society for entrepreneurial risk taking. It has completely overturned the dynamics of global oil markets. And finished the job of destroying OPEC as a cartel (not that it has been all that effective since the 1973 oil embargo).

There's going to be lots of writedowns, and some bankruptcies of shale drillers. But the oil isn't going to disappear just because an overleveraged company did. There's an old adage in the oil patch, going back many decades: The second owner of the lease makes the most money.

It's the Saudis that currently have their testicles in a vice, not the shale industry in the USA.
Just watch how short lived MbS' impulsive, but ill-considered bravado lasts. Thomas Friedman's "reformer" is increasingly being revealed as a despotic heir apparent. And the Gulf region is slowly turning against him. Watch what the Iranians do via Yemen and other avenues to threaten Saudi oil output if they need to start to neutralize the Saudis flooding the market. This could get very interesting.

As for fracing, it will be around as long as there continues to be drilling of wells in the search for oil and gas. After the last well is drilled and completed the last hydraulic fracture stimulation pumping spread will shut down.

** I started my career in the 1970s as a pup engineer and later a production superintendent at Amoco.

[touchring]

Re: How long does it take to Kill Fracking?

Aren't companies really hedged at least 1 years?