NEW YORK (APP) – Producers of oil and gas from once hard-to-tap shale deposits are now facing the payback of the energy revolution they wrought: ultra-low prices forcing them out of business.
This year is expected to be a make-or-break year for US shale producers, after the 70 percent plunge in crude prices, with many at risk of failure.
Dozens of shale drillers sought bankruptcy protection in the last year as low oil prices made their operations uncompetitive and they could not pay debts.
But many are holding on toughly, hoping desperately for a turnaround in the market.
It has been a rapid reversal for an industry barely a decade old. While shale and other deep-rock strata have long been known to hold substantial oil and gas deposits, it was only recently that techniques were developed to economically tap this “tight” oil by hydraulic fracturing, or “fracking” the strata to release it.
Encouraged by US policy to cut the country’s dependence on imported energy, the fracking revolution led to a stunning increase in US domestic crude oil production.