{"id":7375,"date":"2012-03-15T07:06:37","date_gmt":"2012-03-15T13:06:37","guid":{"rendered":"http:\/\/stateimpact.npr.org\/texas\/?p=7375"},"modified":"2012-03-16T09:24:45","modified_gmt":"2012-03-16T14:24:45","slug":"as-natural-gas-prices-drop-could-economy-be-at-risk","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/texas\/2012\/03\/15\/as-natural-gas-prices-drop-could-economy-be-at-risk\/","title":{"rendered":"As Natural Gas Prices Drop, Could Economy be at Risk?"},"content":{"rendered":"
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Photo Courtesy of Arthur Berman<\/p>

Arthur Berman is the head of Labryth Consulting, a Geological consulting firm.<\/p><\/div>\n

People see a lot of different things when they look at the American natural gas industry. Some see potential environmental dangers<\/a>. Others see it as a bridge<\/a> to renewable energy. President Obama envisions more than 600 thousand new jobs<\/a>\u00a0from it. But when Arthur Berman looks at the natural gas industry, he sees an iceberg on the open sea.<\/p>\n

“We gotta turn to miss that iceburg, but we sure better start turning ten or 15 miles away from it or else we\u2019re gonna hit it,” Berman, a geologist who consults for energy companies, told StateImpact Texas.<\/p>\n

So it’s no surprise that lately Berman’s developed a reputation as the “Debbie Downer<\/a>” of the natural gas industry. For one thing, he doesn\u2019t think the U.S. has as much of it as has been estimated (up to a hundred years). Berman estimates that reserves could only meet demand for the next 23 years.<\/p>\n

For another, he believes that all the cheerleading for gas has left U.S. financial markets in danger. Here\u2019s how: the rush to extract has brought down natural gas prices. That\u2019s meant less profit for drillers and gas companies. But some of those companies continue to drill. Berman says you\u2019ve got to leave the shale fields of South Texas, and pay a visit to Wall Street to figure it out.<\/p>\n

“Apparently investors — Wall Street — broadly likes growth, they like to see growth. As long as there\u2019s growth somebody\u2019s going to buy that stock and the stock price stays high,\u201d he said.<\/p>\n

Berman says some companies are continuing to drill to keep investment up, even as their profits are plummeting. If natural gas prices continue to fall, and Berman thinks they will, those companies will face a day of reckoning. With so much of the financial markets tied to energy, that could have a ripple effect outside of the natural gas industry.<\/p>\n

Stop us if this is starting to sound familiar, he says, maybe that’s because it should.<\/p>\n

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