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US Drilling Boom Stalls for Oil, Gas

By Harry Kimball, Newser Staff

Posted Mar 14, 2009 3:10 PM CDT

(Newser) – It doesn't pay to drill, baby, drill anymore. Falling world prices have brought an end to the boom in domestic drilling for oil and natural gas, the New York Times reports. Last summer, 2,400 gas and oil rigs were deployed in the hunt for energy. Today, that figure is 1,200 and still dropping. “The big bonanza is over,” said one Texas driller whose company has gone from 35 rigs to 8. “Everyone is really shocked how fast everything has turned.”

Thousands of workers have been laid off, with the cutbacks especially pronounced for natural gas. Analysts worry that if companies cut back too severely, they won't be able to respond quickly if demand picks up. One oil exec said it could take up to 2 years to assemble crews again. “Inevitably, the market doesn’t react,” said one analyst. “It overreacts and shoots itself in the foot.”

[Images (3)]

[Quotes (1)]

A drilling site near Gorham, Kan. (AP Photo)

An oil worker. (AP Photo)

An offshore oil platform. (AP Photo)

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When everybody sobers up after the first quarter and sees what their real cash flow is, people are going to be very discouraged about how much capital they have to spend and that will depress the rig count even further. - G. Steven Farris, Apache Energy

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COMMENTS

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Doctor-Zaius

Mar 16, 2009 11:09 AM CDT

This was a speculative bubble brought to us by our friends at Wall St. There was no reason for Oil to go up to $147 per barrel so when production increased to meet the high price it was only a matter of time before the bubble popped. In a lot of ways this bubble was caused by the housing bubble. High stakes investors were exiting the stock market because of the looming popping of the housing bubble and they ran to commodities and crude oil was their favorite.

Doctor-Zaius

Mar 16, 2009 11:06 AM CDT

Once again you are wrong Mr. Plumber.

riffran

Mar 15, 2009 12:32 PM CDT

Has anybody else noted that everytime oil gets too high, and the U.S. starts to "Wake the F-up, and get on the much needed renewable energy wagon"....oil prices go down as if by MAGIC....and OPEC and all the other big oil entities,(both here and abroad)....loosen the grip?......Kinda like a crack dealer giving away a little product to the junkie thats trying to get clean

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recession • gas prices • natural gas • oil drilling • oil prices • domestic oil production • lay-offs

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