The early days of the shale gas boom around Fort Worth were heady ones. Chesapeake tossed money around as if it were limitless. Need a new museum of science and history? They helped cover it. A sponsor for the annual Thanksgiving parade? Done. Chesapeake hired actor Tommy Lee Jones to plug the benefits of natural gas with tag lines like “Let’s get behind the Barnett Shale” and “It’s here for good.” The industry group, Natural Gas Alliance, claimed the gas was going to flow for 100 years.
But is it? Two new and significant papers related to the finances of gas drilling and natural gas suggest the natural gas boom will not be here for anything like that long. The vast reserves touted by Chesapeake and every other natural gas company, and echoed by state and federal government agencies, have turned out to have been either mostly hype or so inaccessible that they don’t count for practical purposes. In just a few years, the boom has nearly gone bust, and it is beginning to drag a lot of communities and investors down with it.
Why? First, according to the authors of the reports, because the reserves simply are not there. And secondly, because a push to extract as much gas as possible from each field as quickly as possible has produced a glut on the market, which has caused natural gas drilling to be unprofitable in all but the very best areas of the best shale fields.