Given how big-time screwed we were on this even a decade ago, it’s remarkable we can even have this conversation. Ever since George H.W. Bush’s 1990 Gulf War – and even before – people both inside and outside of America have accused the United States government of fighting wars over nothing more than oil. So, did these “blood for oil” believers have a point?

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They probably did on some level but, back then, the question was largely irrelevant. Like it or not, we had forced ourselves into a position where we had to ensure stability in the Persian Gulf. Let the Sunni and Shia civil war in Iraq escalate into a regional war? No chance. Kiss up to the Saudis? Had to. Be new best friends with Angola’s insanely corrupt leaders? You better believe it.​ For decades, energy drove our foreign policy agenda because, until fairly recently, foreign nations were in absolute control of our energy survival. The undisputed truth was that U.S. supply did not meet U.S. demand. It wasn’t even close. So, we were basically stuck.

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Fast-forward to today. Pretty much everything about our energy supply situation has dramatically changed. The International Energy Agency’s 2018 World Energy Outlook revealed that we had become the world’s largest oil and gas producer.

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Wow! That’s great, right? What a turnaround! Not so fast. Our energy self-sufficiency came at a huge cost. In truth, it was only achievable because we tapped into fields like the Permian Basin, which is in western Texas and southeastern New Mexico and provides 40-50 percent of all American oil production… and we were only able to access fields like the Permian Basin because of the F Word: Fracking.

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We’re going to skip the moral debate over fracking for the moment and just jump to the fact that it’s not sustainable long-term. The first thing that makes fracking unsustainable is that it takes an enormous amount of water to frack, a reality that has significantly taxed our already depleted aquifers. Since 2011, fracking has consumed over 1.5 trillion gallons of water.

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An exhaustive 2023 investigation by The New York Times revealed that – thanks largely to industrial farming and the need for drinking water – “America’s life-giving resource (water) is being exhausted in much of the country, and in many cases it won’t come back. Huge industrial farms and sprawling cities are draining aquifers that could take centuries or millenniums to replenish themselves if they recover at all.”

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After analyzing tens of thousands of groundwater monitoring wells, The Times found that almost half the sites have “declined significantly” over the past 40 years. Four of every ten sites hit historic lows in the past decade, with 2022 being the worst year yet. Already, they reported, the major aquifer beneath Kansas could no longer support industrial-scale agriculture, causing corn yields to “plummet,” and Arkansas was using more than twice as much water from its main agricultural aquifer as rainfall and other sources were putting back in. Arizona had to halt any new home construction that relied on aquifers in Phoenix and drinking water on Long Island was being threatened. “In other areas, including parts of Utah, California and Texas, so much water was being pumped up that it was causing roads to buckle, foundations to crack and fissures to open in the earth.” The earth literally breaking apart is clearly bad, but over-pumping can also release the cancer-causing heavy metal arsenic into the water supply.

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This is an incredibly serious issue because we are running out of water. Thanks to a crippling drought and an industrial boom that are depleting its reservoirs, Corpus Christi, Texas, faces a severe water shortage, threatening industrial operations and the water supply for over 500,000 people in seven counties, including those on a Navy base that service combat aircraft like Black Hawks. Corpus Christi attracted over $57.4 billion in investment over the past ten years, luring plants for the likes of Tesla, Exxon Mobil, and even Saudi Basic Industries Corp., the kingdom’s petrochemicals company. I’m sure it seemed like a smart idea at the time, but these plants use massive amounts of water to do things like refine lithium for electric-vehicle batteries and transform fossil fuels into gasoline, jet fuel and other refined products. The Wall Street Journal reports that the Saudi’s $7 billion plastics facility alone consumes an average of around 13 million gallons of water a day – about 13 percent of all of Corpus Christi’s water demand in wintertime.

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Mike Howard, chief executive of Howard Energy Partners – an energy company that owns several facilities in Corpus Christi – put it bluntly, “The water situation in South Texas is about as dire as I’ve ever seen it. It has all the energy in the world, and it doesn’t have water.” 

