100 years shale gas myth

Wed, 2013-07-03 06:00Sharon Kelly
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Growing Doubts on the Numbers from Fracking Giant Chesapeake Energy

America is in the midst of the biggest onshore oil and gas rush in recent history, with excitement spreading across the U.S. Oil and gas companies have cashed in on this frenzied excitement by courting huge investment domestically and abroad.

But a growing chorus of independent analysts and law enforcement agencies have their doubts and have questioned whether shale drillers are overhyping their financial prospects and overestimating how much oil or gas they can profitably pull from the ground. Just this week, one of America's biggest agricultural lenders, the Netherlands-based Rabobank, announced that it would no longer lend money to companies that invest in shale gas extraction (nor to farmers worldwide who lease their land to these drillers).

The way that oil and gas companies describe their prospects in their financial statements matters because investors – and not just the uber-wealthy ones but also pension funds, university endowments, average folks with retirement savings or 401(k)s – can lose catastrophically if the information they rely on is faulty.

This matters to taxpayers too, since lawmakers need accurate information when making long-term decisions about the industry subsidies and tax breaks granted to encourage the drilling boom. The shale fracking rush could prove to be an expensive bust for taxpayers if oil and gas wells do not perform as promised.

Concern that companies have been over-exuberant about shale led Wall Street's two top cops, the Securities and Exchange Commission (SEC) and the New York Attorney General to investigate whether oil and gas companies have been “overbooking” their reserves (translation: inflating their appeal by promising investors more fossil fuels than their wells can actually deliver).

One company in particular – Chesapeake Energy – has attracted the most attention from these investigators.

Wed, 2012-11-21 05:00Steve Horn
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Shale Gas Bubble About to Burst: Art Berman, Bill Powers

Food and Water Watch recently demonstrated that the dominant narrative, “100 years” of unconventional oil and gas in the United States, is false. At most, some 50 years of this dirty energy resource may exist beneath our feet.

Bill Powers, editor of Powers Energy Investor, has a new book set for publication in May 2013 titled, “Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth.”

Powers' book will reveal that production rates in all of the shale basins are far lower than the oil and gas industry is claiming and are actually in alarmingly steep decline. In short, the “shale gas bubble” is about to burst.
 
In a recent interview, Powers said the “bubble” will end up looking a lot like the housing bubble that burst in 2008-2009, and that U.S. shale gas will last no longer than ten years. He told The Energy Report:
 
My thesis is that the importance of shale gas has been grossly overstated; the U.S. has nowhere close to a 100-year supply. This myth has been perpetuated by self-interested industry, media and politicians…In the book, I take a very hard look at the facts. And I conclude that the U.S. has between a five- to seven-year supply of shale gas, and not 100 years.
 
The hotly-anticipated book may explain why shale gas industry giants like Chesapeake Energy have behaved more like real estate companies, making more money flipping over land leases than they do producing actual gas. 
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