Finances of Fracking: Shale Industry Drills More Debt Than Profit

Since 2007, the oil and gas industry has lost $280 billion betting on the shale boom, which has been made possible by hydraulic fracturing (fracking) and Wall Street financing, and these companies are still borrowing heavily. But even as the industry struggles to recoup costs — much less profits — by continuing to borrow and drill, the great promise of the shale revolution is also threatened by another specter: declining production at each well.

In this series, DeSmog’s Justin Mikulka and Sharon Kelly investigate the finances of the fracking industry and how falling fossil fuel output and questionable lending practices reminiscent of the mid-2000s housing bubble may be setting up another bubble, one with a bill that may ultimately be paid by American taxpayers and the planet.

Image: Wyoming's Jonah gas field is marked by a network of well pads, roads, and pipelines. Credit: Bruce Gordon, EcoFlight, CC BY 2.0

In this series

Drilling rig at twilight
In early 2018 when major financial publications like the Wall Street Journal were predicting a...
By Justin Mikulka, 8 Aug, 2019
Older adults on a beach bench
A year ago, Chesapeake Energy, at one time the nation’s largest natural gas producer, announced it...
By Sharon Kelly, 25 Jul, 2019
Permian Basin
On Monday, the Wall Street Journal featured a profile of Scott Sheffield, CEO of Pioneer Natural...
By Sharon Kelly, 24 Jun, 2019
Steve Schlotterbeck, who led drilling company EQT as it expanded to become the nation’s largest...
By Sharon Kelly, 23 Jun, 2019
Oil pumpjack at sunset
Warren Buffett, CEO of investment holding company Berkshire Hathaway, is considered one of the top...
By Justin Mikulka, 14 May, 2019
Gas station sign reading 'Exxon' and 'On the Run'
After a decade of the American fracking industry burning through hundreds of billions of dollars...
By Justin Mikulka, 18 Apr, 2019
Clippy paperclip art on fracking drill well pad
Two years ago, the U.S. fracking industry was trying to recover from the crash in the price of oil...
By Justin Mikulka, 12 Mar, 2019
Bridge over river with wind turbines in background
Los Angeles Mayor Eric Garcetti recently announced the city is scrapping plans for a multi-billion-...
By Justin Mikulka, 22 Feb, 2019
natural gas flare
The fracked gas industry's long borrowing binge may finally be hitting a hard reality: paying back ...
By Justin Mikulka, 7 Feb, 2019
Pumpjacks in Permian Basin outside Midland, Texas
In 2015, Pioneer Natural Resources filed a report with the federal Securities and Exchange...
By Sharon Kelly, 10 Jan, 2019
Gas flare
2018 was the year the oil and gas industry promised that its darling, the shale fracking revolution...
By Justin Mikulka, 18 Dec, 2018
Fracking well sites from the air, in Jonah, Wyoming
In 2016, lower oil prices led to an overall drop in production for shale companies, which use...
By Justin Mikulka, 30 Oct, 2018
Sign reading "hot water"
The U.S. Environmental Protection Agency (EPA) has clearly documented the multiple risks — despite...
By Justin Mikulka, 18 Sep, 2018
In the climactic final scene in There Will Be Blood — arguably the greatest movie about the oil...
By Justin Mikulka, 10 Aug, 2018
Deepwater Horizon oil rig on fire in Gulf of Mexico
The oil and gas industry is finally acknowledging how dangerous employment can be for its workers...
By Justin Mikulka, 19 Jul, 2018
Fracking rig workers
At a recent industry conference, Terry Spencer, head of natural gas infrastructure company ONEOK,...
By Justin Mikulka, 29 Jun, 2018
Oil pumpjacks in silhouette
Back in 2011, The New York Times first raised concerns about the reliability of America's proved...
By Sharon Kelly, 14 Jun, 2018
Flip this well logo on top of oil pumpjacks
Last year the fracking company Halcón Resources announced a new strategy that was sold as the path...
By Justin Mikulka, 29 May, 2018
Stock market numbers over oil drill pumpjack
Most people probably aren’t familiar with the acronym ZIRP. It stands for zero interest rate policy...
By Justin Mikulka, 11 May, 2018
Solar panels and oil pumpjack
About a half decade ago, as the shale drilling rush was sweeping across the U.S., drillers needed...
By Sharon Kelly, 6 May, 2018
Wall Street sign
The U.S. shale oil industry hailed as a “revolution” has burned through a quarter trillion dollars...
By Justin Mikulka, 4 May, 2018
A Scrabble board spells out 'Bankruptcy' overlaid on an unconventional oil and gas rig
EOG Resources is one of the top companies in the fracking industry, and thanks to the new tax bill...
By Justin Mikulka, 26 Apr, 2018
Gas pump
Shale oil, which the Energy Information Administration projects will represent a rising proportion...
By Sharon Kelly, 24 Apr, 2018
Balmorhea State Park with views of oil and gas well flares
If you ask the CEO of Apache Corp., his company made in 2016 the kind of once-in-a-lifetime find...
By Sharon Kelly, 19 Apr, 2018
Natural gas drilling well pad in Wyoming
In 2008, Aubrey McClendon was the highest paid Fortune 500 CEO in America, a title he earned taking...
By Justin Mikulka, 18 Apr, 2018