Ponzi Gas?

The New York Times publishes a story today with some evidence that the natural gas fracking rush is a giant and corrupt financial bubble in the making -- with risks of doing enormous damage to investors and the economy, and at the same time leaving behind enormous environmental damage in unproductive and abandoned wells. Is this a Ponzi scheme?

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company, wrote in an e-mail on Aug. 28, 2009.

Get-rich-quick mining and drilling schemes have been a feature of American life for a couple of centuries at least -- are we at it again?

Ian Urbina, "Insiders Sound an Alarm Amid a Natural Gas Rush," New York Times, 26 June 2011.