How Sustainable Is Shale Gas?

Solid Shale speculates that the pressure for drilling for shale gas in New York is going down because the promise of shale gas may be overhyped:

Instead, I speculate that evidence is piling up in the courts, in Washington, and on Wall St., that changes the calculus markedly.  Here are some ideas about what evidence may be behind a slightly different trim to the sails of the ship of state:
– Chesapeake Energy’s business model is being questioned… by, among others, its own stockholders, some of whom have brought suit.  Fortune has run a number of articles on this, and there are some damning quotes directly from Aubrey McClendon that seem to prove that flipping leases has been a more important component of the plan than selling natural gas.  There is a wider understanding, also, of the “drilling treadmill” that Deborah Rogers discusses in Energy Policy Forum. This line of evidence is very well substantiated by the behavior of the gas drillers in the face of record low prices.  A Saudi Prince, who does not need the money, judiciously stops production when the price tanks.  Continued development in the face of gas prices in the cellar suggests that the confidence in the gas asset in the ground may not be as high as it once was…. and/or that debt service is driving drilling new wells, which then require debt service…
– This squares very nicely with the study from the USGS, indicating that gas in the ground has been massively over-estimated, meaning that in-ground natural gas assets (which the SEC indulgently allows gas companies to estimate for themselves with no oversight) are vastly over-valued.

I always thought that Chesapeake might have been running a pump and dump with their gas leases in the Marcellus and Utica shales. I also didn't believe the 100 year supply hype.  I may be wrong, but we'll see.