Tag Archives: Fracking

Fracking at the Becker-Posner blog

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Lynne Kiesling

Fracking and energy self-sufficiency is the topic of the week at the Becker-Posner blog. Becker’s contribution provides a stream-of-consciousness overview that is consistent with the past fracking discussions here; it touches on fuel source competition, the quest for self-sufficiency, the environmental impact of fracking, and the likely effects of fuel export regulation. I’m disturbed by seeing the spectre of fuel export regulations rise again, and Becker correctly points out that at least in oil, as long as the world price is higher than the US domestic price, export regulations will have no impact. And with natural gas inventories so high that natural gas prices are falling toward zero, why harm US natural gas companies by restricting their ability to export to countries with higher prices when we have a surfeit?

Becker’s ultimate focus is how fracking contributes to energy self-sufficiency in the US: “Fracking has made the US self-sufficient in gas, and it is leading to reduced imports of oil. If this progress continues, before too long US consumption of oil as well as natural gas would not be drastically affected even by an entire breakdown of imports from the Middle East.” This conclusion depends on there being a reasonably high elasticity of substitution between oil and natural gas, but natural gas is not perfectly substitutable for oil in all instances. Take, for example, electricity generation. According to the EIA’s Electric Power Annual for 2010, there are 55,647MW of generation capacity using petroleum for fuel, and 40.2 percent of that capacity is switchable with natural gas (Table 1.8). Total nameplate generation capacity in 2010 was 1,138,638MW (Table 1.2), which means that only 4.89% of generation capacity uses petroleum fuel, and thus that 1.96% of total nameplate capacity is switchable to natural gas. Electricity is not where the oil-natural gas substitutability is. Coal-natural gas is a different story, but neither Becker nor Posner touch on that analysis, which is less relevant to their main question of energy self-sufficiency.

Waterless fracking?

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Lynne Kiesling

Pale Rider is one of my favorite Clint Eastwood movies. One of its central themes revolves around classic property rights concepts in a community of miners that includes a number of small pan miners and a family that has built a larger, hydraulic mining operation that essentially uses pressurized water to blast rock hillsides apart and release the valuable gold therein. This hydraulic mining harms the mining potential of the downstream pan miners, reducing the value of their property. It’s a vivid example of property rights and Coase’s point about the reciprocal nature of costs when the actions of community members are interdependent. Of course, as director Eastwood heightened the dramatic conflict by making the hydraulic mining family greedy and mendacious, but that’s not necessary for there to be an underlying property rights conflict.

Pale Rider came to my mind yesterday afternoon, when I happened on an interview with Daniel Yergin on Fox Business. The interviewer asked him about fracking as a “new” technology and the US prospects for energy independence (oh, how I wish people would just get over that), and he pointed out that fracking is being used both for natural gas and for “tight oil” (which all KP readers know thanks to Mike, but I think a lot of people don’t). But Yergin also corrected her assertion that fracking is a new technology, mentioning very briefly that this technique in one form or another has existed for a long time. Fracking as we know it has been around for decades, but almost as soon as Evangelista Torricelli discovered atmospheric pressure and the vacuum in 1643, people started exploring using pressurized fluids to do work that they and their animals could not. In the 19th century that included hydraulic mining to get at subsurface mineral deposits.

Yergin’s remark triggered my Pale Rider memory, and the economic parallels between the issues in using hydraulic mining in Pale Rider and hydraulic fracturing today are strong — conflicts over the use of resources with ill-defined property rights, environmental impact, changes in potential profitability of using resources in different ways, etc. In particular, conflicts arise about the quantity of water used and water quality post-fracking. Again, thanks to Mike I think we understand those issues well.

I’ve been wondering about the next step in the chain of Coasian logic: if property rights and legal liability are defined so that energy companies are liable for harms they create (water scarcity or contamination), does that induce harm-reducing innovation? In the abstract, theory suggests that such innovations would fall into the two categories, waterless fracking and water remediation and purification.

