"Thanks to the Fed’s zero-interest-rate policy and the trillions it has handed to its cronies since late 2008, boundless sums of money went searching for a place to go, and they were chasing yield where there was none, and so they took risks, any kind of risks, in their vain battle to come out ahead, and some of this money found its way to natural gas drilling. It coincided with innovation – the combination of horizontal drilling and hydraulic fracturing that unlocked vast reserves of natural gas in shale formations across much of the US. Result: a debt-fueled drilling bubble. It ended in a glut that knocked the price of gas from its peak of $13 per million Btu to a 10-year low of $1.92 last April ... In other parts of the world, natural gas was six, seven, and in Japan over eight times more expensive than in the US ... US gas production is essentially landlocked. It was the darkest hour for natural gas. The industry was ravaged by a price that was far below production costs ... [Producers] shifted from drilling for “dry” gas to wells whose mix contained larger portions of oil and natural-gas liquids, which sold for higher prices and made wells profitable. Production leveled off ... The big question: what is the cost of production of dry natural gas over the life of the well? ... Christophe de Margerie, CEO of French mega-oil company Total, which is involved in shale gas projects in Texas and Ohio, let it slip that his company would not restart production of dry gas until the price reached the breakeven point [of $6/mmBtu]."

Zum Artikel von Wolf Richter, erschienen auf Testosterone Pit (18. April 2013) »