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Breitling Oil and Gas CEO Chris Faulkner on how the drought will impact natural gas prices.
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The worst drought in half a century is not only -- -- -- US crops it's also straining energy production.
Because of hydraulic fracturing.
With no rain in sight brightly -- gas already has 12% a plan tracking projects on hold they say at the drop continues the number.
Could rise Chris -- the CEO -- -- gas and he joins me right now.
So Chris it takes get them to crack me if I'm wrong.
Two did twelve million gallons of water to break through one shale is that correct.
Yeah on average -- we spend about expand about six million.
Gallons of water and at the top line we spend about thirteen million gallons of water for a single well.
For a single Phrack in the eagle for shell for example so yes a tremendous amount of water that goes into these wells.
Not understanding Kansas the farmers are basically -- not willing to provide water at this point.
To certain energy producers is that correct.
Less true it's also happening in Texas we have had -- tremendous.
That ease of getting water from the farmers as a back -- source to the public tributaries and streams.
And now that has been shut down the farmers are turning down.
Request from us again water even offered to pay double.
What we used to pay even last year's -- gonna have to find a third back up source if this drought continues until these farmers.
Get the peace of mind they don't need this water for the crops.
Chris what does -- mean for prices of natural gas even shale oil what I relies as a small -- production but natural gas already since.
The last three months or so -- -- about what 70% and we do you think that prices are gonna continue to go higher because of this issue.
Well I think this issue could impact prices and prices could rise of natural gas and also think that this very warm summer.
That's also caused an additional issues to the drought is causing the cooling needs.
In the request for natural gas for that to go up as well as natural gas and run a lot of our power generation.
And then we also use water to cool our power -- -- all of these things are connected to energy and all these things at the drought continues are gonna cause prices to increase.
And you think that prices are gonna increase as far as customer electricity I mean as we've seen this move away from coal.
To natural gas that means that that American customers that are trying to stay cool.
In the drought we're going to be affected.
If we can't fix the issue that we have right now with the water supplies in many years in the US so acute in the drought continues and I think it's very logical to assume by the year end.
As we go into -- if we have a hefty winner it would need after he he now.
We could be a situation -- natural gas prices rise and that in turn is going to be passed downstream to the consumers are number of different factions.
Chris Faulkner -- CEO gas and and drilling excuse -- CEO and Chris it was great to have you wanna talk about this issue expensing would love to have you back.