And it is happening, although in its infancy and still more expensive than using water. Consider this Forbes article from Erica Gies about innovations in waterless fracking. The relative value of such innovations is going to be highest in places like Texas, as she observes:

Water shortages and conflicts are on the rise due to increasing population and climate change–caused fluctuations in precipitation that are making drought more frequent and severe in some places.

One of those places is Texas, where this summer’s mega-drought invoked comparisons with the 1930s Dust Bowl, as ranchers sold their emaciated animals for a song and agricultural losses soared to more than $5 billion.

As a result, gas industry projects in Texas had to scale back, as energy producers scrambled to find sufficient water.

She then points to a couple of different approaches being developed — liquified (again note the role of atmospheric pressure!) propane gel injected instead of water and which may be reusable, and a vapor “foam” that may reduce water use by 95 percent. I think her conclusion accurately captures the tradeoffs involved, and the role that innovation can play in reducing harms from fracking:

These technologies are in their infancy, and many questions about efficacy, impacts, and cost remain to be answered before they could move into widespread use. And of course, reducing water consumption does not mitigate concerns about prolonging our reliance on fossil fuels or the inherently ugly nature of extractive industry, especially for local neighbors.

But for the gas companies, although such technologies are currently more expensive than water, they offer the promise of reducing myriad headaches and expenses, including costs for hauling water and sand, repairing roads damaged by heavy truck use, and managing water pollution, including “produced” water disposal.

Gies wrote earlier in the year about innovations in water cleaning and business opportunities for wastewater treatment companies, providing concise background on the use of water in fracking. I also read an article last week (that I can’t locate now) about the potential to use technologies developed for oil spill cleanup to clean fracking water. Innovation changes some of the tradeoffs involved in fracking.

Energy industry continues to reshape itself to fit the new world of oil and gas resources

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Michael Giberson

Two multi-billion dollar deals in the news this weekend provide additional evidence of how advances in drilling technology have unlocked vast new energy resources and are reshaping the energy industry. Norwegian oil company Statoil is paying about $4.4 billion for Brigham Exploration, getting “a stronger foothold in unconventional resources” according to the Wall Street Journal. The Brigham deal will gain Statoil a significant footprint in the Williston Basin, a so-called “tight oil” formation that includes the wildly productive Bakken Formation in North Dakota and Montana. Statoil had previously invested in the Eagle Ford Shale in Texas, another unconventional oil and gas resource that has been a source of new reserves.

WSJ graphic shows the pipeline footprints of Kinder Morgan and El Paso Corp.

WSJ graphic shows the pipeline footprints of Kinder Morgan and El Paso Corp.

Separately, pipeline company Kinder Morgan has offered to buy El Paso Corporation for $21.1 billion (and assuming 17 million in debt, raising the cost of the deal to $38 billion). The WSJ says Kinder Morgan is “making a big bet that natural gas blasted from shale rocks around the country will become a huge force in America’s energy future.”

Brett Clanton and Purva Patel offer a similar assessment in the Houston Chronicle:

Kinder Morgan on Sunday made a huge bet in the future of natural gas, with word it will buy El Paso Corp. for $21.1 billion in a deal that will make it the largest operator of natural gas pipelines in the country, as well as the fourth-largest energy company in North America.

The cash-and-stock deal combines two of Houston’s biggest companies into a single industry titan, with …  access to virtually every natural gas field and consuming market in the country.

It comes as pipeline companies are repositioning themselves amid a recent surge in U.S. natural gas and crude oil production from shales and other so-called unconventional formations from Texas to North Dakota, and it finds another major energy company signaling its belief that the trend is more than hype.

At $21.1 billion, that’s a mighty expensive signal.

Admittedly, there is a lot of hype. Some people believe the large resource and reserve additions are almost all hype. Others – and I put myself in this category – believe there is a lot of new very real access to and production from reserves that could not have been legitimately booked as resources five or ten years ago. The trend is more than hype.

