Guess what’s not happening in Illinois? Fracking. The plunge in the price of oil has made fracking here a bad investment, at least for now, and this pleases Lora Chamberlain of the group Frack Free Illinois. “We are absolutely celebrating this respite. We think that it might be just a respite. This is a very complex, international situation, right? But what we’re very happy about is that it is inhibiting investment from coming into Illinois for very dangerous high-volume fracking,” she said.
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Fracking rules have been in place since November, but no one has applied for a permit.
It’s hard to say at what price point for oil Illinois becomes profitable. Oil is now trading at $45 a barrel, down 59 percent since June and lower than it has been since 2009. Some people in the industry say fracking can make sense if oil is in the $50 range, but in Illinois, with none of the drilling infrastructure in pace yet, the price will have to be higher than that to warrant the initial investment.
The expectation is that oil companies will wait for the price to rise, and start fracking here if and when that happens. In the meantime, they’ll have to decide whether to renew land and mineral rights leases that expire while they’re waiting for more favorable economics.