Analysts question sustainability of US shale gas in Salon interviews.

Brad Jackson in Salon: “….But what if cheap, domestic natural gas isn’t actually sustainable? What if rosy claims of fracking our way to energy independence is just an industry pitch that Washington has bought?”“Two new reports reveal that the natural gas narrative may be more hype than reality and warn that putting too much of our eggs into this energy basket could be detrimental to our future economic health. ….Art Berman: “Right now, everybody’s losing money. And the whole picture is highly tenuous.”The frenzied drilling eventually led to a glut, or overproduction, of shale gas, which depressed prices and made these projects losing propositions. Today, the overall U.S. gas supply is flat, which it has been for over two years now. “It looks like an industry that’s in big trouble …..You look at the balance sheets of these companies and they’re terrible. Most of them don’t have any retained earnings from their gas efforts. Giant write-downs every quarter. ….If you look at plays like Haynesville, there are fewer than 30 rigs running in Haynesville. At one time, there were over 200. Barnett, there are something like 30 rigs. At one time there was something like 185.”
new study by independent geologist David Hughes supports prior findings by Berman and also the U.S. Geological Survey (USGS), which shows operators greatly overestimating actual well production on shale plays throughout the country, from a minimum of a 100 percent to as much as 400 to 500 percent.  ….The Hughes report, published by the Post Carbon Institute in February, performed an analysis on 60,000 shale wells and every play in the U.S. and their numbers corresponded with findings by the USGS.
….Back in 2009, when Berman started speaking publicly about the realities of the so-called shale gas boom, Deborah Rogers, a member of the advisory committee of the Federal Reserve Bank of Dallas at the time, found the irate industry response to Berman highly suspect. “I mean the Chesapeakes and Devons of the world just went ballistic,” Rogers, a former Wall Street investment banker and a financial consultant, said in phone interview. “As a financial person at the time, back in 2009, I remember thinking this is very interesting because this reaction is just over the top.” So she began to do some digging herself into well data from shale companies, discovered the numbers didn’t add up, and soon became one of the early industry insiders to sound the alarm about the overestimation of shale gas wells. ….Further scrutiny led Rogers to realize that Wall Street, similar to its selling of toxic assets during the real estate boom, had worked behind the scenes to manipulate prices in order to facilitate better fees for themselves.
She explores both of these findings and their implications in a new report, “Shale and Wall Street: Was the Decline in Natural Gas Price Orchestrated,” which was released in February.
…..Rogers, founder and executive director of the nonprofit Energy Policy Forum, and a recently appointed primary member to the U.S. Extractive Industries Transparency Initiative for the Department of the Interior, makes clear that the investment banks didn’t do anything illegal in performing these shale gas transactions.
Her issue, she said, is that there’s absolutely no way the banks didn’t realize those wells weren’t performing anywhere close to projected numbers.
“Everything they did before the mortgage-backed securities bubble was legal, too,” noted Rogers. “And we saw the consequences of that. But that’s another good argument for why we need financial reform.”
In her report, Rogers cites financial analyst calls going back to 2007 and 2008, which reveal this was the natural gas industry’s plan all along, while it continues to sell American consumers and utility companies on becoming ever more dependent upon natural gas.
If successful, she said, “We will have affected essentially exactly the same scenario that we find ourselves in with crude oil now — much more dependent and at much higher price.” Rogers added, “So we get squeezed, but they make off like bandits.”