Cleantech opportunity: clean water for fracking

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Lynne Kiesling

One of the most beautiful aspects of market processes is how individuals create and take advantage of new profit and growth opportunities by creating value for others. Here’s a case in point that will resonate with many of you, given the outstanding diligence and insight of Mike’s fracking analyses here: clean water for fracking is a hot cleantech opportunity:

In an interview this week with VantagePoint Capital Partner and Founder Alan Salzman, he told me that he sees technology that can help solve the clean water issue for fracking as an upcoming hot area for investment. “We think the limiting factor for gas fracking is water. We’re not gas people, and we’re not oil people. But we are water people,” said Salzman. He declined to name any specific company the fund is backing or looking at.

But if you read the article carefully, you’ll notice a fact that mitigates against my pro-market-process comment above:

The company [ABSMaterials], which was founded in 2009, has several pilot projects in the works and is funded by the Department of Energy’s Small Business Innovation Research Program. The company’s glass expanding, absorbing product is called Osorb.

Conglomerate GE is also working on more environmental methods of recovering and reusing water from natural gas fracking and is working with the DOE on research, too.

If fracking really is here to stay and growing, as Mike has discussed extensively, are these research subsidies necessary to induce innovation in water cleaning technologies? If so, on what basis? Is there a Coase problem here — does legal precedent fail to define legal liability sufficiently to clarify the profits attached to the water cleaning? Or, if that’s not the case, is the water cleaning insufficiently valuable to be worth doing? That hypothesis is consistent with the argument that fracking does not actually create a lot of water supply damage. But if that’s the case, then why subsidize the research — isn’t that a waste of taxpayer funding on research that isn’t likely to be valuable enough to be worth pursuing?

My arm’s-length, casual empricism about water and fracking is that the water issue is more about water use in fracking than about groundwater contamination, rather like ethanol manufacturing. But I’m curious about whether or not such “how cool is this?” innovation is arising from a desire to profit by creating value for others, subsidies because of a lack of well-defined property rights and legal liability, or subsidies because of crony corporatism in energy. In this area, all three are possible, although I’d assign more probability to the latter two rather than the virtuous profit motive.

Devon Energy’s bet on Barnett Shale, made 10 years ago, has paid off

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Michael Giberson

Yesterday, August 14, 2011, was the ten-year anniversary of the announcement by Oklahoma City-based Devon Energy of its intention to acquire Houston-based Mitchell Energy and Development for $3.5 billion. The prime target of interest lay about halfway between the two company headquarters, in the Barnett Shale surrounding Fort Worth, Texas. Mitchell had figured out how to use hydraulic fracturing to produce gas from shale formations, and was beginning to add horizontal drilling to its mix.

As Jack Smith explains in the Fort Worth Star-Telegram‘s Barnett Shale blog:

At the time, it had drilled about 400 wells in the Barnett, and executives saw the potential for 1,200.

But over the decade, Devon would advance the ball significantly with improved horizontal drilling and an expansion of drilling far beyond areas north of Fort Worth where Mitchell Energy had focused. The result would be a drilling boom that by 2008 would draw numerous rivals into the field and make the Barnett the biggest gas-producing area in the U.S. Tarrant and Johnson counties would emerge as the top two gas-producing counties in Texas.

Contrary to reports by some people that shale gas production is economically doomed, Devon says things are looking up:

In the Barnett, “our drilling costs are down, our production is up and our efficiencies are increasing,” said Brad Foster, senior vice president of Devon’s Central Division, which includes Barnett operations.

Devon has achieved, or is on the verge of, several Barnett milestones:

It posted record production in this year’s second quarter, averaging the equivalent of 1.28 billion cubic feet of gas per day, even while keeping only 12 drilling rigs busy. That’s less than a third as many as it ran in 2008, before gas prices cratered.

Devon’s total Barnett production since the Mitchell acquisition is expected to hit the equivalent of 3 trillion cubic feet by year’s end, spokesman Chip Minty said. It’s at 2.8 trillion now.

