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Breitling Oil CEO Chris Faulkner on how the nationwide drought is affecting production of oil and natural gas.
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-- toll on farmers but here's a new one the oil and natural gas industry is also getting burned by the dry weather.
It takes about twelve million gallons or eat teen Olympic size swimming pools full of water to operate a single fracking well.
And the dry weather is hurting the drilling industry here with me now is Chris Faulkner the CEO of Franklin oil and gas Chris thanks for coming on the show we appreciate it thank you listen.
I think this one of those things that people haven't thought about don't realize having to do with the drought that you need a lot of water in -- for that matter to -- right.
You're absolutely correct if you look at -- gas industry were dependent upon sand wanted to come from -- -- and their economy's booming because of that and also water.
Thank you mention the -- segment twelve million gallons of water for a single well.
In his country -- today were -- about 2000 wells every single month.
But I think that you're going to be pretty low on the list or who gets the water in the scheme of things I mean ranchers are going to be ahead of you people are going to be -- had -- -- how big deal is that.
Well if you look at if you look at the stream of permits a rancher who's had a ranch for generations he's had a water permit for fifty years he's first in line the -- of he would have to sell lost the rights.
To his water permits we could use -- temporarily by the water from him and that's traditionally how it's worked in has been -- issue.
But the drought now what's concerning the farmers to a level where they say hey.
-- -- -- -- -- -- -- -- -- -- -- -- Yeah is lower quality -- something that you could use our.
Runoff water recycled water I don't outlook clearly there's an industry do bill collection pond we use rain water and things of that nature and try to get the water where we can but the drought has caused issues.
A multiple fronts but right now fresh water also use drinking water were competing with you know different municipalities.
In in local regions for water that now become a very scarce resource.
This really serious issue because we have witnessed the natural gas revolution in this country where you've seen fracking come into play.
The price of natural gas has plummeted consumers are really benefiting from that.
We've talked about the fact that we're shutting down coal plants as a result of relying on this natural gas.
So we do need this natural gas to continue to flow how big of an impact is that having -- production right now how much is being shot and.
You know it's it's going is starting to be an issue it's not a huge issue now but if the drought continues it will be in like you mentioned we're on the road to energy independence and we haven't been there since 1953.
This is the wrong time to start slowing down production of slowing down join in this country and that's a concern that where we're headed.
If we can't get the water at local levels the former stance relatives and there -- no rain we have a bit of a challenge -- of.
It's a natural gas prices have been spiking yesterday we saw that in the futures market closed at a high for all of 2012.
It's something we have been seeing natural gas way way below you know below two dollar absolutely it's up 69%.
Since his tenure load just -- sixty -- -- -- -- quite a turnaround for natural gas.
Oil has remained robust so natural gas is back starting to get near that we -- the breakeven level.
We can start -- natural gas again but our supply in this country is huge we need to start doing things like cold displacement like you mentioned yet and and one of the things that.
Has been driving it of course has been the warmer weather you know people have been using more electricity is that's pushed up the price of natural gas and and but the drought -- started becoming a compounding factor.
And this is -- really serious issue.
It could raise any V the increases we've seen in in our and our supply numbers are -- price it could try to -- -- that we construct taken two steps back and again.
We're still producing six million barrels of oil a day -- -- nineteenth were short all round up around the bend.
And it's not the right time to have these kind of issues -- mother nature dictates a lot of this and we don't.
We don't rain dance I think we ended the day that's -- we're gonna work on that here on money we'll get rain dance together for -- solve all the problems Chris thanks for coming on today we appreciate it thank you.
