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Bust: Texas Shale Oil

Written by Gary North on March 24, 2015

The shale oil bust has hit Texas. In 2008, it looked like there was no tomorrow. It was like Texas in 1980 — the sky was the limit.

“Houston, we have a problem.”

And then there was one.

In October 2008, there were about 200 drilling rigs searching primarily for natural gas in the Barnett Shale. Everywhere you turned, someone was poking a hole in the ground. Money, as well as gas, was flowing.

But by last week, there was only one rig reportedly working in the Barnett. The derrick in an industrial area along Loop 820 in east Fort Worth almost seemed to be hiding behind its tan sound barrier.

While three additional rigs were brought in this week, the fact you can count the number of area rigs on one hand is a sign of how things have changed in the once highflying Barnett, the 5,000-acre laboratory for shale exploration that ignited a domestic energy revolution.

Plummeting oil and gas prices, along with the seductive lure of bigger payouts in other parts of Texas and across the country, have brought exploration in North Texas nearly to a halt.

“That is just extraordinary, that is almost unbelievable! I would say that is bordering on shocking, yes,” said Karr Ingham, an economist for the Texas Alliance of Energy Producers, when told that for one week there was just one rig operating in the Barnett.

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