Why Fracking Could End the Age of Gas Price Spikes

8/13/13
 
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from NCPA,
8/13/13:

For decades, a specter has haunted the U.S. economy: surging gas prices. From the malaise years of the 1970s to the early 21st century spike when a gallon of gas climbed from $0.90 in 1999 to more than $4 a gallon in 2008, families lived in fear that we were one Middle East conflict away from another painful bite into our paycheck, says Karl Smith, an assistant professor of economics and government at the University of North Carolina.

But what if we could end that pain with one word: Fracking.

Fracking is altogether different. It’s not just an innovative way to get at previously unreachable oil reserves. It alters the very nature of the oil and gasoline supply chain.

A traditional well might produce 50 barrels of oil a day when it opens, but it will produce close to that for more than a generation. Newly fracked wells have been known to produce over 7,000 barrels a day. That torrent will slow to a trickle in as a little as 18 months, but the rush of oil fundamentally changes the dynamics.

Oil is produced so quickly there often isn’t time to lay pipelines. Much of the oil from North Dakota’s prolific Bakken Shale has made it to market by train, which is more expensive but more flexible.

The production of gasoline from domestically-sourced, hydraulically-fracked oil can be ramped up within months, and ever increasing pain at the pump can finally be relieved.

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