In an excellent short essay, “What Hath Fracking Wrought,” Randy Udall discusses the environmental and social consequences of the application of hydraulic fracturing technology to the production of oil and natural gas.

“Since year 2000, oil and gas companies have leased a staggering amount of land in the Rockies, Texas, Louisiana, Arkansas, Oklahoma, Pennsylvania, New York, and Ohio. Add it all up, and the industry now holds drilling rights to at least ten percent of the Lower 48, more land than is owned by the U.S. Bureau of Land Management, more land than we will plant in corn, wheat, and soybeans, about ten times as much acreage as we’ve paved, given over to oil and gas for at least 50 years to come. . . . Nearly 50,000 oil and gas wells will be started in the U.S. this year, more than in all other nations combined. Roughly ninety percent of them wouldn’t be spudded unless their target zones could be fracked. Like it or not, and many of my friends seem not to, this technology has become one of the underpinnings of our civilization, as central to it as the cell phone or computer.”

Udall doesn’t mention the high costs incurred in using this technology (costs for fracking fluids themselves, and for trucking them around and disposing of them; as well as for horizontal drilling); nor the low energy return on energy invested in the process; nor the low per-well production rates (for the Bakken shale an average of 86 barrels per day); nor the high decline rates (a new well drilled in the Bakken may lose 80 percent of its production rate by the end of the first year). He only hints at the telling fact that most of the technological elements of the new fracking boom have been around for decades and are being applied now solely because high fuel prices make drilling in low-porosity plays profitable.

In the shale gas industry, a torrent of production has ensued from very high rates of drilling that were in turn set off by record-high natural gas prices just a few years ago. But the supply glut has driven down gas prices to such an extent that none of the companies specializing in fracking is now making money from production; the industry is hanging on by its fingernails, cutting back on drilling, selling off leases, subsisting on investment capital, waiting for prices to recover.

Shale oil producers, in contrast, are still profiting from high oil prices, and in this case higher domestic production is not likely to cause prices to fall (the oil trade is international and so the price is set globally, while natural gas moves mostly by pipeline with only marginal tanker trade and is thus mostly priced nationally or continentally).

What would happen to shale oil producers if global oil prices were to crater, as happened in the last weeks of 2008? That’s by no means unthinkable, as Chris Cook, the former compliance and market supervision director of the International Petroleum Exchange, pointed out in a recent essay. Essentially we would see a re-run of what is happening in the shale gas industry—though we still have to use a little imagination to get the full picture, as the fracking gas bubble is itself only beginning to burst. Let’s assume a crash in world oil prices down to a level of $40-50 a barrel; the cause would be falling demand due to world economic contraction possibly magnified by a “buyer’s strike” in China and a flushing of speculative money from oil derivatives contracts.

First would come the idling of drilling rigs and a pull-back in investment by the industry. A year or two later, production from the Bakken and other shale plays would start to decline—and the rate of decline would accelerate through the third and fourth year. Remaining demand for oil would continue to be profitably met by production from aging conventional oilfields, while producers specializing in fracking would lose their shirts. Leases by the thousands would be sold or simply allowed to expire.

None of this is meant to dispute the point Randy Udall is underscoring—that fracking is dramatically changing not just the oil and gas industry, but land use and air and water quality throughout the U.S. and potentially much of the rest of the world. The debates about our energy future, and about the fate of the planet, have shifted.

One has to wonder, though: is all of this about to shift again as a seemingly unstoppable new extractive technology gets pounded by the very market it serves, its marginal energy and financial profitability rendering it mortally vulnerable to further deflation of the global credit bubble?