purchased for approximately 1 50 2 Considering the average price just a year before 3 34 per gallon it was an astonishing development 3 The low prices were good The rise and fall of gasoline prices can have widespread effects on the economy Why Did Gasoline Prices Fall in 2015 The price of gasoline is impossible to predict from day to day but historical data has shown a clear tendency to experience notably high and low periods An example of the latter began in 2015 One of the most significant factors for this was an oversupply of oil on the market Part of the reason for it was overproduction by leading suppliers to meet the perceived needs of expanding middle classes in other countries Another factor was Iran’s reentry into the international oil markets after sanctions enacted by the United States and other nations were lifted following Iran’s agreement to abandon its nuclear weapons program in July 2015 With so much excess prices dropped until the supply-demand ratio returned to balanced levels news for consumers but not for the oil companies With falling prices came falling earnings and with that came the need to cut jobs Quicksilver Resources Incorporated a Texas-based company that drills for raw petroleum and natural gas was forced to file for bankruptcy in March 2015 and lay off more than 150 members of its workforce A second Texas outfit National Oilwell Varco made plans to cut more than 100 employees and close one of its manufacturing sites 4 Maersk Drilling headquartered in Denmark had to shut down one of its offshore rigs and let all of the rig’s workers go But rather than allow the situation to worsen companies turned to scientific research to find cheaper ways to bring their product to market 6
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TRYING TO DO BETTER One innovation from recent years is a process known as refracking It is similar to the more widely known practice of fracking or hydraulic fracturing This method of extracting hydrocarbons involves breaking up large underground rock formations to free as much of the hydrocarbon as possible Once an initial round of drilling has established early cracks in a formation fluid is pumped underground at an extremely high pressure to widen the fractures and hold them open This makes it easier to insert pump lines and draw out the oil that lies beyond Refracking is the same concept with one notable twist Rather than creating new wells it is used to maximize the production from existing ones When older and less-capable technologies were unable to extract all the oil from a well the first time oil companies are able to use refracking to salvage the well They make tweaks to ensure every possible bit of oil can be retrieved For example they use fracking fluids with different viscosities to find the type that works best for a Hydraulic Fracturing and Earthquakes There has been much speculation in the media about the seismic dangers of hydraulic fracturing However evidence shows the risk of earthquakes from the fracking process itself is low Many fracking treatments have been carried out in the last 60 years and yet only a few isolated seismic events have occurred on the surface However the United States Geological Survey has determined the disposal of wastewater used in the oil and gas extraction process actually does cause earthquakes Most of this wastewater is a brine-type fluid that rises from reservoirs during oil and gas production As it has little use it is then put back into the ground through injection wells This increases the pressure underground and can trigger earthquakes 8
Hydraulic Fracturing In the hydraulic fracturing process fluids pumped underground crack rock formations releasing oil and natural gas The technique has proven effective and profitable but it has also proven controversial It involves moving large amounts of fluid and equipment to the fracking site this transport can take a toll on the environment Environmentalists also say fracking is a distraction from the eventual shift to renewable sources of energy 9
