The dramatic fall in oil prices might be great for Wendover casinos but and area mines but not so good for the nascent oil industry that had just begun to explore Nevada.
The cost of oil has fallen to five year lows at under $50 a barrel and according to market watches could go even lower as winter ends and the demand for heating oil falls.
That is great news for consumers. The drop in the cost of energy means more money in their pockets to spend on other things such as furniture and electronics and more money for entertainment like gambling.
But while consumers enjoy the respite oil exploration companies have put their efforts on hold in Nevada and other parts of the country they had been recent looking for black gold.
Much to the joy of the oil and gas industry and to the consternation of Nevada environmentalists the first tracking experimental well in the Silver State was a success.
Located between Elko and Wells the field has been labeled very promising.
”It went great. The job went exactly as planned,” Kevin Vorhaben, Rockies business unit manager for Noble Energy said of Nevada’s first fracking operation, conducted in Elko County.
The operation was observed by officials from the Nevada Division of Minerals and the Nevada Division of Environmental Protection, both charged by the 2013 Legislature to draft regulations guiding hydraulic fracturing activities in Nevada.
About 300,000 gallons of water from an adjoining well drilled for that purpose was used in the first fracking operation, Vorhaben said.
Early research indicates oil, not natural gas, is the hydrocarbon resource available in the project area, Vorhaben said.
“We’re really excited about the initial results,” Vorhaben said of early indications of potential oil resources. “We need more time to be able to assess the real potential.”
Since the early 1980 geologists have looked at Nevada as a prime candidate for oil exploration.
In fact the most productive oil well in the entire country calls the Silver State home.
It was always known that there was some oil in the state. But the issue has been the economics. Back in the early 80’s, when oil was at a then very high $30 a barrel, the economics of exploration and production still weren’t very attractive. At $70 to $90 a barrel, the sales price vastly exceeding the lift cost causes the potential of Nevada to become far more attractive.
In addition to price fracking has put previously unrecoverable oil in reach.
Hydraulic fracturing is the propagation of fractures in a rock layer, as a result of the action of a pressurized fluid. Some hydraulic fractures form naturally—certain veins or dikes are examples—and can create conduits along which gas and petroleum from source rocks may migrate to reservoir rocks.
Induced hydraulic fracturing or hydro fracking, commonly known as fracking or fracking, is a technique used to release petroleum, natural gas (including shale gas, tight gas, and coal seam gas), or other substances for extraction.
Successful fracking has created an oil boom throughout the United States and will according to analysts help turn America into the largest oil producer in the world by the next decade.
And if preliminary tests yield anywhere near there forecasts, Wendover, Ely, Elko and Wells could become part of that boom.
But tracking is not without its opponents who if not many are very vocal but so far very unsuccessful in banning tracking in the Silver State.
While anti-frackers have been successful in some states in limiting or banning the practice, in rural Nevada they are a minority and not a loved one at that.
A petition calling for a fracking ban in White Pine County on the leftist Move.org website from facebook page member Lou Ann Ashby, for example, has garnered less than 300 signatures after more than a week.
And just this year the largest environmental group the Nevada Wilderness Project which made fracking its showcase cause folded for lack of financial support.
In stark contrast to Nevada several states have adopted fracking bans or moratoriums and even where efforts to limit or ban fracking have failed the public outcry against fracking is by no means muted or soft.
The reasons why fracking generates such passion elsewhere in the country while yawns in the Silver State could have a lot to do with Nevada’s mining history and its present.
Built by silver miners and now sustained by gold miners the idea of extracting wealth sometimes at large environmental costs from the earth is not a new one in Nevada.
Fracking for oil and gas may be viewed by the vast majority of Nevadans as the just the newest way to develop and maintain the state’s natural resource industry.
Nevada anti-frackers might however find support from an unlikely source the Las Vegas Gaming Industry supported Southern Nevada Water Authority.
Perhaps the most flamboyant charge against fracking is that gas escaping from drill holes can contaminate the water supply to the point that water from faucets can catch fire.
The SNWA which has plans for a massive pumping system to drain northern Nevada water to Las Vegas might not take kindly to the prospect of flaming water fountains or hotel pools.
Aligning with the SNWA will probably not make the anti-frackers more likable to their neighbors in rural Nevada who mostly view the water pump plans as a declaration of war against their livelihoods.
If however the price for oil stays lower than the cost to get it out of Nevada ground concerns for the environment will remain theoretical.
When oil was over $100 a barrel it made sense to look for in Nevada. Now that is less than $50 it makes sense not to drill at least not now.