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June 30, 2011

Government tests disprove environmentalist's demonizing of shale gas

Topics: Climate Change, Environment, Political News and commentaries

While the Obama administration seeks to reduce the use of coal, is nervous about the use of nuclear power, and says it's worried about American dependence on foreign oil ... it only supports the so-called "green" or clean-energy sources - solar, wind, and biofuels, which only account for just five percent of our electricity production. Meanwhile, environmentalists and their apologists like Ian Urbina, a senior New York Times reporter (and a steering committee member of the Oil and Gas Accountability Project, a group that considers natural gas to be a dirty energy product and that is working to ban hydraulic fracturing), simply makes stuff up to support an anti-shale agenda.

But fortunately, sooner or later, the true facts emerge:

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 subsequently disproved by government tests.

What do you write next?

You write a three-part series in the Times 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 quoting industry managers, geologists, government officials, and market analysts are two years old. No matter that two of your supposedly objective sources are environmental activists. No matter that profit-maximizing companies are investing billions of dollars in shale gas.

Over the weekend and on Monday The New York Times ran a three-part series by Mr. Urbina on the bullish outlook for natural gas production in the United States and questioned whether some industry officials and analysts are too optimistic.

The article's timing is significant. The New York Department of Environmental Conservation will soon issue a new Supplemental Generic Environmental Impact Statement that will decide whether New York State will allow hydrofracturing within its borders in order to tap the Marcellus and Utica Shales.

Pennsylvania produces over 80 billion cubic feet of natural gas a year from the Marcellus Shale, a geologic formation that stretches into New York, giving the state an extra $1.7 billion in economic activity a year and 18,000 jobs.

One wonders whether the Times's three-part series was meant to nudge the Empire State towards a negative decision.

The headlines want to make you call your broker and sell your holdings now. 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."

Sure enough, natural gas stocks did fall on Monday, although they had recovered as this article went to press. But is the outlook as bearish as Mr. Urbina portrays?

America is forecast to produce 24 trillion cubic feet of marketed natural gas this year, 15 percent more than in 2001, and 5 percent more than in 2010. About 25 percent of this gas comes from shale, through a process called hydraulic fracturing.

Government and industry data show that natural gas production has been increasing rapidly and is on a path to continue. America has 200 years of natural gas supplies.

Trillions of cubic feet are available, and have driven the price of natural gas down to its current level of $4.69 per million Btu from $7 or $8 per million Btu between 2004 and 2009.

Read the whole thing.

As Michael Lind pointed out in Salon earlier this month, without massive, permanent government subsidies or equally massive penalty taxes imposed on inexpensive fossil fuels like shale gas, wind power and solar power may never be able to compete. For that reason, some Greens (such as the NYT's Ian Urbina) hope to shut down shale gas and gas hydrate production in advance. In their haste, however, many Greens have hyped studies that turned out to be erroneous.

Related: We Have "Enough Oil to 'Completely Replace' all Imports"

Posted by Richard at June 30, 2011 10:30 AM

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