The New York Times recently sparked a wave of controversy after the news organization published a series of stories that questioned the sustainability of the shale gas revolution. These pieces suggested that shale gas producers have overstated the productivity of their wells and that shale gas fields are unprofitable in the current pricing environment.
These articles undoubtedly had their intended effect, mobilizing both critics and supporters of shale gas development and stimulating a vociferous debate. Although arguments that the emperor has no clothes always attract plenty of eyeballs--the primary motivation of many media outfits--readers must evaluate the logic underpinning these claims and distinguish the rational from the sensational.
The New York Times is correct that some shale gas fields are uneconomic in the current pricing environment, which explains why drilling activity has declined in the natural gas-rich Barnett Shale and Haynesville Shale.
But the articles largely ignore the economics of the Eagle Ford Shale and other unconventional fields that produce large amounts of high-value oil, condensate and natural gas liquids (NGL's) such as butane, ethane and propane. In general, exploration and production firms have shifted production from dry-gas fields to liquids-rich plays that offer superior profitability.
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