How the Financial Crisis Created the Fracking Revolution
(Bloomberg Opinion) -- You can thank the financial crisis and the Federal Reserve for the fracking revolution. That's the connection made by this week's guest on Masters in Business, journalist Bethany McLean, author of the recently published book, "Saudi America: The Truth About Fracking and How It’s Changing the World."
The technology of hydraulic fracturing, which involves injecting fluid under high pressure to create cracks in the deep-rock formations that hold natural gas and crude oil, is capital intensive. It became much more feasible financially when the Fed sliced interest rates to zero after the financial crisis, McLean says.
McLean is a contributing editor to Vanity Fair, and author of numerous books, including "Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron." It was later made into an Academy-Award nominated documentary.
We also discuss how Wells Fargo & Co.s’s ethical corporate culture was replaced with an aggressive sales culture that ultimately led it to disaster. The fallout continues to haunt Wells in terms of fines and damage to it’s once-stellar reputation.
Her favorite books are here; the transcript of our conversation is posted here.
Next week, we speak with David Hall, partner at Rise of the Rest Seed Fund, a venture-capital fund, where he is responsible for investment sourcing, execution and oversight for Revolution portfolio companies.
To contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.”
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