Berman To McClendon: Some Support From An Unexpected Source

This has been a tough period for Chesapeake Energy and Aubrey McClendon with his loans and losses on drilling investments. Despite these issues, I give him and his company credit for vision and leadership in the shale revolution.

He once described me as "a third-tier geologist who considers himself a reservoir engineer, that somehow [knows] more about the shale gas revolution in America than companies that have combined market caps of almost $2 trillion and have spent hundreds of billions of dollars to develop these new resources, I mean, it's ludicrous."

Nice.

The logic is that corporations that spend billions of dollars of shareholder money are inherently more knowledgeable and credible than industry professionals who have published dozens of technical papers on the questionable reserves and economics of shale gas.

What the revelations about McClendon's losses really mean is that what we have been saying for years is true: shale gas is an economic loser.

Still, McClendon has shown singular direction and foresight in an exploration and production industry commonly characterized by the herd mentality of late adopters.

Meet the man the shale gas industry hates

Dave Parkinson has written a good article in The Globe and Mail about me called "Meet the man the shale gas industry hates."

I could say a lot about some of the comments by industry people in the article, but I will focus on Devon Energy spokesman Chip Minty's statement that, "We kind of look at Arthur Berman as a dinosaur. With every day that goes by and these shale production numbers come in, the validity of Arthur Berman's claims becomes more questionable."

First of all, Chip, let's talk about grammar and proper English. "We kind of look" sounds like teenager speak. Do you have an opinion about me and my work or kind of an opinion?

What Chip Minty is really saying is that he dismisses the decades of industry experience that underlie the many technical articles that I and my colleagues have published on shale gas reserves and economics. If he had a technical rebuttal to our work, he would have presented it but his best shot is to say that I am a dinosaur. Touche, Chip. That really gets to the heart of the problem!

His company and the industry have recklessly over-produced large volumes of natural gas at a price that is not commercial for anyone. The headlines about Chesapeake Energy and its problems over the past week show that shale gas investments are not profitable.

I am used to the personal attacks by shale gas defenders. If they had anything to say about the real issues of lack of profit and shareholder equity, they would.

Who is the dinosaur in this debate?