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Shale fuelling a looming energy credit crunch

The financial woes of the US’ largest unconventional gas players could not only destabilise the energy sector, they pose a threat to the wider economy, argues Dr Ruud Weijermars*

The US’ towering shale-gas firms, led by the country’s second-largest producer, Chesapeake Energy, are under severe strain – and their financial problems pose a growing threat to supplies in the world’s largest energy market. If things go wrong, the fallout could bring more turmoil to a fragile global economy. It’s a story in which these firms are the victims of their own success. Soaring shale-gas production in the past five years has created a glut. And with output continuing to rise, exceptional price volatility in the US and Canadian natural-gas markets has pushed nearly all North American shale-gas operators closer to the brink of failure. Henry Hub prices have collapsed to far below t

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