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The oil and gas boom in the United States was made possible by the extensive credit afforded to drillers. Not only has financing come from company shareholders and traditional banks, but hundreds of billions of dollars have also come from junk-bond investors looking for high returns.

Junk-bond debt in energy has reached $210 billion, which is聽about 16 percent of the $1.3 trillion junk-bond market. That is a dramatic rise from just 4 percent that energy debt represented 10 years ago.

As is the nature of the junk-bond market, lots of money flowed to companies with much riskier drilling prospects than, say, the oil majors. Maybe drillers were venturing into an uncertain shale play; maybe they didn鈥檛 have a lot of cash on hand or were a small startup. Whatever the case may be, there is a reason that they couldn鈥檛 offer 鈥渋nvestment grade鈥� bonds. In order to tap the bond market, these companies had to pay a hefty interest rate. (Related:聽What Low Oil Prices Mean For The U.S. Economy)

For investors, this offers the opportunity for high yield, which is why hundreds of billions of dollars helped finance companies in disparate parts of the country looking to drill in shale. When oil prices were high and production was relentlessly climbing, energy related junk bonds looked highly profitable.

But junk bonds pay high yields because they are high risk, and with oil prices dipping below $70 per barrel, companies that offered junk bonds聽may not have the revenue聽to pay back bond holders, potentially leading to steep losses in the coming weeks and months.

The situation will compound itself if oil prices stay low. The junk bond market may begin to shun risky drilling companies, cutting off access to capital. Without the ability to finance drilling, smaller or more indebted oil companies may not have a future. The Wall Street Journal聽profiled聽a few fund managers who are beginning to steer clear of smaller oil companies. Moody鈥檚 Investors Service聽downgraded聽the oil and gas sector on November 25 to a 鈥渘egative鈥� outlook because of falling oil prices.

If oil prices stay at $65 per barrel for three years, 40 percent of all energy junk bonds could be looking at default, according to a recent JP Morgan聽estimate. While that is a long-term and uncertain scenario, the pain is being felt today. The聽FT reported聽that a third of energy debt issued in the junk-bond market is currently in 鈥渄istressed鈥� territory.

That begs the question; could a shakeout of the oil industry spark a broader financial crisis? Banks and other financial institutions could be overly exposed to energy debt.聽The Telegraph聽paints a dire scenario in which the debt bubble bursts because of low oil prices, leading to a cascading 2008-style financial collapse, at least in the junk bond market.

Such a scenario may be a bit overblown. Persistently low interest rates聽keep demand for junk bonds high, meaning oil companies will probably be able to restructure their debt and continue to access capital. Also, drillers will not immediately face an existential crisis because many have聽hedged themselves, locking in prices for a certain amount of production. (Related:聽The 2014 Oil Price Crash Explained)

But a junk bond crisis could become more likely if oil prices stay low for an extended period of time. Once a few companies begin to default, the problem could quickly spread. Another variable is how quickly the U.S. Federal Reserve will raise interest rates, which could significantly affect the attractiveness of the junk bond market.

Local and regional banks could be highly exposed as well, especially if energy loans make up a large share of their lending portfolio. The Wall Street Journal聽pointed out聽that banks like Oklahoma-based BOK Financial 鈥� with 19 percent of its loan portfolio made up of energy loans 鈥� could be the most vulnerable. Moreover, an economic downturn in regions that depend heavily on energy, such as Texas or North Dakota, could see a broader decline in demand for loans of all kinds. That could add to the pain for local banks.

Low oil prices are not just a problem for oil companies. Investment funds, hungry for yield in a low interest rate environment, have poured money into oil and gas. To be sure, we are far from a crisis at this point, but if oil prices don鈥檛 rebound, a lot of people are going to lose a lot of money.

More Top Reads From Oilprice.com:

• The Oil Glut And An Inevtiable Oil Price Rebound

• State Budgets Reeling from Low Oil Prices

• Which Oil Producing Region Loses the Most From Low Prices?

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