A very interesting story broke this week from Frackland.
Indie rock band Here We Go Magic was getting on Route 70 in eastern Ohio when they passed a hitchhiker.
Bass guitarist Jen Turner wanted to pick him up, but a sound guy convinced the band to turn back around.
And boy, are they glad they did.
Frackin’ and Hitchin’
But it’s the reason the band was on the road in this particular area that’s most fascinating…
It was because of the major hydraulic fracturing operations now under way in southwestern Pennsylvania.
When you’re on the road playing shows, you don’t book accommodations ahead of time.
And the band learned the hard way that the fracking boom is so massive, workers have occupied all vacant motel rooms.
Having not booked ahead of time, the band had to keep driving until they reached Ohio, where they finally found a Days Inn with vacancy at four in the morning.
There are about 5,000 wells on top of the Marcellus Formation in that part of Pennsylvania.
Nearly 2,500 new ones are being added each year, with some estimates saying there will be more than 100,000 there in the next few decades.
There will be many more in the rest of the formation that spans from West Virginia to New York.
This one formation alone supplied 6% of our natural gas last year.
That figure will more than double by 2020.
Five years ago drilling companies started showing up, offering to lease the land below the homes of ordinary citizens…
People who, until then, had an average income of $18,285.
Now they’re leasing their land for hundreds of thousands of dollars.
Bill Hartley, a 63-year-old cattle farmer, leased his farm for more than $110,000. He gets a 12.5% royalty on any gas produced there.
That’s not why iconic cult film director John Waters of Pink Flamingo and Hairspray fame was thumbing down an I70 on-ramp when the band’s van flew by.
But it’s part of the reason he got picked up.
If it hadn’t been for the fracking boom, that van wouldn’t have been there.
More than Marcellus
Current fracking operations cover much more than just a corner of Pennsylvania.
There are pockets of shale formations spanning the entire continent.
Trillions in capital are being moved around — going to landowners, pipeline operators, drillers, truckers, water cleaners, and more.
We’ve come to call this outcropping of gas fields the ‘Ring of Fire.’
But be careful when investing. It’s easy to get burned.
With natural gas prices at decade lows, not all companies are making money…
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Call it like you see it,
Nick Hodge
@nickchodge on TwitterNick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street’s Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor’s page.
