One of the world's great investment thinkers is convinced fracking is causing earthquakes

quartz ^ | February 7, 2014 | John McDuling

[ckilmer]

One of the world’s great investment thinkers is convinced fracking is causing earthquakes

By John McDuling @jmcduling February 7, 2014

“To me at least the connection is clear and statistically certain… far more certain than anything I ever see in the stock market or the economy.”

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That’s Jeremy Grantham, the highly-regarded co-founder of the $117 billion investment fund GMO, who predicted both the dot com crash of the late 1990s and the subprime meltdown a few years later. Above is an accompanying chart included in his latest investment letter.

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Rather than pushing an investment idea here, he’s convinced there’s a causal link between a surge in earthquakes measuring above 3 on the richter scale in the US and the boom in hydraulic fracturing (“fracking”), the controversial drilling technique used to extract oil and gas from shale rock.

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His overall skepticism about fracking informs Grantham’s broader, bearish thesis about oil prices. In the investment letter he questions whether “this year’s $650 billion spent looking for new oil will ever get a decent return.”  He argues that slowing global economic growth, more fuel efficient vehicles, hybrids and electric cars mean that “it is certain that oil demand from developed countries will decline, probably faster than expected.”

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A few more choice words from Grantham: “The idea of ‘peak oil demand’ as opposed to peak oil supply has gone, in my opinion, from being a joke to an idea worth beginning to think about in a single year. Some changes seem to be always around the corner and then at long last they move faster than you expected and you are caught flat-footed

[TaxPayer2000]

Of course he is........

[dfwgator]

Maybe it is causing earthquakes, but they are mostly small earthquakes, which actually relieve pressure that otherwise would have built up and ultimately generated, “The Big One.”

[TruthShallSetYouFree]

Next, we need an analysis of the stock market by a noted seismologist.

[Doctor 2Brains]

My god!!!

[Pearls Before Swine]

Grantham’s a great investment manager, but he’s on shaky ground here. /S

[MadMax, the Grinning Reaper]

I think Grantham is “fracked” in the head.

Fracking only goes a few miles deep into the earth’s upper crust.

Earthquakes, even shallow ones, start many miles lower, usually in the 40-60 mile range to several hundred miles below the surface.

He might know about money but he doesn’t know crap about the earth and rocks. I wonder if he is “stoned”.

[Ouchthatonehurt]

Touché

[elkfersupper]

Hucksters are and always will be hucksters.

The more things change, the more they remain the same.

[saganite]

The comment about peak oil demand is interesting though. That falls within his area of expertise.

[grania]

re: maybe it's causing earthquakes, but relieving pressure that would've built up and generated "the big one"

Question....do those small earthquakes have the potential to cause pollution of underground water sources? I really don't know anything about this. It's just that it's the unintended consequences of things that are always the most "fun".

[dfwgator]

Translation: “I’ve got a lot of stocks tied up in oil companies.”

[Zeneta]

A few more choice words from Grantham: “The idea of ‘peak oil demand’ as opposed to peak oil supply has gone, in my opinion, from being a joke to an idea worth beginning to think about in a single year. Some changes seem to be always around the corner and then at long last they move faster than you expected and you are caught flat-footed

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Grantham sells fear.

[Clean_Sweep]

So fraking in Pennsylvania is causing earthquakes where, in Pacific Ocean near Japan?

[Ghost of SVR4]

*golf clap*

Well played, well played.

[tophat9000]

Well I will give there could be some logic here..fracking is just that fracturing the rock and expanding existing rock fractures and earthquake are rock fault (fractures) slipping. ..the up side is you may get more small quakes because your slowly reliving the strain over time instead of one big one explosive release of the strain in a big quake

[editor-surveyor]

Investment is related to geophysics in exactly what way?
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[SampleMan]

More precisely, they are not causing earthquakes, they are triggering them, by releasing the built up pressure. So you get a few dozen 3s instead of one 4.

[TaxPayer2000]

Hard to trust a graph which starts off at 0 earthquakes in 1973..... As if earthquakes never occurred in that area prior to 1973

Would like to see a graph going back at least 100 years, or more.

[snoopy 'n linus]

I had dinner four weeks ago with the government’s lead expert on this injection and my experience dates back over two decades that basically the method is quite safe.

That being said, the name Evans immediatey came to mind. Suggest study for everyone to consider and learn something: http://geosurvey.state.co.us/hazards/Earthquakes/Documents/ERC/THE%20DENVER%20EARTHQUAKES-HEALY%20AND%20OTHERS%201968.pdf