Fracking floors energy giants, The US shale gas market is imploding as the price hits a 10-year low, badly hurting the major players

Fracking floors energy giants, The US shale gas market is imploding as the price hits a 10-year low, badly hurting the major players by Tom Bawden, August 19, 2012, The Independent
BHP Billiton is about to become the next victim of the latest asset bubble to burst – US shale gas, the rock-based hydrocarbon that is released via the controversial process of fracking. … On the last Friday of July, BG, the former exploration arm of British Gas, took a $1.3bn exceptional US fracking-related hit, and on the same day the Canadian giant Encana announced a $1.7bn writedown, largely on the back of its US business. A few days later, BP announced it would also take $2.1bn worth of, largely US fracking-related, writedowns. … But while protests in the US have largely failed to curb the shale gas industry’s development, the plummeting gas price is now doing the job for them. … Hydrocarbon producers such as Chesapeake and BHP are furiously switching their fracking resources from gas to oil, which is unlikely to suffer the same depression in its price as gas as the US has the infrastructure in place to export much of the additional oil it produces from shale. … In the longer term, frackers will also benefit as falling gas production pushes up prices, with experts at the analyst Raymond James forecasting that gas will roughly double to about $5 per thousand cubic feet in the next 18 months or so. Furthermore, as an expected flurry of LNG export terminals begin to come onstream in about three years, fracking companies will have a valuable further outlet for their gas – the relatively lucrative European and Asian markets.