By: Rob Wertheimer
The most startling idea we have uncovered in more than a decade of thinking about machinery is the engine power used in fracking. A fracked well with a long horizontal takes at least 100x the horsepower put in for a barrel flowing out, versus the older wells that provided the energy to build the modern world. It might be 500x. Despite that 100x engine intensity, fracking engine sales collapsed while oil and gas production has risen in the US since 2015. Efficiency gains are the explanation for the sales collapse, and that is a warning across all machinery…one that has already happened in fracking. CAT has upside at the end of this efficiency curve, and could see resumption of growth, either in NA or in global fracking.