The potential for energy independence in the United States is all you hear about in the industry today…
But despite the positive developments, several events have recently occurred that threaten to seriously disrupt the United States’ path toward energy independence.
And this time, the boogeyman isn’t the environmentalist.
Two new dangers to energy production have arrived on the scene…
Threat #1: The Parr Family
The Parr family of Decatur, Texas is the latest threat to energy independence.
Decatur is a small town about 60 miles northwest of Dallas. And it happens to be where Aruba Petroleum has set up its operations.
The problem is, the company runs about 22 wells within a two-mile radius of the Parr family’s home.
Well, when the Parrs noticed that family members were getting really sick – experiencing nosebleeds, rashes, migraines, high blood pressure – they eventually concluded that the pollution and noise from Aruba’s equipment and operations were to blame.
And they ended up suing the company for $66 million.
A good lawyer took on the case… and bam! The jury awarded them $2.9 million.
The decision was important, since it’s the first time we’ve seen an individual win a fracking case in the United States.
Of course, Aruba is appealing – on the grounds that the company was well within state guidelines for its operations. And it’s crucial that we keep a close watch on this case.
You see, if Aruba loses the appeal, it will open the door for thousands of similar suits – even though there’s been no evidence to date that fracking can actually cause bodily injury. (Keep in mind, I’m NOT saying that fracking is either good or bad. But the evidence that anti-fracking advocates bring to the table has been disproved, time and time again.)
Either way, it doesn’t take a rocket scientist to see that it would only take a few verdicts like the one above to wipe out the profits and incentive for fracking natural gas and oil.
Threat #2: A Rash of Train Derailments
A train derailment recently occurred in Virginia. The 125-car train jumped the tracks, causing 13 tanker cars – filled with crude oil from the Bakken – to tumble off the tracks.
It resulted in a massive fireball. And the environmental impact has yet to be determined, since tons of crude oil are still pouring into the James River.
This isn’t the first derailment to occur recently, either.
Indeed, a spate of derailments has hit in recent months.
The biggest and most disastrous derailment occurred in Lac-Megantic, in Quebec, Canada. In that case, 47 residents died, and most of the town was incinerated as oil tankers exploded.
Other accidents have occurred in Alabama, Alberta and North Dakota, as well.
Unsurprisingly, these accidents have prompted an outcry for greater safety measures, stronger rail cars and more regulation of the transportation of crude oil along the rails.
This will ultimately increase infrastructure costs – and, as a result, boost the price per barrel of crude transported in North America via rail.
These companies will likely continue to see increased demand for their services, as pipelines are perceived to be the much safer option compared to rail transport.
Bottom line: We’ll continue to watch these situations closely. The impact on the energy industry – and the potential for energy independence in the United States – cannot be understated.
And “the chase” continues,