Oil/Gas production: Harebrained headlines, or why the whole world is confused by energy information

Nothing to do with rig counts per se, just a pretty Christmas picture to get your mind of rig count issues

Nothing to do with rig counts per se, just a pretty Christmas picture to get your mind of rig count issues

If you read business websites and/or have any interest in petroleum (and who wouldn’t), you may notice headlines like this one from an energy patch publication called The Daily Oil Bulletin on Nov 14, 2014: U.S. Natgas Rig Count fell 6 at 350 – Baker Hughes . In itself, that’s a pretty cryptic message: who is Baker Hughes? Why say “natgas”, isn’t there enough confusion out there with CNG (compressed natural gas), LNG (liquefied natural gas), not to mention CBM (coal bed methane)…these are all the same thing, natural gas (or methane, the proper name for it). And don’t even get me started on NGLs (natural gas liquids – propane, butane, etc.), a whole other story.

What makes the headline particularly irksome is that it totally contradicts the important message of the article, which is less than 60 words long! That has to be some sort of weird record.

Here’s the entire article:

“The number of rigs drilling for natural gas in the United States fell by six this week to 350, data from oil services firm Baker Hughes showed on Friday.

Horizontal rigs — the type most often used to extract oil or gas from shale — rose by seven to 1,369.

Oil rigs rose by 10 to 1,578.”

So what’s wrong with that? Well, the US has enjoyed a tremendous increase in natural gas production recently through the use of multi-stage fracking and horizontal well drilling. These newish technologies have rewritten the books on how to extract natural gas, because this type of drilling has unlocked a lot of gas that was previously inaccessible by conventional vertical wells. Yay for everyone, cheap natural gas.

So the article’s headline is totally misleading, because in a measly 56 words the message gets completely distorted. The headline makes it sound like there is less of an effort to find natural gas; reading just the headline you’d conclude that less drilling is going on for the stuff. But almost all new production comes from horizontal drilling, which is covered in less-than-substantial depth in the article “Horizontal rigs – the type most often used to extract oil or gas from shale – rose by seven…” So there are actually more rigs looking for natural gas, not fewer, and the ones that are looking for gas are the most prolific, as opposed to the silly little vertical rigs as described in the headline, which bring on a fraction of the gas that horizontal wells do.

In other words, the relevant message in the article is totally at odds with the headline. And this is from an energy industry trade journal; the Reuters story it was based on was not much better but at least didn’t have a totally contradictory headline.

Anyway, that’s why this site is here, looking out for you and trying to make sense of crazy headlines. There is no shortage of them! Send them in to me if you see one, or if you see one that is totally perplexing. I gather them like a squirrel gathers acorns.

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