[OKC] FW: [ok-sus] As it turns out. . . shale gas may be just another bubble about to pop

[Shauna Struby]

From: ok-sus-bounces at lists.oksustainability.org
[mailto:ok-sus-bounces at lists.oksustainability.org] On Behalf Of Shauna
Struby
Sent: Monday, June 27, 2011 8:23 AM
To: 'Sustainability Issues in Oklahoma'
Subject: Re: [ok-sus] As it turns out. . . shale gas may be just another
bubble about to pop

 

Reminds one of the old adage – if it sounds too good to be true – it
probably is.

 

Richard Heinberg’s discussion of all the various energy sources in Searching
for a Miracle: Net Energy Limits & the Fate of Industrial Society,
http://www.postcarbon.org/report/44377-searching-for-a-miracle ... and Post
Carbon’s more recent report, Will Natural Gas Fuel America in the 21st
Century?,
http://www.postcarbon.org/report/331901-will-natural-gas-fuel-america-in
also provide more insight and detailed background on these issues. 

 

When the Post Carbon Institute released the report on natural gas, it was
downloaded more than 10,000 times within a matter of two weeks.

 

From: ok-sus-bounces at lists.oksustainability.org
[mailto:ok-sus-bounces at lists.oksustainability.org] On Behalf Of Bob Waldrop
Sent: Sunday, June 26, 2011 6:43 AM
To: OSN list serv
Subject: [ok-sus] As it turns out. . . shale gas may be just another bubble
about to pop

 

Shale gas may not be as cheap and easy to extract as some such as Aubrey
McClendon would have us believe.  McClendon’s advocacy itself should be a
red flag of warning.  He is the latest in a very long line of Oklahoma
hucksters and shysters who have made nice livings by playing to the
gullibility and greed of the investing public.  An independent agency that
rates corporate governance recently recommended that Chesapeake investors
remove him from the board due to his excessive compensation. See this week’s
Gazette at
http://www.okgazette.com/oklahoma/article-12107-peake-performance.html for
more details on that.  Note how little coverage that news has received in
the area.

 

But for the cautionary tale, see today’s NY Times. . .
http://www.nytimes.com/2011/06/26/us/26gas.html?nl=todaysheadlines
<http://www.nytimes.com/2011/06/26/us/26gas.html?nl=todaysheadlines&emc=tha2
> &emc=tha2 .  Here's a snip. . . 

 

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. 

 

“Money is pouring in” from investors even though shale gas is “inherently
unprofitable,” an analyst from PNC Wealth Management, an investment company,
wrote to a contractor in a February e-mail. “Reminds you of dot-coms.” 

 

“The word in the world of independents is that the shale plays are just
giant Ponzi schemes and the economics just do not work,” an analyst from IHS
Drilling Data, an energy research company,  wrote in an e-mail on Aug. 28,
2009. 

 

Company data for more than 10,000 wells in three major shale gas formations
raise further questions about the industry’s prospects. There is undoubtedly
a vast amount of gas in the formations. The question remains how affordably
it can be extracted. 

 

The data show that while there are some very active wells, they are often
surrounded by vast zones of less-productive wells that in some cases cost
more to drill and operate than the gas they produce is worth. Also, the
amount of gas produced by many of the successful wells is falling much
faster than initially predicted by energy companies, making it more
difficult for them to turn a profit over the long run. 

 

more at the article. . . 

 

Bob Waldrop, OKC

 

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