Frackophobia at the New York Times

Ian Urbina who writes for the New York Times published an expose over the weekend that purported to provide evidence that the natural gas industry was being less than honest in its assessments of natural gas reserves that are to be found with in various shale gas plays across the country and indeed the world. He also happens to be the author of the February 2011, NYT hit piece that claimed fracking fluid  being returned from the depths of the Marcellus shale was polluted with high levels of radionuclides that were being deposited into our rivers and waterways and thus polluting the very water we drink.

This line of reasoning took very little time to dispel as John Hanger performed a community service in his seven part take down of Urbina’s claims. I have linked this NYT article before and won’t here, but would recommend that you search the February 2011 archives at Mr. Hanger’s blog Facts of the Day if you are interested in his specific arguments. Or course you could also do a quick google search and find that the Pennsylvania Department of Protection researched this claim and found that  seven Pennsylvania rivers studied results showed “normal” or below-average levels of radiation.

“Here are the facts,” said acting DEP Secretary Michael Krancer in a statement. “All samples were at or below background levels of radioactivity; and all samples showed levels below the federal drinking water standard for Radium 226 and 228.”

The Pa DEP press release can be found here.

So it will come as a surprise to no one that I take the latest salvo from Mr. Urbino with more than a grain of salt. He has already proven himself to be a vocal frackophobe whose information and it’s supporting facts are less than up to par.

I originally thought I would provide a detailed point by point fisking of the NYT article, but that has already been done by many. I do have some thoughts that I will share, but would like to point out some of the finer points of contention that have been raised by others.

First the article at hand, Insiders Sound an Alarm Amid a Natural Gas Rush. In the article Ian Urbina and Robbie Brown dig into some industry emails that allegedly cast a pall on the natural gas industry and the “rush” to expand it’s influence before the whole thing falls in on itself. The second, Behind Veneer, Doubt on Future of Natural Gas, seeks to find the most cherry picked emails to support a preconceived agenda. Both are really must reads for those remotely interested in natural gas as it highlights the extent those suffering from “frackophobia” will go to sully the industry.

My first thought was that the whole thing was nonsense. I mean, the Energy Information Administration estimated that technically recoverable shale gas resources jumped 134 percent in one year.

In the Annual Energy Outlook 2010, technically recoverable shale gas resources were estimated to be 368 trillion cubic feet. In the Annual Energy Outlook 2011, the estimate shot up to 862 trillion cubic feet. The increase in shale gas brings total U.S. recoverable natural gas resources to 2,629 trillion cubic feet. This is a welcome change because as little as 10 years ago, analysts and politicians said that the United States could not drill its way out of a natural gas shortage. [i]But, with new technology and investment, we did just that.

The huge increase in shale gas technically recoverable resources is due to the extraction technique: hydraulic fracturing in conjunction with horizontal drilling that allows the capture of much more natural gas than using conventional drilling techniques. With hydraulic fracturing, water, sand and gels are injected into the well to break up the shale rock. And then, horizontal drilling is used to capture the gas from the fractured shale rock. Shale gas resources are found in many areas in the lower 48 states, but the largest formations being drilled today are the Barnett in Texas; the Marcellus that extends from southern New York, across Pennsylvania, and into western Maryland, West Virginia, and eastern Ohio; the Fayetteville in Arkansas; and the Haynesville in Louisiana.

This account is buoyed by a recent AP report by Michael Rubinkam that highlighted the potential of the Marcellus shale:

Two unexpected gushers in northeastern Pennsylvania are helping to illustrate the enormous potential of the Marcellus Shale natural gas field.

The technology has unleashed a drilling frenzy in Pennsylvania — where more than 3,300 Marcellus wells have been sunk the past few years — and accounts for a twelvefold increase in U.S. shale gas production since 2000. Gas harvested from the Marcellus and other shale fields around the country — including the Barnett Shale in Texas and the Haynesville Shale in Louisiana — now represents a quarter of total U.S. natural gas production.

The NYT articles in question are based primarily on a pile of emails, first from industry sources and the second from EIA staff. I haven’t read through all of the hundreds of pages of documents that the Times posted on its site. But I’ve gone through a fair number of them to get a feel for how Urbina used them for his stories. Urbina was clearly looking for negative views of shale gas and had no problem finding them. Given the massive size of the industry, and the number of financial bets being placed upon the sector, that shouldn’t be a surprise. What should be a surprise is that the author hasn’t done much to put them into context.

