New York Times Passes Gas
Calls it ‘news.’
Aug 1, 2011, Vol. 16, No. 43 • By STEVEN F. HAYWARD
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.