Despite weak gas prices, now about $4 per 1,000 cubic feet, Devon is realizing solid returns from the Barnett because “our ability to drill wells economically just gets better every year,” said Chairman Larry Nichols, who was CEO during the Mitchell acquisition.

The story continues with some details that help make sense of various claims made by the industry. On the one hand the industry claims that hydraulic fracturing is an old, frequently-used technology that has been time-tested and proved safe. On the other hand, companies assert they are rapidly improving methods to cut cost and need trade secret protections for their hydraulic fracturing fluids.

The truth is hydraulic fracturing has been around for a long time, but its combination with horizontal drilling techniques and application in development of oil and gas from shale is much more recent. As the immense economic potential of shale-based production has become clear, many companies have sought out ways to do the job better.

More from Smith:

When Devon began drilling in the Barnett in 2002, it took three to six weeks to drill a single horizontal well, said David Fortenberry, Devon vice president of technology.

“The rigs we used were really too small and underpowered for horizontal wells,” he said.

Now, with higher-efficiency rigs and much more experience, Devon averages only about 12 days to drill a Barnett well, and “we’ve actually drilled some wells down in southwest Johnson County in about six days,” Foster said.

Drilling-rig design “has improved dramatically in the past 10 years,” with rigs now “ideally suited to drill these horizontal wells,” Nichols said.

Devon uses a “walking rig” device to scoot a 156-foot-high rig between surface well bores at its southwest Tarrant pad site. If well bores are 20 feet apart, the rig can move that far in just an hour. Without the walking device, it could take two days to disassemble a rig and set it up 20 feet away.

The Barnett wells that Devon has drilled this year have provided “some of the best results we’ve ever gotten,” Nichols said.

…

Ample supplies from dramatic increases in U.S. shale-gas production have kept prices low, as the industry has become “in part … a victim of our own success,” Nichols said.

Devon has dropped to 12 drilling rigs because it can keep production at least flat at that level of activity and because “at this time, the country just doesn’t need any more natural gas,” Nichols said.

Production declines have been lower than expected in Barnett wells, he said. There will be “steep declines in the first year, but it flattens out a lot sooner than we originally thought” — often after 12 to 18 months of production, he said.

Natural gas consumers are not complaining. Even while oil prices have moved much higher post-2008, domestic U.S. natural gas prices remain held in the $4 to 5 MMBtu range. And with natural gas prices playing a significant role in competitive wholesale power prices, electric consumers are seeing some benefits, too.


ALSO: Another good story on Devon’s acquisition of Mitchell and development in the Barnett Shale appeared in The Oklahoman yesterday.

Advisory committee’s fracking report spurs outpouring of spin

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Michael Giberson

Even before the natural gas subcommittee to the Secretary of Energy Advisory Board released it’s “Ninety Day Report” on hydraulic fracking today, anti-fracking groups shifted their spin operations into high gear. On Monday, a letter to President Obama sponsored by 68 groups called on him to “employ any legal means to put a halt to hydraulic fracturing” in natural gas development. On Wednesday, the Environmental Working Group published a letter sent to Secretary of Energy Steven Chu expressing concern over a “lack of impartiality” on the natural gas subcommittee.

This morning many newspapers are carrying stories on the report. The New York Times article by reporters Robbie Brown and Ian Urbina was noteworthy for the number of times it referred to earlier New York Times stories written by Ian Urbina. (Note especially the mid-article paragraph that begins, “After The New York Times published a series of articles … President Obama asked Steven Chu, the energy secretary, in May to produce an advisory report within 90 days on ways to improve the oversight of natural gas drilling.” To which I respond: After Knowledge Problem first made mention of shale gas production, Ian Urbina wrote several widely-criticized stories on natural gas drilling for the New York Times.)

The Washington Post story concluded with an inadvertently amusing pair of paragraphs relaying the views of Friends of the Earth:

But groups such as Friends of the Earth — which joined 67 other organizations in asking Obama on Monday to impose a moratorium on hydraulic fracturing — questioned why the panel would issue a report when the EPA was in the midst of a multi-year study.

“We’re talking about this 90-day rush to judgment that’s just inappropriate,” said Damon Moglen, who directs climate and energy policy for Friends of the Earth.

Apparently a 90-day “rush to judgment” is inappropriate, but by day 87 the Friends of the Earth had already concluded that fracking for natural gas should be stopped immediately.

The “Ninety Day Report” released today is presented as a “draft” document. The public can submit comments on the report, the full Secretary of Energy Advisory Board will review the draft prior to formally submitting it to the Secretary on August 18, and the final report will not be issued until November 18, 2011. See the US DOE website for details.

More internal review of the NYT shale gas skepticism articles, more dishonest journalism discovered

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Michael Giberson

While I was vacationing in New Mexico and Arizona, New York Times public editor Arthur Brisbane continued his analysis of the pair of late June articles in the newspaper that suggested widespread insider skepticism over the size and significance of recent shale gas developments. A June 26 story suggested the presence of significant skepticism within the gas industry and a June 27 story suggested an active internal debate among officials at the U.S. Energy Information Administration. Both stories relied heavily on highly-selective anonymous comments taken from emails that had names and much other identifying information redacted. Both stories have been discredited by subsequent revelations.

See Brisbane’s review of the June 26 story here, and my comments on the episode here: “The energy industry insiders that didn’t bark.”

Brisbane’s article on the June 27 story begins with a disclosure by the EIA that the emails quoted in the story were “largely to and from a person who was hired by E.I.A. in 2009 as an intern and later developed into an entry-level position.” Nowhere in the June 27 story does it mention that some of the quotes presented as examples of EIA skepticism were by an intern or newly-hired college graduate. Instead, in the article the intern/entry-level employee was referred to variously as “one official” at the EIA, as an “energy analyst,” and finally as “one federal analyst.” Brisbane finds the presentation to be sloppy and misleading.

If the emails to and from the intern/new employee are eliminated, what remains in the story is some concern over the lack of independent EIA expertise on some petroleum geology topics and some probably healthy skepticism of early industry claims of a vast and newly-accessible gas resource.

In my view, by using multiple descriptors to mask the identity of a single emailer, then redacting any mention of internship or entry-level employment status in the original supporting documents presented with the story, the reporter of the June 27 article intentionally sought to mislead Times readers concerning the nature of internal debate at the EIA. It is just more dishonest journalism by reporter Ian Urbina. (Brisbane somewhat-more-mildly concluded that the story exhibited “some of the classic problems associated with anonymous sourcing” in journalism.)

RELATED:

The Times posted the unredacted emails, once they had been released publicly by the EIA, so readers are now in a better position to judge for themselves whether or not the emails constitute serious internal dissension at the agency.

Gas-industry website Energy In Depth - which has been quite critical of the Times natural gas reporting – seized upon the revelations with unsurprising glee. Their commentary noted that a key EIA official cited in the June 27 story was just an intern, and then drills deeper into the unredacted email to discover that the intern exchanged a number of emails on shale with the Natural Resources Defense Council and attempted to feature the NRDC’s shale gas criticisms on an EIA website on shale gas.

 

The energy industry insiders that didn’t bark

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Michael Giberson

Dozens of energy industry insiders have gone missing in recent weeks, in what must be the largest unreported crime wave ever. Or possibly the energy insiders have been silenced by a vast powerful and secret industry cabal, which has compromising photos of the insiders or something like that, which would also be a large unreported crime wave. Somehow many energy insiders have been kept from voicing their opinions by some nefarious means. I don’t know what exactly is going on, but how else do you account for the absolute lack of supporting comments by any of the thousands of experienced geologists, geoscientists, petroleum engineers, and oil and gas analysts who responded to the New York Times article on shale gas skepticism by saying, “I’ve seen some of this data and what the Times reports is true.”

