Insiders Sound Alarm on Natural Gas Rush

[amborin]

Insiders Sound the Alarm on the Natural Gas Rush

Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States.

Ministers, pastors and deacons of Fort Worth churches. Dozens of black churches in Fort Worth signed gas leases.
But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

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http://www.nytimes.com/2011/06/26/us/26gas.html?src=me&ref=general

[RC]

1. It sounds like the gas companies have found a way to make shale gas profitable.