Shale Gas Enthusiasts believe that shale gas is simultaneously cheap, abundant and profitable thus defying all rules of business and economics. That is magical thinking. The recently released EIA Annual Energy Outlook 2016 sparkles with pixie dust as it forecasts almost unlimited gas supply at low prices out to 2040 and beyond. Exuberant press reports herald a new era of LNG exports that will change the geopolitical balance of the world and make America great again. But U.S. shale gas production is declining because of low prices and shale gas companies are in deep financial trouble because in the real world, price and cost matter. That is not magical. First Quarter 2016 Financial Performance The financial performance of shale gas-weighted E&P companies in the first quarter of 2016 was a disaster. Chesapeake Energy, the biggest shale gas producer in the world, had negative cash from operations. That means that […]