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Many of us have discussed the environmental costs of fracking, for example The Death-cycle of Fracking .

There is a financial death cycle too Shale Drillers Feast on Junk Debt to Stay on Treadmill

“There’s a lot of Kool-Aid that’s being drunk now by investors,” Tim Gramatovich, who helps manage more than $800 million as chief investment officer of Santa Barbara, California-based Peritus Asset Management LLC. “People lose their discipline. They stop doing the math. They stop doing the accounting. They’re just dreaming the dream, and that’s what’s happening with the shale boom.”
more below the amourous snails.

While small investors (i.e dumb money) are staying in, the big oil companies (i.e. smart money) is bailing out. Oil and gas majors now cutting back in U.S. shale gas fields

British Petroleum, Chevron, ExxonMobil and Royal Dutch Shell have all announced they will be spending less on oil and gas exploration in the U.S. Allen Brooks, Managing Director of Parks Paton Hoepfl & Brown, an independent Houston, Texas based investment banking firm, stated yesterday, “Chevron is the latest major oil company to implicitly declare that the oil industry has entered a new era – one marked by higher costs and more disciplined capital investment programs,”.
Maybe this can stop the environmental destruction -- we certainly cannot expect our political system to do so.
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Comment Preferences

  •  While Big Oil (3+ / 0-)

    may be cutting back, there is a large second tier of companies that are doubling down, especially on gas.

    The largest industrial construction boom in history is taking off in the arc from Houston to Baton Rouge, as developers spend countless billions on new chemical plants fed by cheap gas, both for fuel and feedstock.

    “The answer must be, I think, that beauty and grace are performed whether or not we will or sense them. The least we can do is try to be there.” ― Annie Dillard, Pilgrim at Tinker Creek

    by 6412093 on Wed May 14, 2014 at 10:00:51 AM PDT

  •  Not sure I would call this a death cycle (2+ / 0-)
    Recommended by:
    Gooserock, LakeSuperior

    or even spiral.

    This seems more like a reaction to cheap gas; companies cutting back on exploration and development of new sources during over-supply (which presumably they see as persisting through their planning time frame).

    This is not a sig-line.

    by Joffan on Wed May 14, 2014 at 10:05:24 AM PDT

    •  Seems Like It Would Have to Be This. (2+ / 0-)
      Recommended by:
      Joffan, alypsee1

      If they slow investing in the only oil & gas source left, either they're going to invest in something else -- dare we dream it's green?-- or as you suggest they're just avoiding short term over supply.

      We are seeing the same investment bubble problem clear across the spectrum of human activity.

      And that's because the rich are too God damned rich. There isn't enough growth potential on this planet to provide a return on the trillions of investment money through honest business expansion.

      In every sector, significant amounts of investment has nothing useful to do other than to bet on the gambling of other rich investors. This money isn't contributing any more to humanity than the world's billion or two dirt poor. Only thing is, the useless rich can take us all down, and are preventing us from solving our crises such as climate change. At least the poor have the civility to mostly keep out of the way.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Wed May 14, 2014 at 10:24:15 AM PDT

      [ Parent ]

  •  This will potentially herald (3+ / 0-)

    a collapse in production, shale gas plays are expected to decline precipitously when the production of new wells is slowed/halted.

    Be the change that you want to see in the world

    by New Minas on Wed May 14, 2014 at 10:06:25 AM PDT

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