10/22/2012 06:36 am ET Updated Dec 22, 2012

The New York Times ' Natural Gas Mania

Once a bee gets into the New York Times' bonnet it has a tendency to make a lot of noise and wont fly easily away. For reasons unbeknownst to mere mortals the New York Times has an obsession with its reportage on the natural gas industry that slips to the edge of buffoonery. This Sunday's Business section carried a vast three-page "exposé" ("After the Boom In Natural Gas") on the insinuated malfeasance of stripping profits from the likes of the great unwary as Exxon Mobil who bellied up to spend $41 billion to buy XTO, a giant natural gas company, when "prices were almost double what they are today".

"We are losing our shirts today," said Rex Tillerson, Exxon's CEO. "We are making no money. It's all in the red." This coming from the head of a company that has booked humongous profits selling us all directly or indirectly at vast margins gasoline, diesel, heating oil and of course crude oil. For the New York Times, it appears, natural gas being sold at bargain prices is a cause for condemnation.

Most bizarrely these profound revelations come but a little over a year since the Times regaled us with another series of exposés -- "Insiders Sound Alarm Amid a Natural Gas Rush" 06.25.11 and again "Behind Veneer, Doubt On Future of Natural Gas" 06.26.11 -- replete with "source" documents "whose names and identifying information have been redacted to protect the confidentiality of sources, many of whom are not authorized to communicate with the Times" (also please see "The New York Times Flays Natural Gas To The Cheers of the Oil Industry, OPEC and Coal Producers" 06.28.11). The thrust of those Times articles insinuated that the potential of shale gas abundance was being vastly hyped, interjecting terminology such as "Ponzi Scheme" and "replay of Enron." Going on to excoriate the United States Energy Information Administration's their then optimistic assessments of the potential for shale gas reserves, by implying that their research relies on "outside consultants with ties to the industry."

Now a little over a year from the Times' 'revelations,' we are informed that there is a super abundance of natural gas, so much so that innocents such as Exxon and T. Boone Pickens are suffering a discomfiting interlude of negative returns on their natural gas investments after having benefited in the billions from their other fossil fuel plays.

Giving credit where credit is due, the article does give a passing mention that the price of natural gas has made it possible for gas-burning electric utilities to curb price rises for electricity, for chemical and plastic plants using gas as feedstock to site their operations in the United States. That Dow Chemical, a major gas consumer, "has assembled a list of 91 new manufacturing projects and representing $70 billion in potential investment and up to three million jobs" because of the abundance of cheaply priced natural gas in the United States.

Bizarrely, a key thrust of the article goes on to flay the banks and investment bankers who encouraged this massive investment in shale gas plays and the profits they garnered in doing so, presuming perhaps they were working for the Salvation Army.