Times' Attack on Natural Gas Industry Just Smoke and Hot Air, Industry Analysts Say
The front page of Wednesday's National section of the New York Times featured the suddenly ubiquitous Ian Urbina advancing the paper's agenda against the natural gas industry, as he's been doing all week: 'Lawmakers Seek Inquiry Of Natural Gas Industry.'
Luckily for the Times, it found a few liberal Democrats to keep the story going by calling for an investigation into industry practices.
Tina Korbe at Hot Air has a good roundup of the rebuttals to Urbina's slanted reporting. Korbe summarized Urbina's Sunday piece:
The Gray Lady blew a spectacular bit of smoke with a recent article that suggested shale natural gas production is a shaky investment at best and, at worst, a Ponzi scheme of sorts, destined to devastate those who buy the 'lie' that shale plays will not only produce high profits for companies, but will also provide affordable energy for the country.' Urbina 'implied natural gas companies intentionally or even illegally overstate the productivity of their wells and the size of their reserves.'
Aubrey McClendon, chief executive of Chesapeake Energy Corp., named in the article, published a strong rebuttal to the Times on his company website:
It is also absurd to conclude that shale gas wells are underperforming while America is awash in natural gas and benefiting from natural gas prices less than half of what they averaged in 2008. I also note that Chesapeake and other shale gas producers are routinely beating natural gas production forecasts. In fact, in 2009, thanks to shale gas, the U.S. passed Russia as the largest natural gas producer in the world. Today shale gas production represents approximately 25 percent of total U.S. natural gas production. How can shale gas wells be underperforming if shale gas companies are beating their production forecasts, natural gas prices remain low and U.S. natural gas demand is at a record high? …
Christopher Helman at Forbes found Urbina's accusations of low reserves, false claims, and too-high extraction costs 'absurd on its face. The United States is currently producing more natural gas than at any time in history, on track for 27 trillion cubic feet this year....We would have thought that the Times would be in favor of plentiful, low-cost natural gas. It burns a lot cleaner than coal, and with nuclear off the table for now, gas is poised to fuel U.S. economic growth for more than a generation to come. I can only guess that the problem, as the Times sees it, is that as long as we have all that cheap gas, there's precious little need for solar panels, windmills and other cornerstones of their much-heralded but slow evolving green jobs revolution."
Barely daunted, Urbina followed up on Wednesday with the news that a few liberal Democrats had called for an investigation, while glancing fleetingly over the massive criticism to his Sunday article.
'Given the rapid growth of the shale gas industry and its growing importance for our country's energy portfolio, I urge the S.E.C. to quickly investigate whether investors have been intentionally misled,' wrote Representative Maurice D. Hinchey, Democrat of New York, in one of three letters sent to the commission by four federal lawmakers, all Democrats.
The calls for investigations came amid growing questions about the environmental and financial risks surrounding natural gas drilling and especially a technique known as hydraulic fracturing, or hydrofracking, used to release gas trapped underground in shale formations.
The calls for investigations follow articles in The New York Times describing doubts reflected in internal e-mails from federal regulators and natural gas industry officials about the costs associated with shale gas and the reliability of company reserves estimates.
Oil and gas companies and energy market analysts strongly rejected the views expressed in the industry and federal e-mails published by The Times.
In an open letter to his employees, the chief executive of Chesapeake Energy, Aubrey McClendon, said the company's prospects were bright.
'There is no reason to believe that shale gas wells will have shorter lives than our conventional wells - some 8,000 of which are 30 years old or older,' Mr. McClendon wrote.
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