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    Shale drilling a Ponzi scheme?

    Will thousands of natural gas wells being drilled shale formations around the country turn out to be a huge bust?That’s the question raised by the lead story in Sunday’s New York Times, which says hundreds of emails and energy industry documents suggest that much of the money being invested in the natural gas rush will be lost.

    The story by Ian Urbina says wells are showing disappointing yields, a fact masked by industry hype.

    “The word in the world of independents is that the shale plays (meaning investments) are just giant Ponzi schemes and the economics just do not work,” a 2009 email from an energy analyst charges, according to the story. The gas boom is being compared to the dot-com boom.

    Ironically, an AP story today gives exactly the opposite view of shale drilling potential, at least in Pennsylvania.

    If the Times story is right, I’m not sure what it means, other than that some investors are going to lose a lot of money. It’s hard to imagine why energy companies would keep spending a fortune to drill wells if their data shows they won’t generate enough gas to cover the costs.

    But given the enormous number of wells being drilled in Pennsylvania and the battles raging over taxes and environmental regulations, this bears watching.

    I haven’t seen a lot of reaction yet in Pennsylvania media. My friend Will Bunch has this take in his blog, Attytood. Former Pennsylvania Secretary of Environmental Protection John Hangar posted this.

    And here’s a detailed critique of the Times piece from an energy industry group.

    Also, last week after President Obama’s speech on Afghanistan, I offered my opinion from the cheap seats that this effort is going nowhere, and we should get out as soon as possible. In yesterday’s Times Tom Friedman, whose spend much of his life reporting on the Middle East and national security issues, makes an argument that ends up in the same place.

    Friedman lists eight of the happiest moments in the Middle East in the last few decades and notes that they all had this in common: “America had nothing to do with them.”

    His point was that in Afghanistan like many other places, the U.S. can be helpful to locals who are committed to a positive agenda, but we can’t substitute our will for theirs. Read Friedman’s piece here.

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