How fracking is changing the world

Daniel Gallington:
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... a recent public report by the National Intelligence Council says that modern fracking for oil in the United States is a "technological revolution, which won't be completely understood for some time." And that "in a tectonic shift, energy independence is not unrealistic for the US in as short a period as 10-20 years."

Perhaps even more important, the report observes that:
A dramatic expansion of US production could also push global spare capacity to exceed 8 million barrels per day, at which point OPEC could lose price control and crude oil prices would drop, possibly sharply. Such a drop would take a heavy toll on many energy producers who are increasingly dependent on relatively high energy prices to balance their budgets.

While many of us might hope there is a real possibility for the demise of OPEC price control, it's also possible that it might not be allowed to happen—for reasons of corporate greed—together with a basic failure of our strategic energy policy. Why? OPEC not only sets the world price of oil, but the price it sets also directly affects—and thereby indirectly sets—the prices of alternative fuels, and also the oil produced from fracking. 
In other words, if you were a "fracker" would you prefer to sell your oil at 1) the high OPEC-set price, or 2) a price that was derived—and thereby lowered—by the wide-scale effects of your own production? Also, let's not forget that the primary reason fracking has flourished as robustly as it has is because of the historically high oil prices set by OPEC—i.e., if prices were low, would frackers be motivated to produce oil at all?

So, it's not surprising that most everyone in the "oil business", whether alternative fuels or not, wants high prices to continue forever—the higher the better—no matter how they are determined and no matter who does it. And, because price fixing is mostly illegal here, the huge, multinational oil companies gladly defer to the simple greed reflected in OPEC world oil price setting.
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I have seen reports that suggest that fracking would be profitable as long as the price of oil stayed above $70 a barrel.  I suspect it would be profitable at a lower price now because they are getting more production from wells than they expected.  Before there was OPEC the Texas Railroad Commission controlled prices to some extent by limiting production.  In the seventies that changed when there was no excess production and the Middle East suppliers starting restricting supply in reaction to the loss of wars with Israel.

Producers can't control the price through collusion in the US because of the anti trust laws.  Right now, the Interior Department is to some extent controlling supply by not allowing production in certain offshore tracks and elsewhere on federal controlled sites.

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