Let us Make World Easier to Understand

Steven Kopits  Horizontal drilling and hydrofracking have revolutionized not only the oil business but also the global economy. They have reduced the price of a barrel of oil by 60 per cent and chopped the US oil trade deficit by US$300 billion per year. Neither horizontal drilling nor fracking were new. Directional drilling goes back to the 1930s, and modern horizontal drilling was practiced more than a quarter century ago. Hydrofracturing wells – fracking – to improve the flow from an oil or gas reservoir has been a standard well completion technique since 1950. Shale production began with gas, as shale oil was considered to be unsuitable for commercial extraction. With natural gas in the US typically selling at $7.00 per million British Thermal units (mmbtu) after 2005 – and as high as $12 per mmbtu in 2008 – shale operators had every incentive to borrow money and drill for gas. By late 2009, shale gas was so successful that gas prices were falling and the...