Energy - DeSmog - Key Takeaway: *The fracking industry has helped set new records for U.S. oil production while continuing to lose huge amounts of money — and that was before the recent crash in oil prices.*
But plenty of people in the industry and media make it sound like a much different, and more profitable, story.
Shale Oil Industry 'More Profitable Than Ever' — Or Is It?
However, Reuters recently analyzed 32 fracking companies and declared that “U.S. shale firms are more profitable than ever after a strong third quarter.” How is this possible?
Reading a bit further reveals what Reuters considers “profits.”
“The group’s cash flow deficit has narrowed to $945 million as U.S. benchmark crude hit $70 a barrel and production soared,” reported Reuters.
So, “more profitable than ever” means that those 32 companies are running a deficit of nearly $1 billion. That does not meet the accepted definition of profit.
A separate analysis released earlier this month by the Institute for Energy Economics and Financial Analysis and The Sightline Institute also reviewed 32 companies in the fracking industry and reached the same conclusion: “The 32 mid-size U.S. exploration companies included in this review reported nearly $1 billion in negative cash flows through September.”