Groovygirl has mentioned in previous posts her opinion that natural gas “fracking” should have more in-depth research regarding its impact on the environment and any long-term issues, such as earthquakes and faultline pressures.
But this is not what she had in mind: new Executive order that allows a large number of government agencies power over this industry. Click here.
(GG has also mentioned her concern that the debt liabilities for fracking wells are 10 years, but the wells seem to continue to come up short, petering out at 3-4 years. Not as profitable in reality as they are on paper.)
This order seems like an overreaction to the potential concerns of this industry and its process, so gg sees a red flag, or a distraction from the real issue.
So, a little history, once the fracking process was discovered, banks started lending a lot of money into the industry. Fracking companies started leasing as much land as possible. (GG’s personal opinion is that since the fracking wells can not possibly meet their long-term debt obligations, the industry must dig new wells to roll over the old debt.)
Another issue was the government rule that a fracking company must dig a well on leased or purchased land within three years. The rule was to presumably keep companies from just buying land and sitting on it. This hyper-drive of natural gas production has created an over-supply and lowered the price dramatically. Companies are running out of places to store it.
But there are a couple of things that have happened in the last year that seem to contradict each other:
- Plans to reverse the flow of the natural gas pipelines to sell extra natural gas to Canada has been limited.
- Plans to build new pipeline(s) have been scraped.
- Government agency has reversed its position that fracking causes earthquakes.
If the US has such a glutton of natural gas (especially short-term), why not sell it to Canada or Europe? If the US has such a glutton of natural gas, why not build an infrastructure to use as fuel nationally?
Recently gg read that the trucking industry was thinking about creating their own infrastructure for their industry (since the government wasn’t taking the lead).
And now, the government is going to regulate the industry. In fact, up to 13 agencies will be involved. And it is an Executive order, not an act of Congress, seems a little strange to gg.
So, it raises some questions for groovygirl: is this order part of the plan to keep the petro-dollar (and thus the US dollar) as the global reserve currency by controlling any cheap resources that may pop up? Or is this the president looking forward and creating an infrastructure of cheaper finite energy to move us into the alternative energy age? Is this a hoarding of resources issue?
Preserving the US dollar is paramount to the preservation of the American Empire. So, gg is leaning toward this conclusion, but we will soon see the true intent of these 13 agencies.
Side musing: noting gg’s thoughts that the industry “rolls over debt”, banks and natural gas companies could hit a brick wall of insolvency if the government changes the rules too much. That could bring this gluttony of natural gas to an end very quickly.
Click here for the gas situation in Australia. Kind of interesting.