Gartman: US Fracking Reserves Huge
February 21, 2013
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Dennis Gartman is the man behind The Gartman Letter, a daily newsletter discussing global capital markets. For more than 20 years, The Gartman Letter has tackled the political, economic and social trends shaping the world's markets, and Gartman himself is a frequent guest on CNBC, Bloomberg and other financial media outlets. IndexUniverse’s Managing Editor Olly Ludwig spoke with Gartman at the 2013 Inside ETFs conference in Hollywood, Fla., about his current bullish economic outlook, the improving state of unemployment and his positive stance on fracking.
IU: I wanted to just get your general overview of the economy.
Gartman: Well, the economy is doing a good deal better than Wall Street wants to give it credit for. I don’t think people understand the seriousness with which the changes going on in the energy industry are having an effect on the economy as a whole.
IU: Before this interview, we were speaking about the fracking phenomenon. I’ve heard talk that in some people’s minds, it’s an open question as to how long these new finds are going to last, relative to what the industry has experienced in previous generations. Some believe they have very short productions spans, like 12-18 months, and then that’s it. Is that something you worry about?
Gartman: I'm worried about that all the time, and I think it’s absolutely correct. Fracked oil wells do deliver their reserves very swiftly, and decline very quickly. But what’s important to me is the fact that we’re finding more and more areas to frack every single day. There's an area out in California that’s only just been touched—probably has more frack-able reserves than Saudi Arabia ever dreamt of.
Are the wells that we have recently fracked going to go dry relatively quickly? Yes. Are we going to find areas that will run for 40 years? No. Are we going to continue to find more and more every single day to replace that? Absolutely.
I don’t fear the fact that these wells run dry relatively quickly. Our technology for finding new reserves is so abundantly better, so much better, and we’re finding so much more, that that doesn’t bother me in the slightest.