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Peak Shale: Is the US Fracking Industry Already in Decline?

Read time: 7 mins
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 horizontal drilling and fracking to extract oil and gas from shale formations such as the Marcellus and Permian. This was one of the few relatively positive financial periods for an industry plagued by high costs and low returns (although it still lost money in 2016).

But the industry shouldn't get complacent, warned Robert Clarke of energy industry research and consulting group Wood Mackenzie. Cracks already are starting to emerge in the optimistic forecasts of how much these shale formations can produce, which is a bad sign for turning around the industry's struggling finances.

The Fracking Industry Is Cannibalizing Its Own Production, Increasing Spill Risks

Read time: 6 mins

In the climactic final scene in There Will Be Blood — arguably the greatest movie about the oil industry — the main character played by Daniel Day Lewis explains how he sucked the oil from a neighbor’s land by using horizontal drilling. To help his neighbor understand what has happened, he explains it by saying he took a very long straw and “Drank your milkshake!”

Well, guess what is happening with the fracking revolution built on the concept of horizontal drilling? Not only are oil producers drinking each other’s milkshakes, they are drinking their own, and in the process losing even more money and raising the odds of dangerous environmental risks.

And unlike in the movie where the main character knew what he was doing, the modern fracking industry really has no clue what to do about the problems caused by the combination of horizontal drilling and greed. 

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