In recent months, it appears that top national media outlets have started to cast a more skeptical eye at how “abundant” shale gas really is.
The New York Times led the charge last year by analyzing “hundreds of industry e-mails and internal documents.” The Times concluded that shale gas has inherent risks, the geology varies, and that data is sparse. According to their report:
In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.
Despite attacks from the gas front group, Energy In Depth (EID), other outlets are beginning to confirm The New York Times original reporting. It’s far from clear that shale gas is magically “abundant.” Yesterday, Bloomberg reported similar conclusions in an article entitled, “Shale Bubble Inflates on Near-Record Prices”:
- “Surging prices for oil and natural- gas shales…are raising concern of a bubble as valuations of drilling acreage approach the peak set before the collapse of Lehman Brothers.”
- The “quirky nature of shale geology means the risks are high that an investment made in a sparsely drilled prospect will go bust.”
- “[O]verseas investors are paying top dollar for fields where too few wells have been drilled to assess potential production.”
- Hunt “has only drilled ‘a handful’ of wells in its Eagle Ford shale acreage, which means it doesn’t yet know how extensive or rich those holdings are.” The same problem exists in other shale formations around the country.
DeSmogBlog conducted a deeper comparison of the two reports showcasing the similarities between The New York Times and Bloomberg reports. It is clear now that EID lead mislead the public with unnecessary attacks on the Times’ Drilling Down series.
And, a new Reuters story quotes “public health professionals and advocates” arguing that the “public health effects of shale gas development need to be rigorously studied as production rapidly spreads in the United States.”
Here’s why this is important: Without looking at the costs of contamination of public water supplies – as one industry study skipped altogether – it’s impossible to meaningfully evaluate the costs and benefits of shale gas. In other words, why talk about “abundance” without talking about cost?