Matt Forney
Spread the Word!


Before I resolutely decided to hike across America to Portland, I seriously considered hopping on a bus to Williston, North Dakota instead. If you’ve been reading the news, you know that Williston is the oil boomtown that’s been hiring guys for jobs paying up $120,000 a year without any prior qualifications. As a result, jobless men have been piling in from across the country looking for a share of the black gold wealth.

I might still end up in Williston, seeing as I’ll be passing through North Dakota on my way to the West Coast. But it looks like church is about out on the oil boom:

Oil prices have fallen sharply in the past two months, with Brent crude sinking to $97 a barrel and West Texas Intermediate hitting $83. The explanation is simple: Since March, the world has been producing more oil than it’s consuming, according to data gathered by the Energy Intelligence Group. Global oil consumption has been declining since the end of 2011, falling to 88.5 million barrels per day at the end of April, from 90.4 million barrels per day in late December 2011. At the same time, world oil production has risen steadily for more than a year, driven by new finds and drilling techniques in North America and a 10 percent increase in production from OPEC during the past 12 months. The last time supply outstripped demand was in 2006.

One thing that’s been lost in all the sturm und drang about hydrofracking, shale oil and oil sands is that these extraction methods are only viable if the price of oil is sufficiently high. If it dips below a certain point and stays there, everyone involved in the oil boom is going to lose their shirts. Oil prices are falling because global demand for oil is falling, because the economic “recovery” touted by our wise and munificent leaders was always a crock of horseshit. OPEC and other oil exporting countries like Canada can try to slow the fall by cutting production, but re-igniting consumer demand is the only way to stop it.

The party always ends. The bar closes up, the whiskey runs out, the strippers go home and leave you with the hangover.

Remember how oil and gas prices cratered two months before the last presidential election? I watched gas go from around $3.30 a gallon to $2.20 a gallon in the span of three weeks. We’re repeating history here, only this time the hangover will be even worse because of the hydrofracking and oil bubbles. Take a look at this article from Mother Jones (a hippie rag to be sure, but stopped clocks are right twice a day) on the environmental devastation hydrofracking has wreaked on rural Wisconsin. As is typical of economic booms, we’ve rushed headlong into fracking without a thought as to the long-term consequences.

When hydrofracking is no longer commercially viable, do you think the oil companies are going to clean up the mess they’ve made? Yeah right!

I predict that before the year is done, fracking and oil sands are going to go bust and take what’s left of the economy with them. Williston and other boomtowns will become ghost towns as the oil companies pull up stakes and run. Canada in particular is going to get slapped with a vicious depression, because they’ve been busy murdering what’s left of their manufacturing sector back East to support an unsustainable oil bubble in Alberta and Saskatchewan.

And everyone who bought into the hydrofracking craze is going to be left with egg on their face, because they’ll be penniless and jobless with nothing to show for it but exploded mountains and silica dust clouds.

Hangovers are no fun. We’re all about to experience the consequences of economic binge drinking.

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