A fracking binge in the American shale industry has permanently damaged the country’s oil and gas reserves, threatening hopes for a production recovery and US energy independence, according to one of the sector’s top investors. Wil VanLoh, chief executive of Quantum Energy Partners, a private equity firm that through its portfolio companies is the biggest US driller after ExxonMobil, said too much tracking had “sterilised a lot of the reservoir in North America”.
“That’s the dirty secret about shale,” Mr VanLoh told the Financial Times, noting wells had often been drilled too close to one another. “What we’ve done for the last five years is we’ve drilled the heart out of the watermelon.”Soaring shale production in recent years took the US crude output to 13m barrels a day this year and brought a rise in oil exports, allowing President Donald Trump to proclaim an era of “American energy dominance”.
Total US oil reserves have more than doubled since the start of the century as hydraulic fracturing, or fracking, and horizontal drilling unleashed reserves previously considered out of reach. But the pandemic-induced crash, which sent US crude prices to less than zero in April, has devastated a shale patch that was already out of favor with Wall Street for its failure to generate profits, even while it made the country the world’s biggest oil and gas producer.
The number of operating rigs has collapsed by more than 60 percent since the start of the year. US output is now about nm barrels a day, according to the US Energy Information Administration, or 15 percent less than the peak.