So without further ado, here is the case against the NYT and Ian Urbina.

Lets start  with the Council on Foreign Relations. Michael Levi offers three serious problems with the NYT articles.

Next Nick Grealy offers a serious rebuttal in a series of articles at his blog No Hot Air. Of particular interest to me is the reference to the International Monetary Fund and their perspective on the shale gas play’s taking place:

We show that US natural gas prices have decoupled from oil prices following substantial institutional and technological changes. We then examine how this interrelationship has evolved in Europe using data for Algeria, one of Europe’s key gas suppliers. Taking into account total gas exports and cyclical conditions in partner countries, we find that gas prices remain linked to oil prices, though the nexus has loosened. Both high oil prices and a modest industrial recovery in partner countries have kept gas exports at low levels in recent years, suggesting changing market forces. The paper then shows how such shifts can have important macroeconomic implications for a big gas exporter such as Algeria

Otsego ProActive Network share their thoughts, as does Forbes!

Energy In Depth, an industry proponent, highlights what could be considered the smoking gun of the Times attempt to poison the debate entirely. To set up the argument lets start with some background from the Sunday expose:

“I think we have a big problem.”

Deborah Rogers, a member of the advisory committee of the Federal Reserve Bank of Dallas, recalled saying that in a May 2010 conversation with a senior economist at the Reserve, Mine K. Yucel. “We need to take a close look at this right away,” she added.

A former stockbroker with Merrill Lynch, Ms. Rogers said she started studying well data from shale companies in October 2009 after attending a speech by the chief executive of Chesapeake, Aubrey K. McClendon. The math was not adding up, Ms. Rogers said. Her research showed that wells were petering out faster than expected.

A member of the advisory committee of the Federal Reserve Bank of Dallas. Pretty impressive stuff. That is until you look a little deeper.

Tell your readers that Deborah Rogers does work for the Federal Reserve Bank of Dallas, but don’t mention that she also works for environmental groups that seek to ban hydraulic fracturing — even though most folks might think that’s relevant here.

  • Urbina quotes Deborah Rogers several times in his story (and even includes her picture), describing her as “a member of the advisory committee of the Federal Reserve Bank of Dallas.” What Urbina fails to mention is that Ms. Rogers is also an active “steering committee member” of the Oil and Gas Accountability Project (OGAP), an activist group that considers natural gas to be a “filthy energy” source, and has actively worked in New York and Pennsylvania to institute bans on hydraulic fracturing.
  • Last year, Ms. Rogers was a featured speaker at OGAP’s “People’s Oil and Gas Summit” in Pittsburgh, even directing her own anti-shale group in Texas to pitch in as a sponsor for the event. In advocating for her position, Ms. Rogers rarely mentions her involvement with the Federal Reserve Bank – but often mentions her work as an artisanal cheese maker and goat farmer in Fort Worth.
  • Urbina reports that Ms. Rogers “started studying well data from shale companies in October 2009 after attending a speech by the chief executive of Chesapeake.” In fact, Rogers was tied in with OGAPlong before she attended that event, working with OGAP contractor and supporter Alisa Rich to prepare a paper in May 2009 that sought to blame air quality impacts on natural gas development.
  • According to an independent report commissioned by the city of Fort Worth, the Rich paper is “based on very limited data” and “too general and limited” to arrive at the conclusions that it did. Speaking about the Rich paper, the authors wrote: “Reasonably possible sources for contamination, other than gas well operations, appear to have been ignored.”

Now that doesn’t seem nearly as objective.

Lastly, most of the emails were from 2009. In hydrofracking parlance, that is an eternity.

The third problem is that many of the emails come from 2008 and 2009, when shale gas was still a much murkier industry. Lots of the technical debates that are played out in those emails have come a long way since. In particular, the steep initial decline rates for shale gas well were indeed surprising to many at the time. But they are not today – steep initial declines are standard in industry and analyst understanding of shale gas economics. The Times story implies that it’s got news on how these wells operate, that that this news might force a revision of analysts’ assessments. But what it presents isn’t news in 2011, and hence the impact on assessments of shale gas ought not be nearly as significant as one might superficially expect.

So there you have it. The only one who believes the rhetoric expounded in the article is the author, the NYT publisher, and the frackophobes who will use this as yet another excuse to beat shale gas proponents about the head with more nonsense!

I have more, but it is getting late. Too be continued!