Thursday, April 02, 2015

How fracking is changing geo politics

And yet some politicos would rather increase the barriers to fracking rather than drop them. How fracking is reshaping global power (WSJ):

Fracking overnight has relieved Saudi Arabia of its swing-producer dominance. Fracking overnight has relegated the Middle East to a sideshow, albeit a still-important sideshow, in the world economy.

Things change fast and could change back. A sizable share of the world’s oil still flows from the Persian Gulf and so far production has not been disrupted. Prices would shoot up—they’re already creeping up. But a weight on U.S. fracking would also be lifted. At prices below $50, much fracking becomes long-term unprofitable. But then there’s the flip-side: the flexibility exhibited by the U.S. wildcat sector, allowing drilling to ramp up quickly in response to higher prices, helping to counteract any damage to global growth.

No comments: