Many believe that Natural gas drilled from U.S. shale will deliver a new era of cheap domestic energy for the U.S..
Shale gas also allows better U.S. energy security and environmental emissions benefits as well.
Companies such as Chesapeake Energy (CHK) are extremely bullish on the prospects for shale gas, and believe they can make handsome returns due to lower production costs.
They also expect natural gas prices to rally from current historically-depressed levels. Which would be good news for the ETF United States Natural Gas (UNG).
Yet despite all the shale excitement, some industry observers believe the prospects are being over-hyped and that potential shale gas resources are overestimated. There’s been a heated back and forth between the believers and non-believers, to the extent that some shale critics now accuse shale interests (Big Shale?) of silencing them.
FTEnergySource: The explosion in shale gas is new, and the horizontal wells that are being drilled furiously by Chesapeake are widely known to decline in output fairly rapidly after the first 12 months. This has led some respected resource watchers, including Matt Simmons, to voice scepticism that the shale gas is really about to revolutionise supply.
Art Berman is another expert who has argued vociferously that the decline rates used by the industry under-play the true rates of decline at the average shale gas well. His presentation at a peak oil conference last month and consequent online spat with consultants at Tudor, Pickering and Holt, drew attention (including ours) to the debate.
Now, Berman writes on his blog that World Oil magazine have cancelled his regular monthly column – he claims under pressure from an executive at Petrohawk, another company big on shale gas.