Understanding the Shale Boom and Its Effects

Understanding the Shale Boom and Its Effects

The shale boom helped to monetize an important natural resource. There’s always been fossil fuel trapped in shale formations. However, it was always difficult to access. Originally, oil and gas companies had to wait for natural breaks in the rock to make the gas accessible. The development of fracking in the first half of the 20th century made it possible to drill down. Advances in fracking over the past 20 years have made it possible to extract much more. Deeper drilling in hydraulic fracking has meant big things for countries like the United States and Canada. Governments love the idea of accessing these gas and light oil deposits, and it’s easy to see why. The shale boom has taken power from the hands of cartels like OPEC. By knocking them back on their heels, the West is getting closer to true energy independence. However, the big oil and gas companies aren’t thrilled about the shale boom. They haven’t been able to capitalize on it. Because there’s more supply of natural gas and light oil than before, prices are falling. The outlook for the companies hasn’t been that great. Though they’re making a profit, it’s not going as far as they need it to. The shale boom required a lot of investment in new technology. That means taking on some debt. Then 2008 created a recession that was felt the world over, in every industry. It’s also fairly expensive to extract this natural resource. Because the drilling is deeper than ever, it’s also more expensive than it used to be. Paying back the investment that makes this possible will take...