For years, it has been known that shale is a goldmine. Embedded deeply in its layers are large naturally occurring deposits of oil and gas. While there is much political debate over what to do with the shale plays in the United States, businesses had been looking for a profitable way to tap into these resources.

Over the last 10 years, the shale mining industry has boomed and with the development of the Marcellus and the Utica in Pennsylvania and Ohio respectively, energy demand has grown steadily with the supply. Although prices are low now, they are projected to rise modestly. As prices rise, the more beneficial it will become for energy businesses to focus on the investment and development of domestic shale plays.

Profitability

No one can deny how profitable the shale mining industry is to the United States. Billions of dollars are spent each year on improving and creating operations and infrastructure. Although the industry requires such a large investment to make profits, it makes a very handsome amount of profits in the billion dollar range. While the investment in the production and mining of shale oil on American soil has historically been frowned upon, there is no denying that it creates endless opportunities for other industries, such as storage, mining, and transport.

Energy Costs

Another consideration should be given to the fact that fracking on American soil significantly lowers energy costs and serves to stimulate other sectors of the economy. Although the domestic production of oil and natural gas is much more profitable that importing it from overseas, it does require stringent regulation.

The shale boom and other related sectors are making local oil and gas manufacturing communities viable again. For example, in the state of Wyoming, the oil and gas industry accounts for at least 30 percent of the state’s revenue. Many other states that rely on the shale mining industry are also dependent on the revenue that it creates. More and more local businesses outside of the industry are starting to reap some of the rewards that the gas and oil boom are bringing. The energy industry boom is creating a trickle-down effect in other sectors.

Supply and Demand

The price of natural gas helps to determine the price of electricity, and while natural gas prices are low, electricity is not as cheap. With the average price of gas being so low, there is some speculation going on about the long-term effects that these prices may have on local economies that are heavily dependent on the shale industry. Although low gas prices increases demand, it brings the amount of revenue down because of the high production costs.

As more energy companies continue to tweak their production and operations, many of them are starting to look towards the future. It has been proven time and time again that businesses that are the most innovative are the ones that will continue to benefit in the long run. If innovation involves energy companies becoming more reliant on gas instead of electricity, then many companies need to shift their focus to building sustainable and reliable short-term and long-term sources of energy.

Joseph Barone
President
ShaleDirectories.com
610.764.1232

www.shaledirectories.com