Oct 11, 2018
#Saudi America - How US #fracking is unsustainable, with Bethany Maclean (c.f. Enron expose)
The US fracking industry has boomed so much that America is producing enough oil that the country is now a formidable player in the global market. But Bethany McLean, the author of Saudi America: The Truth About Fracking and How It’s Changing the World, says financial risks are lurking beneath the surface.
The US fracking industry was able to grow so quickly on the back of ultra-low interest rates. This is unsustainable, she says, because interest rates are rising and fracking companies have hundreds of billions of dollars of debt.
It’s made even worse because for many of them, the cost of operations is more than they are bringing in from production. McLean compares it to the dot-com bubble that burst at the start of the century. “As long as investors were willing to believe that profits were coming, it all worked — until it didn’t,” she wrote.