A news article on production of oil and natural gas in the Permian Basin of western Texas
Question:
A news article on production of oil and natural gas in the Permian Basin of western Texas and New Mexico noted the following two facts:
i. “Shale drillers in the Permian Basin are producing vast amounts of gas as a byproduct of prospecting for oil.”
ii. “Gas prices in parts of the prolific region hovered near zero last month and some trades went negative, to as low as a negative 25 cents per million British thermal units. . . .”
a. What does it mean for a price to be negative?
b. Why would firms drilling in the Permian Basin continue producing natural gas if they receive a zero or negative price for it?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Question Posted: