Saturday, October 20, 2012

After the Boom in Natural Gas

The New York Times has published an article today (Clifford Krauss and Eric Lipton) which tells another sad story related to the gas industry. What happens after the drilling is finished and the roughnecks leave town? Here is what is happening in Louisiana where the Haynesville Shale is located: Click here.


"The bust has certainly hit the Haynesville hard. Some local landowners, having spent their initial lease bonuses, are now deeply in debt. Local restaurants and other businesses are suffering steep losses now that so many drillers have left town."

At its peak, Chesapeake Energy ran 38 rigs in the region.  It has drilled more than 1200 wells into the Haynesville (Louisiana and Texas). Now only 2 rigs are in use. The drillers drilled so many wells and extracted so much gas that they have driven the price of natural gas to near-record lows.  The NYT article explains who is making a lot of money and who is suffering financially now.


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