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Could Fracking Debt Set off Big Financial Tremors?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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Mystery and high stakes often go together, as is the case with fracking — the process of using high pressure to extract oil and gas from shale rocks buried deep under the earth’s surface. Fracking companies are hot destinations for investors chasing yields and growth industries, especially private equity companies, in part because of the large appetite the capital intensive industry has for debt. However, several warning signs suggest the fracking industry not only may fall short of investor expectations, but also could actually help to precipitate the next financial crisis. Bethany McLean, a contributing editor at Vanity Fair magazine, explores those fears in her newly published book, Saudi America: The Truth About Fracking and How It’s Changing the World . She delved into those issues also in a recent op-ed article in The New York Times titled, “The Next Financial Crisis Lurks Underground.” The International Energy Agency earlier this year captured the significance of the U.S. shale industry in a report .…

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