NYT Articles on Shale Gas Reserves Challenged by Marcellus Experts

More evidence that the recent stories by Ian Urbina in The New York Times were fiction and not fact came from two shale gas experts yesterday:

Speaking July 6 during a news briefing on domestic shale gas production, American Petroleum Institute Chief Economist John Felmy and Penn State University Professor Terry Engelder discredited much of the work from the Times. Felmy said he was "mystified" by the articles, which questioned current reserve estimations and the financial returns of shale drilling, and he said the reality of development tells a much different story.

"These shale gas reserves could well make clean-burning natural gas tomorrow’s energy, and it is no exaggeration to say the United States is poised to be the Saudi Arabia of tomorrow’s energy," Felmy said. "Shale gas production … is poised to make up more than 40% of U.S. production in 2020."

Felmy said the stories appeared to be based on dated sources and information that "disagrees sharply" with the formal modeling done by the Department of Energy and others. "It’s hard for me to believe that [shale gas development] isn’t based on fundamental economics," he said. "If you look what the forecasts from virtually everybody around the country … it affirms that it’s very much a real opportunity that’s economically justified."

In addition to using unidentified sources and unverified statements, the reporting overlooked how thoroughly the oil and gas industry is audited, according to Felmy. "They all have to demonstrate what their reserves are, what their production is, both because of royalties and because of taxes they have to pay for resource extraction and so on," he said. "It’s very hard for me to believe that anything like that could be going on given all the oversight these companies are under."

Engelder, who is serving on Pennsylvania Gov. Tom Corbett’s Marcellus Shale advisory commission, also had trouble accepting the reporting. "The Sunday story was based largely on an interview given by Art Berman. Art is known for casting rain clouds all over the North American gas shale play," Engelder said. "Art’s claim is that these wells have to pay for themselves … in two to three years, at most. The economic models that are being run by the major players in these gas shales, particularly the Marcellus for example, recognize an eight to 10 year payout."*

*SNL Financial (Jul 6, 2011) – Expert: Southern Tier may hold the best Marcellus wells in New York

  • http://pulse.yahoo.com/_T5AQOTQAX3TMF7AVYYRUW3THMY Julieann Wozniak

    Tom Corbett, as we all know, is bought and paid for by industry. And he signed the odious and undemocratic Grover Norquist tax pledge. Propaganda and talking points just ooze from this puppet’s lips!

  • http://marcellusdrilling.com Jim Willis

    I don’t live in PA but I’ll tell you, Corbett’s courageous actions in restoring fiscal sanity to the state make me want to live there! The propaganda comes from the left on the drilling issue because the facts don’t support the allegations.

  • Anonymous

    We could all move back into caves, or exploit more third world countrys for their natural resources. Face the facts all fosil fuels are a dirty business, the hens have come home to roast, and as the worlds largest consumers of fosil fuels we can no longer be NIMBYs.It’s time to pay the fiddler or stop dancing. JIm

  • Anonymous

    the facts are right there in Chesapeakes most recent publicly available financial statements: 

    they lost over $161 million last quarter  . only by drilling new wells can they create the illusion to sucker more $$ into the ponzi economics of unconventional shale gas because production after the first year on each well falls off a cliff, see chart of chesapeakes own production #s:
    CHK ceo admits as much saying:
    “I can assure you that buying leases for X and selling them for 5X or 10X is a lot more profitable than trying to produce gas at $5 or $6 mcf.”http://seekingalpha.com/article/100644-chesapeake-energy-corporation-q3-2008-business-update-call-transcript
    so only if gas prices radically increase do the economics make sense, which with more gas drilling won’t happen, and defeats the whole argument of providing cheap gas for local use. 
    the numbers don’t lie, cold hard facts about the shale gas scam you are shilling for….

  • Anonymous

    Unnoticed by most from July 7: Ethics advocate challenges NYT on its shale gas investigation.http://bit.ly/q4YkZA

  • Pingback: EIA: Marcellus Shale Reserves Underreported | RefineryNews.com()

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