Financial Co-Dependency: How Wall Street Has Kept Shale Alive | EnergyPolicyForum

Financial Co-Dependency: How Wall Street Has Kept Shale Alive | EnergyPolicyForum

On October 21, 2012, the New York Times published an article delving in depth into the relationships between large Wall Street investment banks and shale gas operators. The article is outstanding but so much more needs to be said.
For nearly a year I have been giving presentations on this phenomenon which I refer to as financial co-dependency. A dysfunctional relationship, yes, but one which has been very lucrative for certain elite players, most particularly the investment banks and a few top oil and gas executives.
There is no doubt that the investment banking community has been the driving force behind shale production since the economic downturn. Shale should have unravelled long before now. But Wall Street saw an opportunity to generate massive fees and so shale was taken to new heights. Or perhaps some would say new depths. In August of 2011, Neal Anderson of Wood Mackenzie had this to say about the investment community and shale exploration: