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Industry hits out at ‘misleading’ shale-gas articles

First Chesapeake and now America’s Natural Gas Alliance have labelled a series of New York Times (NYT) articles on shale gas “inaccurate and misleading”

The NYT published two articles, on 26 and 27 June, with links to emails and reports by energy analysts and industry insiders. The published documents claimed to represent views by anonymous “officials” within the US Energy Information Administration (EIA), who “voice scepticism” about the productivity of shale-gas wells and the cost of producing the unconventional fuel source.

Flawed, inaccurate, misleading

Chesapeake Energy’s chief executive, Aubrey McClendon, said on 26 June that the articles were “misleading, at best” and claimed that they “obviously have an anti-industry bias”.

Regina Hopper, chief executive of America's Natural Gas Alliance (Anga), also branded the articles’ content as “deeply flawed, inaccurate and misleading”.

“The paper [the NYT] has apparently chosen to ignore important facts that would have presented Times' readers with a more balanced perspective,” Hopper said. “we are now producing vast supplies of natural gas, and as demand grows there will be ample clean, American gas to meet future needs.”

Shale-gas production comprised just 6% – 1.2 trillion cubic feet (cf) – of total US gas production in 2007, according to the EIA. Last year, production soared to make up 17% of the total; growth that looks set to continue. Wood Mackenzie, a consultancy, reckons shale gas will comprise 35% of the US’ total gas output by 2020.

In an email to Chesapeake employees, later posted on the company’s Facebook page, McClendon claimed a group of environmental activists were “the driving force” behind the NYT’s articles and hit out at prospects for increasing renewable energy’s share of the energy mix.

Renewable rant

“It is not clear to me exactly what these environmental activists are seeking to offer as their alternative energy plan,” McClendon said, “but most that I have talked to continue to naively presume that our great country need only rely on wind and solar energy to meet our future energy needs.” McClendon added that wind and solar power are “completely non-economic” without government subsidies.

The International Energy Agency reckons renewable energy will play an increasing role in the global energy mix over the next three decades, with its share of global electricity generation rising from 19% in 2008 to a third in 2035. But getting there will need $5.7 trillion of investment – every year between now and 2035.

The EU wants renewable energy to make up 20% of its energy supply by 2020. Many analysts believe shale gas can be an enabler of renewable development, providing abundant baseload electricity during wind and solar downtimes.

It is impossible to verify the authenticity of the published documents: the NYT says the information was provided on condition of anonymity. Publicly, however, the EIA is bullish about the prospects for developing shale gas on a global scale. A recent report claims there could be 6,600 trillion cf of technically recoverable shale gas reserves in the world.

Chesapeake is the US’ second-largest gas producer, with output of 243bn cf/d in the first quarter of the year, up by 16% over first-quarter 2010. The company, which is one of the pioneers of shale-gas development in the US, has been criticised for its environmental record.

In May, Chesapeake was fined $1.1m by Pennsylvania’s Department of Environmental Protection (DEP) for contaminating private water supplies and for a fire and explosion at a drilling site. The water-well contamination fine is the largest single penalty the DEP has handed out to an oil and gas operator.

It halted operations at some of its shale-gas wells in Pennsylvania for three weeks after a well blowout in April, which causes thousands of gallons of flowback fluids to escape into a tributary of the Susquehanna River.  

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