Friday, March 23, 2012

To The Editor of The New York Times

“U.S. Inches Toward Goal Of Energy Independence” (news article, March 23) adds fuel to a growing but unfounded perception that recent increases in domestic oil production means we will someday be able to forgo imported oil altogether.

There is no question that production has increased. This, however, constitutes less than five percent of total U.S. consumption. While any reversal in production decline is encouraging, this is far from a cause for exuberance, let alone long-term confidence in our prospects for energy independence.

The current gap between U.S. crude oil production and consumption remains near nine million barrels per day. This is not a trivial obstacle: maximum U.S. production has declined from 10 million barrels in 1970 to 5.7 million barrels today.

Even assuming the most optimistic published estimates of U.S. crude oil production growth, we would be left with a gap of six million barrels per day. Those who predict energy independence need to demonstrate how this gap will be filled, particularly given the precipitous decline rate of wells that contribute to higher production.

Respectfully,

Arthur E. Berman
Petroleum Geologist, Managing Editor of TheOilDrum.Com, and Director, Association For The Study of Peak Oil and Gas USA
Sugar Land, Texas

Tuesday, March 6, 2012

Rolling Stone Responds to Chesapeake Energy on 'The Fracking Bubble'

Rolling Stone Contributing Editor Jeff Goodell has published a response on March 6, 2011 to Chesapeake Energy's rebuttal of his "The Big Fracking Bubble: The Scam Behind the Gas Boom" that was published on March 2, 2012.

Monday, March 5, 2012

The New York Post: Another Shale Gas Attack

On March 5, 2012, The New York Post featured a post called "Another Shale Gas Attack Full of Hot Air." The author, Abby W. Schachter, noted my dissatisfaction with being mis-quoted in the recent Rolling Stone article "The Big Fracking Bubble: The Scam Behind the Gas Boom."

She wrote, "Only trouble with the claim is the main person Goodell uses to substantiate this claim has now written that he was misquoted, that the reporter had a political agenda and that there is no truth to the reporter's claim."

She, apparently, has the same problem mis-quoting me as Goodell. I wrote that I was mis-quoted but never said that the author had a political agenda or that there was no truth to the reporter's claim.

The statements incorrectly attributed to me in Rolling Stone are "According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling. When the wells don't pay off, the firms wind up scrambling to mask their financial troubles with convoluted off-book accounting methods."

What I wrote was "That may be what Goodell thinks but that is not what I said, think or imply."

The two quoted statements by me that follow in the same paragraph were accurately represented by Goodell.


Saturday, March 3, 2012

I Was Mis-Represented in the Rolling Stone Article: The Big Fracking Bubble

"The Big Fracking Bubble: The Scam Behind the Gas Boom" by Jeff Goodell was published March 1, 2012 in Rolling Stone. I was interviewed by Goodell and was mentioned in the article. I sent the following rebuttal to the editors of Rolling Stone:

March 3, 2012

To the Editor:

I was interviewed by Jeff Goodell and mentioned in his recent Rolling Stone article "The Big Fracking Bubble: The Scam Behind the Gas Boom."

He wrote, "According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling."

I never said that Chesapeake or any other company involved in shale gas drilling is involved in or resembles a Ponzi scheme. That may be what Goodell thinks but that is not what I said, think or imply. I have expressed doubts about the viability of the shale gas business model used by some companies, but I do not question the legality of those business models. The term Ponzi scheme does not remotely apply to the way that exploration and production companies obtain capital and rationalize earnings.

Jeff Goodell may think that some shale gas companies are involved in Ponzi schemes, but such statements cannot be attributed to me.

Respectfully,

Arthur E. Berman