Research carried out by the Washington’s blog collecting statements from articles from reputable publications suggest that fracking, the controversial method of extracting gas by breaking rocks and injecting large amounts of water and chemicals to displace gas, may be not just ecologically unsound but also financially unviable.
Contamination of water supplies and small earthquakes are but some of the reported problems that have taken local people and activists to question the licenses already being given to fracking companies in the UK.
The study on the Washington’s blog titled “Shale Fracking Is a “Ponzi Scheme” … “This Decade’s Version of The Dotcom Bubble” … “A Lot In Common With the Subprime Mortgage Market Just Before It Melted Down” quotes The New York Times 2011:
“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”
Also: “And now these corporate giants are having an Enron moment,” a retired geologist from a major oil and gas company wrote in a February e-mail about other companies invested in shale gas.”
“A review of more than 9,000 wells, using data from 2003 to 2009, shows that — based on widely used industry assumptions about the market price of gas and the cost of drilling and operating a well — less than 10 percent of the wells had recouped their estimated costs by the time they were seven years old.”
“Although the bankers made a lot of money from the deal making and a handful of energy companies made fortunes by exiting at the market’s peak, most of the industry has been bloodied — forced to sell assets, take huge write-offs and shift as many drill rigs as possible from gas exploration to oil, whose price has held up much better”.
“In the future, shale will be recognised as this decade’s version of the dotcom bubble. In the shorter term, it’s a counsel of despair as an energy supply squeeze draws ever nearer”.
In common with the carbon emissions trading market, purportedly presented as a way to reduce carbon emissions but in reality used mainly to add another item of speculative stock, the fracking stampede will only make rich bankers and speculators, leaving behind destroyed communities and environmental disasters, perhaps even kick-starting another worldwide crash (there are several candidates for this, as the behaviour of the international financial system that led to the 2007 crach has not changed in any substantial way).
Thanks to Critical Thinking for highlighting this important issue.