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The Colorado River is also in crisis and the seven states that rely on its water can’t seem to figure out what to do about it – putting 40 million people at risk. Lake Powell is so low that there’s a chance its hydroelectric plant will no longer produce power, risking the flow of water to Arizona and California. The Colorado River Research Group put it like this: “Conditions on the Colorado River are, to put it bluntly, dire. The reservoirs that, when full, provide Colorado River water users with roughly four years of annual flows are now more than two-thirds empty… Both the water supply and institutional systems are failing; many of the environmental systems failed years ago, with others just hanging on desperately. Another year or two of low inflows and we will completely blow through the cushions provided by reservoir storage… entering a world where physically moving water downstream becomes limited both by hydrology and engineering.”

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The second thing that makes fracking unsustainable is that it is really, really, really expensive.

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In their quest for American “energy dominance,” as they put it, the first Trump administration wildly slashed energy restrictions and regulations – which we’re sure had lobbyists all over Washington opening plenty of Dom Pérignon. But instead of being the industry’s white knights, what they really did was perpetuate the crisis that the American energy industry was already in. What Donald Trump tried to sell as American “energy dominance” was really nothing more than feverish drilling that led to a massive glut in the global energy markets. Simply put, the breakneck energy production in the United States not only outpaced our own energy needs; it outpaced the entire world’s.

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It is this reality – along with far less access to unrestricted private equity cash, geologic limits, maturing fields, declining wells, power grid constraints, and increasingly difficult wastewater disposal – that brings us to the harsh realities of today. This was true before the pandemic but made far worse because of it. At one point in April 2020, oil prices went negative, which means that traders were actually paying buyers to take their oil.​ Additionally, the rate of production of “tight” wells, or those that must be fracked, declines sharply. When we say sharply, we’re talking like up to 70 percent by the end of the first year. That’s about TEN TIMES the decline rate of conventionally drilled wells.

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Lastly, thanks to the last two issues, most companies that rely on shale gas seldom make a profit (although, naturally, that doesn’t extend to bonuses for the executives). Because of the steep decline curve, shale-focused energy companies are forced to keep chasing the next expensive well… meaning they burn tons and tons of cash.

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Given all of this, you might be asking yourself: So then, how were these companies able to keep fracking for so long? Well, for over a decade, these companies had tons of help keeping the shale charade going, mainly from private equity investments. In fact, the private equity industry invested at least $1.1 trillion (of its $7.4 trillion in assets) into the energy sector between 2010 and 2021. Around 80 percent of these investments involved oil, natural gas and coal.

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But those days are over. During and after the pandemic, money started to dry up quickly as private equity firms, tired of chasing their tails, hightailed it out of the shale game. In July 2020, The Wall Street Journal reported that “holdings of oil-and-gas stocks by active money managers are at a 15-year low.”

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Three years later, that trend was continuing. In the second quarter of 2023, private equity firms EnCap Investments and NGP Energy Capital sold off six energy portfolio companies between them, bringing the total amount of private equity-owned assets sold in the first half of 2023 to $14 billion. There were only ten new E&P firm investments, compared to at least 100 per year over the prior ten years.​ In 2025, private equity firms were still holding firm to their strategic shift from new, high-risk, greenfield drilling to “refracs” (re-fracturing existing wells) and acquiring mature assets sold off by major public companies consolidating their portfolios.

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The bottom line is this: The economics of fracking is risky enough when the market is high, but when prices fall it causes big time trouble. Ultimately, this creates a self-fulfilling prophecy for cash-strapped companies already operating on a shoestring: prices fall, leading to less revenue, leading to a slashing of capital expenditures, leading to stalled production, etc. etc. etc. When you add into the mix inflation, geologic limits, maturing fields, declining wells, and the pressure to shift to renewable sources – which despite what it may look like today, isn’t going away – you have a situation that is not sustainable long-term.

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It’s true that moving from a high-carbon to low-carbon energy system will better protect our environment. But it’s as much about moving to renewable resources before non-renewable ones run out. It’s as much about securing an energy source that is less economically volatile and more diversified both geologically and technologically – two things that will greatly strengthen our national security.