Although my colleague Rodney Graves touched briefly on this story in an earlier post, I had already planned to publish a few comments about it this morning so here goes.

This week's Sunday New York Times featured a piece entitled "Insiders Sound An Alarm Amid A Natural Gas Rush" which attempted to lead readers to the conclusion that natural gas producers such as Devon Energy and Chesapeake Energy (both headquartered in my hometown of Oklahoma City) have been lying about the low cost and abundance of natural gas extracted from fractured shale.  Chesapeake Energy's CEO Aubrey McClendon immediately responded to the story, as did 25 other energy experts in academia, government, and energy production.

The analysis of the article, which highlighted several instances where the NYT reporter(s) appeared to have simply gleaned information from the Internet without bothering to do any serious one-on-one interviews with their sources, concluded that the Times purposefully published a slanted piece (horrors, horrors, I know) designed to damage the natural gas industry, possibly as a sop to left-leaning environmentalists who have recently been working overtime to poison public opinion about the hydraulic fracturing process used to extract natural gas and oil from shale deposits.

Why would environmentalists work so hard to damage the production of a domestic energy source that is abundant, requires little refining, and burns cleaner than any other hydrocarbon fuel?  Chris Helman, blogging at Forbes.com, explains it simply: "I can only guess that the problem, as the Times sees it, is that as long as we have all that cheap gas, there's precious little need for solar panels, windmills and other cornerstones of their much-heralded but slow evolving green jobs revolution."

As I have pointed out many, many times on this blog, no Presidential administration in recent history has invested more in crony capitalism than the Obama Administration, and one of their favorite pet industries is "green energy", specifically the wind and solar power technologies developed by one of his Administration's biggest cronies, General Electric.

And then there is Al Gore, a founding father of the "cap and trade" and "carbon credits" energy schemes pioneered by the global warming movement.  Gore and his partners in Generation Investment Management, World Resources Institute, and other similar organizations committed to saving the planet through rationing carbon-based energy, stand to earn personal fortunes in the billions if their efforts are successful and implemented on a world-wide scale.

And so you have it.  Crony capitalism that favors the elites who just happen to helm government and environmentalist-approved (pardon the redundancy) industries and investment firms once again rears its ugly head as it attempts to crush free market efforts to develop a clean and inexpensive energy source that will be far more beneficial to everyone, but will enrich the "wrong" people in the process.

'Hope and Change' indeed.
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A commenter at Hot Air also had this to say, which is worth considering as well: "As an investor, I had a different take on the article. I didn't see it as an attack on the natural gas industry, but a warning from insiders that an investment bubble is forming around the industry.  Bubbles can form when, in the rush to invest in a given sector, 'dumb money' is willing to jump into even the smallest opportunity without doing adequate due diligence or without fully grasping the potential return on investment.  Unless more utilities replace coal-fire plants with gas and more freight companies transition to CNG engines, investors may be left with collapsing asset values as over-supply depresses prices for the next several decades."

I believe that such conversions can and will happen, but at a rate that is affordable and commensurate with market forces, rather than what we are seeing today, which is the forced conversion of power plants to gas based on government mandates and timetables.  If the government allows the market to function normally without lopsided financial incentives and mandates, bubbles will be far less likely to appear.