How Long Can the U.S. Oil Boom Last?
The long-term problem for oil frackers isn't just low prices. It's low reserves.
Now that oil prices have dropped to levels not seen since 2009, helped by a flood of oil flowing from hydraulic fracturing or fracking wells in North Dakota and Texas, it's time to ask the question: How long can the U.S. oil boom last?
In the short term, the price drop threatens profits from fracking, which is more expensive than conventional drilling. Sure enough, permit applications to drill oil and gas wells in the U.S declined almost 40 percent in November.
But in the long term, the U.S. oil boom faces an even more serious constraint: Though daily production now rivals Saudi Arabia's, it's coming from underground reserves that are a small fraction of the ones in the Middle East.