EIA Defends Shale Gas Claims

Congressman Ed Markey wants agency to provide more supporting documentation.

The U.S. Energy Information Administration backed its data June 27 regarding shale gas prospects amid calls by a Democratic legislator to justify its "bullish claims" on natural gas resources.

Rep. Ed Markey, D-Mass., asked the agency to provide the methodology and supporting materials behind its estimates for natural gas reserves.

The New York Times published a story June 26 offering evidence that several agency officials are skeptical about the amount of gas available in shale deposits.

The EIA points to its Annual Energy Outlook report published April 26 that acknowledges "there is a high degree of uncertainty" regarding recoverable gas projections. But the agency maintains that even with uncertainties associated with shale gas resources and costs considered, its previous production estimates are still attainable.

"We believe that the report stands on its own merits as we required the contractor to fully document all work and to clearly describe the methodology that was employed to produce the estimates," EIA said in a statement. "We welcome any substantive comments on the technical merits of the report."

Through May, shale gas exceeded 30% of total marketed natural gas production, the EIA wrote in a June 20 email addressed to New York Times reporter Ian Urbina.

Prior to 2005 shale gas constituted only 4% of natural gas production and had grown to 23% of production in 2010, the agency says.

The Times quoted several emails from anonymous EIA employees who expressed skepticism regarding the profitability and availability of shale gas. One email suggested the shale industry may be "set up for failure" and that many companies could go bankrupt as a result, according to the Times report.

The article cites another email from someone identified as a senior official in the forecasting division who said the industry could be in the midst of a "gold rush" where only a few wells hold significant resources.

The article also questioned the EIA's independence from the oil and gas industry. The Times notes that the agency depends on research from industry consultants, who in some instances pull data from energy company news releases.

Markey has asked the EIA for any information regarding contractors working with the agency on its estimates, the administration's relationship with the contractors and the information gathered from gas industry representatives.

The EIA says it develops its data from a variety of sources, including energy industry consultants HPDI LLC, Lippman Consulting and Intek Inc. It also utilizes data from the U.S. Geological Survey, oil and gas company presentations and press reports.

See also:

Shale Gas: The New Black Gold

Study: North America Dominates Global Shale Gas Market

Shell Plans to Build Ethylene Cracker in Marcellus Region

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