You’re Ian Urbina, a senior New York Times reporter. In February and March, you write that hydraulic fracturing, a method of natural gas extraction, is contaminating Pennsylvania drinking water. Your accusations are disproved by government tests.
So you write a three-part series saying that shale gas production is “inherently unprofitable” and a giant Ponzi scheme, as well as loosely regulated by the Securities and Exchange Commission.
No matter that many emails you cite are two years old, that two of your supposedly objective sources are environmental activists, that profit-maximizing companies are investing billions of dollars in shale gas.
Last week, the Times ran Urbina’s three-part series on the bullish outlook for natural-gas production in the United States, questioning whether industry officials and analysts are too optimistic.
The New York Department of Environmental Conservation will soon issue a new report that will decide whether New York state will allow hydrofracturing. Is the Times’ series meant to nudge New York toward a negative decision?
These headlines want to make you call your broker and sell. They read “Insiders Sound an Alarm Amid a Natural Gas Rush,” “Behind Veneer, Doubt on Future of Natural Gas,” and “S.E.C. Shift Leads to Worries of Overestimation of Reserves.”
Yet one source, Art Berman, described as “a Houston-based geologist” who said “the shale gas revolution is being oversold” is a board member of the Association for the Study of Peak Oil and Gas, which promotes “cooperative initiatives in an era of depleting petroleum resources.”
On April 1 at Cornell University, Berman proposed getting rid of private cars and replacing them with public transportation.
America is forecast to produce 24 trillion cubic feet of natural gas this year, 15 percent more than in 2001, and 5 percent more than in 2010. About 25 percent comes from shale, through hydraulic fracturing.
Energy Department estimates of recoverable U.S. natural gas have climbed from 1,100 trillion cubic feet in 1990 to 2,587 trillion cubic feet today. Shale gas production is expected to triple between 2009 and 2035.
Urbina wants to show that this boom is a bubble, like the housing bubble that burst in 2007.
No one can predict the future with certainty. But evidence is against a gas bubble because of strong U.S. and global demand for energy.
University of Wyoming economics professor Timothy Considine told me, “Unlike the mortgage-backed securities bubble, the rising tide of energy consumption in China and India will act as a giant demand pull on all forms of fuel, natural gas, coal, and oil. The more we produce here, the better off we are.”
Companies such as Exxon Mobil and Chesapeake Energy are continuing their investment. Why would they invest billions in a bubble?
Gas demand will remain strong due to the administration’s phase-out of coal, which now produces 45 percent of our electricity. New rules would make it more costly to mine and use coal. Generators and power plants can be adapted to burn natural gas.
Shale gas can be used for electricity and commercial and passenger vehicles. Those who demonize it are demonizing our clean energy independence.
Examiner columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.