The industry publication Natural Gas Intelligence (NGI) issued a press release yesterday summarizing the mounting opposition to the recent hit pieces published by the New York Times on the shale gas industry. The press release is an effort to get subscribers for NGI’s publications. Hey, MDN appreciates their efforts! However, the quotes in the piece from across the spectrum are an excellent roundup illustrating the truly misguided effort by the NYT to smear the shale gas industry. So MDN is running the NGI press release in full below.
In an article full of great quotes, here is MDN’s favorite: “Professional journalists are wondering why a newspaper industry leader would damage its credibility by substituting advocacy for accuracy, in what can only be described as a travesty of journalistic principles.”
Natural Gas Industry, Analysts Defend Against NYT Attack, NGI Reports
Criticism has mounted from all sides against the New York Times (NYT) for its publication this week of unsubstantiated, tabloid style articles, which attempt to undermine confidence in the soaring production and popularity of natural gas, according to Natural Gas Intelligence (NGI).
The U.S. Energy Department’s Energy Information Agency (EIA) found it necessary to issue a statement Monday refuting charges made in the front page NYT articles Sunday and Monday that EIA’s reserves and production evaluations were seriously flawed. Others in the industry and independent analysts also responded quickly to the Times accusations that the shale gas boom was over-hyped. The NYT articles included selective quotes that likened the industry to a "Ponzi scheme" with no legs and with a future similar to that of Enron and the bursting of the dot.com bubble.
ExxonMobil Corp., not to be confused with a dot.com, commented in its Perspectives blog that "the Times questions the value of our country’s vast shale gas resources with little more than anonymous sourcing, two-year-old e-mails and analysis unsupported by fact. Ironically, author Ian Urbina did not call ExxonMobil, the largest natural gas producer in the United States, for comment.
"The writer did seem to put a lot of weight on the word of a retired geologist who just two years ago wrote that it was ‘difficult to imagine’ that the ‘Haynesville Shale can become commercial.’ Ironically, the Haynesville Shale is now the largest gas producer in the United States…If the writer had bothered to call us, we would have told him that ExxonMobil’s investment approach is disciplined and based on a long-term view of global market conditions…It was this long-term vision that led to the acquisition of XTO and subsequent shale gas ventures…"
CEO Aubrey McClendon of Chesapeake Energy Corp., the nation’s second largest gas producer, noted in a lengthy rebuttal the broad range of companies investing in shale gas.
"Consider whether it could really be possible that all of these well-respected energy leaders, with a combined market cap of almost $2 trillion, know less about the economics of shale gas production than a single New York Times reporter, a few environmental activists and a handful of shale gas doubters?" McClendon asked. "The Times story was obviously motivated by an anti-natural gas agenda."
EIA said its views on shale gas, which were provided in advance to the NYT for an article it was preparing, "differ in significant respects" from those published by the newspaper on Monday, according to Michael Schaal, director of the Office of Petroleum, Natural Gas and Biofuels Analysis within the EIA’s Energy Analysis office.
"One guiding principle that we employ is, ‘look at the data,’" Schaal said in his original response to the Times reporter. "It is clear the data shows that shale gas has become a significant source of domestic natural gas supply. Prior to 2005 shale gas constituted only 4% of natural gas production and had grown to become 23% of production for 2010. EIA’s continued monitoring of the situation indicates that growth in shale gas production continues and that shale gas has exceeded 30% of total marketed natural gas production through May of this year."
Kenneth B. Medlock III of the Baker Institute Energy Forum at Rice University noted that he was selectively quoted in the NYT story, which, based on a presentation he made in May 2010 at the Federal Reserve Bank of Dallas, drew the erroneous conclusion that resources in the original Barnett Shale Basin were in decline.
"During the presentation at the Dallas Federal Reserve Bank, I showed a projection for U.S. shale production by region that indicated production from the Barnett Shale would decline slightly for a period of time as investors temporarily shifted priority to larger and less costly plays in places like the Haynesville and Marcellus shales," said Medlock. "This shift, as I explained, was a matter of economics, not geology, since all of the plays have large resource potential but different production costs and proximity to market." This represents "just a flattening profile for a period of time as investors shift attention to plays that offer better profitability."
The NYT "has it wrong," said Dan Pickering, chief energy strategist of TPH Asset Management, an offshoot of Tudor, Pickering, Holt & Co. Pickering said "a myriad of companies, hundreds of executives and thousands of employees indicate the industry believes in both the short-term and long-term viability of shales. They are speaking with their capital budgets, their bonus pool, their acquisition budgets…not with their keyboards and chat room postings. If there is any conspiracy or hidden agenda, it’s amongst those writing articles, not drilling gas shale."
The NYT’s latest blasts at the natural gas industry are not its first. In February the newspaper ran a rambling series of articles with horror stories of a widening prospect of pollution from hydraulic fracturing for shale gas, stories which had been largely debunked even before the articles were written. Following those stories, some of those quoted said either they had never spoken to a Times reporter or they had been misquoted, and Pennsylvania state regulators said their activities had been miss-reported.
"You really have to wonder why the New York Times is campaigning against cleaner-burning, domestically produced natural gas," ExxonMobil’s Ken Cohen stated in his blog.
And professional journalists are wondering why a newspaper industry leader would damage its credibility by substituting advocacy for accuracy, in what can only be described as a travesty of journalistic principles.
The come-from-behind natural gas industry by virtue of its recent success has many powerful enemies, including the coal and nuclear industries which it is crowding, and renewables like wind and solar power, which it is undercutting with lower prices. Even the oil half of "oil & gas" doesn’t like the idea of natural gas encroaching on its transportation market. So there is no lack of possible backers of the on-going campaign, of which the NYT articles are only a small part, to undermine the industry, inciting citizen NIMBY protests with misinformation about its prospects and drilling practices.
There are serious questions currently being debated by industry, government and citizens as to how the natural gas boom will be managed, how to deal with drilling near population centers, and how to get the best benefit for the nation from this massive domestic resource. Unfortunately, the New York Times contributes nothing of substance to that debate.
To read the Natural Gas Intelligence news reports on this and other natural gas market events real-time go to intelligencepress.com and sign up for a free trial.
Intelligence Press Inc., is an independent publishing company serving the energy industry since 1981 with real-time news and price survey reports for the natural gas market in its publications: Natural Gas Intelligence, Daily Gas Price Index, Weekly Gas Price Index. Its new publication, NGI’s Shale Daily at //shaledaily.com/ is the first daily publication devoted exclusively to the unfolding shale revolution that is rewriting the energy outlook in North America.
*Business Wire/Intelligence Press (Jun 29, 2011) – Natural Gas Industry, Analysts Defend Against NYT Attack, NGI Reports