For Sublette County, at the heart of Wyoming’s natural gas industry, the drilling boom of recent years has not been without cost. A socio-economic report issued this month highlights a sharp rise in crystal meth abuse in the area. The drug has appalling side-effects but it is cheap and it keeps users unnaturally alert during a 12-hour shift on the rig.
Gas production in US onshore regions is booming: Wyoming’s output has grown faster than any other state’s over the past five years. No wonder the gas-weighted US exploration and production companies are trading at a premium to the sector of 18 per cent, based on 2008 earnings estimates. Bulls point to a flat count of natural gas rigs as justification for this high valuation. Typically, when the rig count is not expanding, gas supply tightens and prices climb. Winter 2008 Nymex gas contracts have indeed risen in the past three months.
Focusing on movements in the rig count, however, can be deceptive. Rigs are being worked harder (hence those long shifts)....MORE