There must be a vast conspiracy. Muckrakers start your engines! I mean, either that or the Times was just wrong.

Maybe I’m taxing your interest by following the story of the New York Times shale gas skepticism into the weeds. I’m fascinated, though, by the way ideas rocket around the public, rebound into politics, and come out in the form of changes in law and regulation. The skeptic articles were pretty weak tea, but because it was the Times they made a big splash.

So where are we now? After the Times public editor posted his analysis critical of the reporting standards exhibited in Urbina’s one-sided stories, the national editors responsible for green lighting the articles issued a harsh reply (which the public editor posted on his blog: “Times Editors Respond to my Shale Gas Column“). A senate committee held a hearing yesterday directed at the EIA’s shale gas estimates; EIA is sticking to it projections.

Meanwhile, shale gas skeptic Art Berman, one of two critics quoted by name in the stories, feels unjustly accused by a few pieces in the backlash to the Times pieces. (See his blog here, specific links below.) One article posted at the Real Clear Science blog speculated without evidence that Berman was scheming to denigrate shale gas to promote coal gasification, and said Berman might have been involved in market manipulation or insider trading surrounding publication of the skeptics article. The RCS post makes a big deal out of some of Berman’s speeches and other public appearances. The allegations directed at Berman are mostly nutty innuendo. Berman complained and the post was revised. (Revised post here; related Berman complaints here and here. HT to Berman, since I wouldn’t have noticed the RCS post but for his vociferous complaint.)

The second critic quoted by name is Deborah Rogers, plumped in the Times story as “a member of the advisory committee of the Federal Reserve Bank of Dallas” and “former stockbroker with Merrill Lynch” and derided in some of the backlash writers as a mere “goat farmer.” The RCS post reports Rogers has “been fighting the natural gas industry – and Chesapeake Energy in particular – tooth and nail for years.” Environmental group Earthworks summarized Roger’s background with natural gas, suggesting she became interested after Chesapeake began drilling near her property in April 2010. If correct, then hardly “fighting … tooth and nail for years,” but probably a material fact that should have been mentioned in the Times piece which cites her as an expert. (Here is a link to a presentation Rogers gave at the Earthworks 2010 People’s Oil and Gas Industry Summit held in Pittsburgh. I’ll only observe that she hides her financial expertise well.)

The other ‘backlash’ effort worthy of Berman’s complaint was a fascinating analysis presented by Ken Boehm of the National Legal and Policy Center in the form of a letter to the New York Times, subsequently posted on the NLPC website. (Another HT to Berman! See his responses to the NLPC here and here and here.) Boehm, or someone working with him, carefully picked through the email contents and spent a great deal of time staring at the little black boxes used to redact the identities in the email trove posted by the Times. He concludes that many of the emails were either sent or received by Berman. Since Berman is quoted by name in the article and prominently associated with the skeptic point of view, Boehm concludes he cannot really be a confidential source and that the reason reason the Times hid Berman’s name was to mislead readers. Berman could easily clear up this particular issue by indicating which of the emails that the Times has posted were to or from him.

Boehm also complains that the Times article doesn’t explain that Berman has been the most prominent supporter of the shale gas bubble idea and makes some money from speaking and consulting on the idea. But the article does call Berman “one of the most vocal skeptics of shale gas economics,” and, frankly, speaking and consulting on his views about shale gas economics is exactly what an experienced industry consultant like Berman should be doing. Berman may be absolutely wrong about shale gas economics, but he is out there very prominently staking his business and reputation on his beliefs. That he gets paid for his geology and energy industry expertise? – that’s pretty normal for an energy industry consultant.

