The Energy Information Administration (EIA), academia, industry and analysts on Tuesday continued to question why the New York Times (NYT) relied on misleading, outdated information — and failed to contact key resources — before publishing damning articles about the U.S. shale gas industry.

An uproar followed stories published on Sunday and Monday by the NYT, which cited unnamed industry and government sources in describing the shale gas industry as a “Ponzi” scheme with a future similar to Enron Corp. and the bursting of the bubble (see Shale Daily, June 28). Chesapeake Energy Corp. CEO Aubrey K. McClendon published a lengthy rebuttal and an outpouring of other criticism has followed, all directed at the articles’ direct contravention of the facts in a tabloid style, part of a smear campaign against natural gas.

EIA’s views on shale gas, which were provided in advance to the New York Times (NYT) for an article it was preparing, “differ in significant respects” from those published by the newspaper on Monday, according to the director of the Office of Petroleum, Natural Gas and Biofuels Analysis within the EIA’s Energy Analysis office.

The EIA’s Michael Schaal said late Monday the newspaper had contacted him earlier this month to inquire about shale gas. He replied on June 20 and provided an overview of the agency’s approach to the shale gas issue, which included material to address reporter Ian Urbina’s questions.

“Those interested in EIA’s views on shale gas, which differ in significant respects from those outlined in the June 27 article, may want to review the EIA response to the inquiry…,” Schaal wrote.

“One guiding principle that we employ is, ‘look at the data,'” Schaal said in his original response to Urbina. “It is clear the data shows that shale gas has become a significant source of domestic natural gas supply. Prior to 2005 shale gas constituted only 4% of natural gas production and had grown to become 23% of production for 2010. EIA’s continued monitoring of the situation indicates that growth in shale gas production continues and that shale gas has exceeded 30% of total marketed natural gas production through May of this year.”

Kenneth B. Medlock III of the Baker Institute Energy Forum at Rice University noted that he too was cited in the NYT story based on a presentation he made in May 2010 at the Federal Reserve Bank of Dallas. The Baker Institute’s Energy Forum is a nonpartisan public policy institute intended to inform the public and policymakers about the quantity and security of energy supply.

“During the presentation at the Dallas Federal Reserve Bank, I showed a projection for U.S. shale production by region that indicated production from the Barnett Shale would decline slightly for a period of time as investors temporarily shifted priority to larger and less costly plays in places like the Haynesville and Marcellus shales,” said Medlock. “This shift, as I explained, was a matter of economics, not geology, since all of the plays have large resource potential but different production costs and proximity to market. It is the assessment of the relative development costs, as well as the proximity to end-use market, that leads to a prediction of a flattening of Barnett production against a backdrop of stronger growth in other large shale regions.

“Again, this is not related to the size of geologic resources or their geological performance. As opportunities have emerged to produce natural gas from shales that are closer to end-user markets, such as the Haynesville and Marcellus, emphasis has moved away from the Barnett region. However…the projection is not one of sharply declining production in the Barnett, just a flattening profile for a period of time as investors shift attention to plays that offer better profitability.”

Medlock said in the Rice research, “we rely on peer-reviewed, scientific assessments of the properties of shales to develop technically recoverable estimates and associated finding and development cost curves. We distinctly avoid nontechnical publications such as investor relations reports.”

A lot of the data used by the Energy Forum, Medlock said, is based on research by the American Association of Petroleum Geologists, the Colorado School of Mines’ Potential Gas Committee and the U.S. Geological Survey.

“To that point, geologists have been writing about shale resources for decades, and only recently innovations enhancing the technical feasibility of shale have occurred. The fact that geologists have been writing about the properties of shales since at least the early 1970s is indicative of the fact that, to many of them, shale becoming technically and commercially exploitable was largely an issue of technology, not necessarily geology.”

ExxonMobil Corp.’s Ken Cohen offered another industry perspective. ExxonMobil is the largest gas producer in the United States.

“Though he did not bother talking to us, the writer did seem to put a lot of weight on the word of a retired geologist who just two years ago wrote that it was ‘difficult to imagine’ that the ‘Haynesville Shale can become commercial.’ Ironically, the Haynesville Shale is now the largest gas producer in the United States…If the writer had bothered to call us, we would have told him that ExxonMobil’s investment approach is disciplined and based on a long-term view of global market conditions. We invest through market cycles and are not driven to hasty decisions because of day-to-day commodity market volatility. It was this long-term vision that led to the acquisition of XTO and subsequent shale gas ventures…

“The writer also invokes the Federal Reserve to try to lend credibility to his premise that the shale gas revolution is a flash in the pan like the dot-com bubble and built upon misleading or even illegal accounting practices — in this case reserves reporting — like the Enron scandal. A closer read and a quick Google search shows that the person he is quoting from the Fed was appointed to the Dallas Fed’s advisory committee and is a long-time shale gas opponent. The writer conveniently omits a report issued last year by economists who actually work for the Dallas Fed that notes that ‘the Texas experiment in the Barnett Shale proved the technical feasibility of shale gas development and brought costs within bounds that promise to give shale gas an important role in global energy supplies for decades to come.'”

The NYT “has it wrong,” said Dan Pickering, who wrote a commentary as the chief energy strategist of TPH Asset Management, an operating company that is separate from Tudor, Pickering, Holt & Co. Inc. Pickering said “a myriad of companies, hundreds of executives and thousands of employees indicate the industry believes in both the short-term and long-term viability of shales. They are speaking with their capital budgets, their bonus pool, their acquisition budgets…not with their keyboards and chat room postings. If there is any conspiracy or hidden agenda, it’s amongst those writing articles, not drilling gas shale.”

Regina Hopper, CEO of America’s Natural Gas Alliance (ANGA), responded as a representative of ANGA’s 30 independent producer members. The reporting by the NYT on natural gas, she said, “is deeply flawed, inaccurate and misleading. The paper has apparently chosen to ignore important facts that would have presented Times readers with a more balanced perspective. The Times‘ articles have used out-of-context quotes by people the reporter appears never to have interviewed, have quoted unnamed sources with no account of their expertise or potential bias, and have disregarded specific and substantive information supplied to the reporter that ran counter to his story line.”