A word of caution

October 11, 2011

Massive new shale plays are being publicized on almost a weekly basis.   EnerGeoPolitics, of course, believes that there are vast reserves of previously unconventional fossil fuels ready to be brought to market (validating, at least partially, our “technological positivism” post from a few years back).   However, that does not mean that every shale play or investing opportunity that comes to light is a good one.  There could very well be a “Shale Bubble” at the same time that there is a shale explosion – both can occur simultaneously.   I sort through all sorts of news items in the search for my daily post(s), many of them are about new companies getting into shale plays.  Lately, it strikes me that an awful lot of  these companies are making very large claims about the reserves in their blocks.  Some of them strike me as highly optimistic, if not inflated.  I doubt that any serious investor comes to EGP looking for investment information, but if anyone is looking for a bit of free advice:  make sure you do your due diligence before investing.  We have been in a Big Casino investing environment for the last couple of decades, where bubble after bubble gets inflated.   I am a bit worried that we could see that happen among shale companies.



  1. […] I posted a word of caution about a possible bubble in unconventional gas.  I didn’t have any data to back it up, it was […]

  2. […] is the case, though I still warn that there are pitfalls ahead – not the least of which is the increasing possibility of a shale gas bubble that delays the entire enterprise. LD_AddCustomAttr("AdOpt", "1"); LD_AddCustomAttr("Origin", […]

  3. […] a pair of posts last October (here and here), I wondered whether we might be in or approaching a “gas bubble” due to the […]

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