By now just about everyone has jumped on board the natural gas bandwagon (see “The Gas Revolution,” April 18, 2011). Its newfound abundance inside the four corners of the United States is proving to be a disruptive factor in the nation’s energy mix. Cheap natural gas adds to the pressure on coal-fired electricity, but also makes wind and solar power much less feasible, even with massive subsidies. Natural gas-powered cars and trucks might offer a way of significantly lowering our oil imports, while at the same time the technology that has unlocked new gas supplies is starting to deliver a substantial increase in domestic oil production, reversing a 30-year slide. Cheap, abundant, domestically produced energy? Naturally all the usual suspects are unhappy about this.

No one seems more unhappy than the New York Times, which was late to recognize the unfolding natural gas story, even though much of it was happening in its own back yard. So late last June the Times published a multi-part series by their gas beat reporter, Ian Urbina, suggesting that prospects for the “gas revolution” are not merely hyped, but constitute the next bubble certain to burst. There’s even an insinuation of possible fraud on the part of the gas industry, of natural gas as a “Ponzi scheme.” And just to make sure none of its readers missed the point, the Times even deployed the “E-word” in the headline: “ ‘Enron Moment’: Insiders Sound an Alarm Amid a Natural Gas Rush.” The two stories are more evidence of the Times’s long slide into agenda-driven journalism that excuses shoddy practices, dubious sourcing, and appalling economic ignorance.

The main claims of the stories are that gas reserves are being overestimated by both industry and the government, that wells are depleting faster than claimed, and that many gas extraction companies are losing money and will eventually face financial collapse. But the Times offers no compelling data or analysis to support these contentions. Instead, it relies entirely on the sensational view of two would-be whistleblowing “insiders,” along with leaked emails and documents. The Times fails to disclose that the two principal “whistleblowers,” Deborah Rogers and Art Berman, are strong skeptics of natural gas, and that the idea of a “gas bubble” is cover (in Rogers’s case, at least) for opposition to the “fracking” technology that is being used to produce the new gas fields.

Rogers is identified by the Times as a member of the advisory committee of the Federal Reserve Bank of Dallas; undisclosed is her affiliation with the Oil and Gas Accountability Project, an environmental group opposed to fracking. The Times similarly describes Art Berman as a “geologist who worked two decades at Amoco and has been one of the most vocal skeptics of shale gas economics,” but omits his alignment with the controversial “peak oil” community whose ideological dislike of fossil fuels drives its conclusions. Unlike Rogers, Berman has considerable expertise in the area but has been a controversial figure in the oil and gas industry for some time. It is evident that Urbina simply put his byline at the disposal of Rogers and Berman’s anti-gas agenda.

The use of company emails and documents from the Energy Information Administration was even more dubious. These were provided to the Times mostly by Rogers and Berman. Urbina never contacted the authors of some of the emails cited in the story, and contacted others in a perfunctory way. He misidentified one source, never disclosed that some emails were several years old, and did not report the context of several quoted emails, which were written in reaction to hearing one of Berman’s skeptical presentations. In other words, not exactly a lot of heavy lifting on the reporter’s part.

But the most glaring defect of the series was its stupefying economic ignorance and disregard for any data analysis. Urbina quotes statements skeptical of several Texas gas fields, without noting that production continues to increase in all of those fields. He didn’t note the connection, taught in Econ 101, between recent declines in gas rig activity in Texas and the fact that gas prices have fallen by two-thirds. Urbina unwittingly has part of the story right, but for the wrong reasons: Some gas exploration companies are facing financial distress only because the industry has been too successful in exploiting new gas supplies.

Urbina could be on to something when he says that the current natural gas price of slightly over $4 per thousand cubic feet is too low to support the financial structure of many players in the industry, but that’s not the story he explored. Nor did he report on how different geological conditions from region to region present different extraction costs. These are not signs of a fraudulent bubble, but signs of a fast-moving market responding to price signals. (While everyone is talking about gas drilling, almost unnoticed by the Times and other major media is that the BakerHughes rig count now shows there are more oil drilling rigs in the field in the United States than gas drilling rigs. As recently as six years ago gas drilling rigs outnumbered oil drilling rigs by four to one. This is occurring precisely because the price of gas has fallen while the price of oil has risen, and this is why the next “surprise” to hit the New York Times, within a couple of years, will be sharply rising domestic oil production.)

It is touching that the Times would profess such concern for investors and warn them of another catastrophic bubble like housing and the Internet. But the story prompted a predictable response in Washington: Democrats opposed to fossil fuels, such as the irrepressible Rep. Edward Markey, called for hearings and investigations by the Securities and Exchange Commission, no doubt to buttress the anti-fossil fuel agenda.

But if the Times and anti-fossil fuel groups thought the series would provide a boost to that agenda, it was drowned out by the widespread denunciation that came not just from the gas industry or individual companies singled out in the stories, but from many neutral experts. Michael Levi of the Council on Foreign Relations, who is no shill for anyone’s energy agenda, wrote scornfully of the Times’s “war on shale” that it had produced stories of “pretty poor quality” raising a “red flag.” Levi observed, “There’s a pattern: Urbina was clearly looking for negative views of shale gas, and had no problem finding them. Given the massive size of the industry, and the number of financial bets being placed upon the sector, that shouldn’t be a surprise. What is a surprise is that Urbina hasn’t done much to put them in context.” MIT’s well-regarded natural gas study group also issued a critical statement.

The most embarrassing spanking, however, came from the Times’s ombudsman, Arthur Brisbane, who filed a long report in the paper’s July 17 edition calling the story “a journalistic gamble,” and concluding that “the article went out on a limb, lacked an in-depth dissenting view in the text and should have made clear that shale gas had boomed.” The Times national editors who oversaw Urbina’s story, Rick Berke and Adam Bryant, are standing pat, pushing back against Brisbane with an argument that boils down to “we did too work hard!”

The essential bias of the Times’s energy reporting can be grasped with a simple query about “balance.” If the Times were to work half as hard investigating the financial weakness and intrinsic market conditions of “renewable” energy such as wind, solar, and biofuels, they could run a monthlong series on a real bubble with shocking and often scandalous details. But if they did so, would the erstwhile liberal guardians of consumers and the marketplace call for hearings and SEC investigations? That question is so easy even a Times editor could get it right.

Steven F. Hayward is a resident scholar at the American Enterprise Institute and author of the Almanac of Environmental Trends.

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