Halliburton chairman says oil drillers should be celebrated like Amazon and Uber
America’s drillers have made huge strides in hydraulic fracturing, or fracking, which has enabled energy producers to extract massive amounts of oil from the country’s enormous shale basins.
This has helped keep supply abundant and prices low for consumers.
David Lesar, the chairman and former CEO of Halliburton (HAL), laments that the oil sector hasn’t been recognized the same way as tech industry titans like Amazon (AMZN), Facebook (FB) and Tesla (TSLA).
“[Independent oil companies] are your classic American entrepreneurs, and their success should recognized,” said Lesar on the oilfield producer’s second quarter conference call Monday. “In Silicon Valley, such a success would be greatly celebrated as another industry disruptor. The unconventional disruption is not widely celebrated beyond the energy space. But it should be. The development of US unconventional resources has been as disruptive to the global energy market as Amazon has been to Big Box Retailing or Uber to the taxi business.”
Interior Secretary Ryan Zinke said in May that fracking is a global game-changer to allow the US to be not just independent but energy-dominant.
“It unleashed a wave of cheap, reliable energy that has disrupted global geopolitical and energy dynamics, made the US more energy independent, caused OPEC to react and changed the fundamental economic of offshore production,” Lesar added. “And I believe it is created a hundreds of billions of dollars of economic value, added hundreds of millions of dollars to government tax coffers and provided untold savings for consumers. So unconventional is what I would call a disruptor, so let’s celebrate that.”
Indeed, the unconventional energy revolution and developments in horizontal drilling has increased the likelihood of US energy independence. Hydraulic fracturing, which fractures rocks below the earth’s surface by injecting chemicals and liquids at high pressure, has allowed companies to access oil and natural gas formations previously untouched. Modern-day fracking enabled a production boom that started in 1998 with real results coming a decade later. Areas like the Bakken Formation in North Dakota or the Utica Shale in Ohio became growth areas for companies.
Lesar’s quotes, which were pointed out by Avondale Asset Management’s Scott Krisiloff, juxtaposes an industry in the cross-hairs of environmental watchdogs with one transforming consumer behavior. Lesar did not address the environmental concerns that these new drillng methods have sparked, particularly regarding water contamination and local pollution.
For the time being at least, it seems Amazon will be more celebrated by Americans. But, especially with the support of President Trump’s administration, we will see if Lesar gets his wish down the road.
Nicole Sinclair is markets correspondent for Yahoo Finance
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