Shale Band
Categories: Econ
The Shale Band: a terrible name for a band, but a great name for a price-band based on shale.
Shale is short for shale oil, or shale gas. It didn’t used to be considered a usable energy source, since we didn’t have the technology to extract and refine it...until hydraulic fracking came along. Thanks to fracking, the shale supply has entered the oil and gas market, particularly with all the shale in North America. With this new supply of oil and gas, we can expect markets to change in response.
The shale band refers to an upper and lower price band that North American shale can be accessed via fracking. The original band was quoted at $45 per barrel for the lower price and $65 per barrel for the higher price.
The shale band is key info if we want to know how shale could potentially affect oil and gas prices. Our ability to process shale has thrown in more oil and gas supply into the gas 'n' oil market. More supply of oil and gas means a few things. For one, it means prices can stay lower for longer. As our supply of these resources runs out, prices will rise. The other thing the shale band can affect is pushing the demand for alternative energies farther out in time. As oil and gas start running out and prices rise, this makes energies like nuclear and solar look more appealing. When those alternative energy sources become cheaper, society will switch over. The shale band will extend that timeline, since it will continue our dependence on oil and gas.
