The unusually warm and dry weather across more than half of the United States has resulted in one of the worst droughts in U.S. history. Much has been made about how the crisis will affect crops and cattle, but it could also alter oil production and prices.
With nearly 64% of the contiguous United States in a drought, the highest percentage since the U.S. Drought Monitor began recording such data in 2000, the economic repercussions are searing.
To date, 2012 has already surpassed 2011's $12 billion in drought losses, and this year is on pace to rival the droughts of 1980 and 1988, which endured losses worth a current value of $56 billion and $78 billion, respectively.
According to 70 years' worth of data studied by the National Center for Atmospheric Research, weather (from heat waves to cold spells to droughts) can cause up to a 1.7% rise or fall each year in the U.S. economy's gross domestic product.
Farmers and agricultural companies have been voicing concerns, now oil and gas companies are speaking up.
With farmers trying to hold on to every ounce of water they find, oil companies don't know how they will get the water needed to drill into their oil fields.
"Water is the key to unlocking oil and gas. We take it for granted," in the U.S., said Chris Faulkner, president and chief executive officer of Breitling Oil & Gas, which has numerous operations in several of the new shale regions.
U.S. drought
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Oil Prices: U.S. Drought Hurting More than Crops
Rising U.S. Food Prices are About to Eat Away at Your Savings
As U.S. households prepare for Recession 2013 , they'll have trouble saving as one constant expense is starting to take a sharp climb: food prices.
Higher U.S. food prices are the last thing the country needs as 2013 is set to bring with it a painful bunch of tax increases and the ominous fiscal cliff, but U.S. consumers need to understand that their grocery bills are about take a much bigger chunk out of their wallets.
You see, the United States is in its worst drought since the Dust Bowl. Farmers for months have been grappling with the effects, which are trickling down to your local store shelves.
"In 2013 as a result of this drought we are looking at above-normal food price inflation," U.S. Department of Agriculture (USDA) economist Richard Volpe told the Associated Press. "Consumers are certainly going to feel it."
Higher U.S. food prices are the last thing the country needs as 2013 is set to bring with it a painful bunch of tax increases and the ominous fiscal cliff, but U.S. consumers need to understand that their grocery bills are about take a much bigger chunk out of their wallets.
You see, the United States is in its worst drought since the Dust Bowl. Farmers for months have been grappling with the effects, which are trickling down to your local store shelves.
"In 2013 as a result of this drought we are looking at above-normal food price inflation," U.S. Department of Agriculture (USDA) economist Richard Volpe told the Associated Press. "Consumers are certainly going to feel it."
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