Marcellus is a gas (lease) bubble that will burst

DOE slashes gas estimate for Marcellus Shale

On Monday, Chesapeake Energy announced it would respond to "the lowest natural gas prices in the past 10 years" by cutting production and reducing the number of active drilling rigs in "dry gas" areas, including parts of the Marcellus Shale in northeastern Pennsylvania. Chesapeake also said it would cut expenditures on new gas leases from $3.4 billion in 2011 to about $1.4 billion this year, and focus that spending on "liquid-rich plays."

John Michael Greer at the Archdruid Report:

Thus it’s as certain as anything can be that at some point in the fairly near future, probably though not certainly within a year or two, the shale gas bubble is going to pop, major names in the industry are going to go the way of Countrywide Mortgage and Washington Mutual, and gas drilling is going to slump until rising gas prices and declining budgets for exploration and drilling come back into a relationship that makes sense. Mind you, it’s equally certain that the closer we get to the bubble’s end, the more extravagant will be the claims made for the permanence and game-changing nature of the so-called “shale gas revolution,” and the more abusive will be the responses of those whose jobs depend on the bubble to any suggestion that a bubble is in fact what’s going on.

James Howard Kunstler

the manias over shale oil and shale gas will reveal themselves as just more bubbles in a long cavalcade of bubbles, and both will begin to founder on a shortage of investment capital. The shale plays will prove to have been a national self-esteem-building program, not any part of an energy policy.