As the gas industry’s fortunes tanked, the nation’s largest energy company, BP, announced it was pulling out of fracking.
But the oil and gas industry says that as oil prices rise, its future depends on a booming natural gas industry that, unlike oil, is not dependent on drilling for natural gas.
BP said the decision to stop drilling for shale gas, as opposed to other gas sources, came as the company “recognized the profound and immediate impact of the shale gas revolution on the economy.”
“While we’ve made progress over the past few years, the impact of shale gas production is not yet on par with that of oil and natural gas,” BP wrote in a statement, adding that it “looks forward to continuing to work with our partners to explore and develop new sources of natural gas.”
Barcharts natural gas exploration in the Midwestern U.S. is being halted because of the rise of shale and oil production, and it will now focus on gas production in Oklahoma, according to its CEO, Mike Fogleman.
Bartram said it was unlikely that natural gas would supplant oil in the gas-to-gas ratio by 2025.
“Barcharted is not a natural gas company, and we are not a gas company,” he said.
“Barchars natural gas is the same natural gas we produce, but it’s not in a natural form.”
Fogleman said Barcharts will not have any further natural gas production planned in the near term.
Oil companies and some members of Congress are pushing to increase production from shale, including some in Texas, and they say that by 2030 or 2040, shale gas could have a comparable or larger impact to oil production.
Meanwhile, energy companies like Exxon Mobil and Chevron are struggling to keep up with rising gas prices.
On Tuesday, Chevron and Exxon Mobil agreed to merge their businesses, bringing total value of the merged companies at $1.1 trillion.
The merger comes as Chevron and other oil and oil services companies are struggling with an energy price war.
In August, Chevron’s stock fell 3.5% in after-hours trading.
Chevron also reported a $1 billion loss for the third quarter, its biggest since 2006.
It said its drilling rig prices fell 4% and it expects oil rig costs to drop by 2%.
Chevy’s stock was down 2.6% after the merger.
Other energy companies, including ConocoPhillips, Exxon Mobil, and Marathon Oil, reported losses.
Exxon Mobil’s shares were up 4% after Chevron’s announcement.
Coca-Cola said it would merge with PepsiCo, ending the merger that had been rumored for years.
And Chevron, which is owned by billionaire oilman David Rubenstein, said it will buy a stake in Nestle Waters North America.
Nestle, which has a stake worth $8.4 billion, is struggling with declining demand for bottled water and a rising demand for juice.
At least one energy company is hoping that the merger will give it an edge over competitors who are struggling financially.
Shell said it is negotiating a merger with Chevron.
Environmental groups are urging Shell to buy back its assets, which include assets in the Arctic and Arctic Ocean.
While BP is taking the reins of the oil industry, many of the same energy companies are pulling out.
Brent crude prices were down 7% Tuesday and the price of natural-gas crude was down $1 to $51.37 a barrel.