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US shale gas and tight oil industry performance: challenges and opportunities

Companies such as Encana, Shell and Exxon, which banked heavily on making money from shale gas, have declared a total of $35 billion in write-offs due to low natural gas prices and high drilling costs.
The reasons from the write-offs include the constant need to need to drill and acquire leases due to rapid depletion rates, infrastructure needs, transportation costs, increasing costs to manage environmental considerations as operations grow, and importantly, the fact that drilling and hydraulic fracturing costs respond to fluctuations in gas and oil prices as well as demand, leaving little excess profit for long.

Bibliography:
Ivan Sandrea
US shale gas and tight oil industry performance: challenges and opportunities
Oxford Institute for Energy Studies, March 24, 2014

See also:
Andrew Nikiforuk, ‘Natural Gas Is a Bridge to Nowhere’: Cornell Methane Expert. TheTyee.ca, May 23, 2014,

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