How should we sort all of this out? The initial Times article was shoddy work. No matter how many background interviews were done, no matter how much well data was examined, the piece was written to convey the false impression that there is a widespread, growing view that the shale gas boom is some sort of Enron-Ponzi scheme-shell game hoax being played by a handful of natural gas developers on the rest of the industry. As a result of this story, I predict that for a year or two we’ll be hearing anti-gas industry activists claiming “it’s just an Enron bubble anyway” as an excuse to stop development. Urbina and his editors ought to go back to journalism school; as a public service the Times should publish a story that allows readers to better understand shale gas skepticism.

Berman can contribute his own bit of public service by claiming the emails sent to or from him among the emails the New York Times relied upon in the piece. I don’t say he as an ethical obligation to do it – it was the Times shoddy journalism practices that presented them publicly in their redacted form – but he could help advance public understanding of shale gas supply by doing so, and that is something he reportedly would like to advance.

Meanwhile, I still don’t see any outpouring of support for the story from like-minded skeptics. After Berman’s years of hard work on the issue, is he still essentially the only person with a credible industry background willing to publicly declare his skepticism? Some anti-gas development activists have lauded the Times, but only because it provided them another bit of ammunition in their local political battles. Has anyone knowledgeable about oil and gas resource development came out in public agreement with the stories published in the Times? Not to my knowledge.

Where are all of these skeptical insiders the Times writes of?

NYT editor on shale gas skeptic article: we should have done better

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Michael Giberson

As mentioned here a few weeks ago, links below, the pair of New York Times articles giving voice to shale gas skeptics were badly done. (I called them no more than “an impressive collection of shale skeptic sound bites.”) I was far from the only critic, and the paper itself received a lot of complaints. The Times‘s reader ombudsman investigated and has published an assessment: “Clashing Views on the Future of Natural Gas.”

The report included a somewhat amusing interchange between the ombudsman, the reporter and the editor for the story (links are in the original, bolding added for emphasis):

I also asked why The Times didn’t include input from the energy giants, like Exxon Mobil,that have invested billions in natural gas recently. If shale gas is a Ponzi scheme, I wondered, why would the nation’s energy leader jump in?

Mr. Urbina and Adam Bryant, a deputy national editor, said the focus was not on the major companies but on the “independents” that focus on shale gas, because these firms have been the most vocal boosters of shale gas, have benefited most from federal rules changes regarding reserves and are most vulnerable to sharp financial swings. The independents, in industry parlance, are a diverse group that are smaller than major companies like Exxon Mobil and don’t operate major-brand gas stations.

This was lost on many readers, including me. Michael Levi, a senior fellow for energy and the environment at the Council on Foreign Relations, wrote that the article “repeatedly confuses the fortunes of various risk-hungry independents with the fortunes of the industry as a whole.”

He told me he hadn’t realized that the report was focused on independents and read it more broadly, adding, “If I didn’t know they were talking about certain independents, then Times readers — who don’t know what an independent is — they aren’t going to know what they are talking about either.”

This confusion stems from the language in the article, which near the top referred to “natural gas companies” and “energy companies.” The term “independent” appeared only once, inside a quoted e-mail.

LINKS

The stories: “Insiders Sound an Alarm Amid a Natural Gas Rush,” the focus of the discussion above, and from the next day, “Behind Veneer, Doubt on Future of Natural Gas.”

Notable among objectors to the NYT’s articles was the panel that put together the MIT study on The Future of Natural Gas, released about two weeks before the newspaper stories.

The Council on Foreign Relation’s Michael Levi, quoted in the excerpt above, has an article in The New Republic on the natural gas fracking industry’s public perception problems.

My posts in response to the articles, which include links to some of the other reactions:

 

New York regulators take steps toward allowing fracking for natural gas production

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Michael Giberson

Today the New York Department of Environmental Conservation took a few steps toward permitting fracking of natural gas wells, a process necessary to produce natural gas from underground shale formations. Regulatory processes being as they are, it likely means fracking will remain off-limits in the state for some time.

News reports include favorable reactions from both industry-group Energy in Depth and an attorney at the Natural Resources Defense Council, which seems like a sure indication that something is wrong. ;-)