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The frackers are fighting back with the Best Propaganda Money Can Buy

Sometimes the Business page is the best place to get an honest and transparent portrayal of US political economy, priorities, and politics.

Sunday’s NY Times business page article on fracking is a perfect example of that: China Challenges U.S. Supremacy in Shale Gas

That story is so chock full of warped ideas about politics and economics, that I thought I’d discuss it and use it as an example.

But even more important, given the context, is the function of this story as industry propaganda and deep perception management.

So, first, let’s set the context for the story and then expose some of the warped ideas in that story.

I) Increasingly Hostile Context Leads to Existential Threat Level

Of course, there is a growing and aggressive grassroots campaign against fracking. That movement is fueled by investigative alternative journalism coverage of the industry (e.g. Propublica) and independent film expose (e.g “Gasland“).

On the regulatory front, there is a pending US EPA study, legislation in Congress, and previously lapdog State agencies are getting more aggressive in monitoring industry practices.

But none of this is perceived as an existential threat by the gas industry.

The Obama Administration already supports fracking; the EPA is intimidated; the Tea Party Congress will block any new legislation; and, if push comes to shove, weak State regulators will stand down to local economics and powerful industry lobbyists who dominate State Capitols.

From the industry’s perspective, Propublica is a gnat and environmental activists can be ignored, particularly in a deep recession and a friendly Obama administration.

But when the NY Times jumps on the bandwagon and runs an investigative series on page one, that does tend to change the dynamics.

The Times has run several page one stories that are highly critical of the fracking industry (see: Drilling Down)

The Times’ stories raise serious questions about the use of Enron-like methods of estimating gas reserves and whether the industry is driven by Ponzi scheme financing.

This occurred during a period that the NY State Attorney General issued subpoena’s, while the USGS reduced estimates of Marcellus gas reserves by 80%, and the stock of Chesapeake Energy – the fracking industry leader – was put on a price watch-list .

Well, it looks like there are now existential threats – which obviously must have spurred far greater industry responses, particularly in the form of public relations and lobbying.

So now lets see if we can find any evidence of that.

II) Industry Uses The NY Times Business Page to Propagate Perception Management Strategies

For some of that evidence, let’s proceed to some of the warped ideas in the NY Times story (while noting the irony that a Reuters pro-industry story is running in the Times, a major source of the industry’s threats. There must be some war going on inside the Times these days!).

Start with the headline –China Challenges US Supremacy in Shale Gas

This elevates the issue way beyond energy and economic policy, to the rarefied arena of US prestige.

If the gas industry has its way, fracking will now be viewed as a component of US China power relations.

In a similar vein, industry spinmeisters would love to frame fracking as a current version of the post Sputnik space race, or the US v. Russian cold war arms race. The Times story sets up that frame.

We then move on to the story lede.

In one powerful sentence illustrating rank propaganda, the story targets US democracy and environmental regulations as a “roadblock” to “progress“, US exclusive leadership, and “US Supremacy“.

Note also how the story situates the fracking issue within the ideological struggle of so called free markets versus Communist state control:

China has a chance of challenging the United States for shale supremacy. So far, only the United States has significantly exploited domestic reserves of shale gas. But Sinopec, China’s major state-run oil company, is now taking shale seriously and lacks many of the roadblocks that have held back developers in other countries.

Wow! The 20th Century history of US foreign policy in one sentence!

The shit gets even deeper in the next paragraph.

We now bring in cultural allusions to US technological superiority and US exceptionalism– you see, fracking was “born in the USA”!

We wouldn’t want to emulate those other backward lefty nations like France, where natural resources are publicly owned and equity and environmental protection are paramount.

No, we need to protect private property, promote profits, and emulate progressive nations, like Poland! .

Many nations have energy trapped in their rocks, but shale gas extraction, born in the U.S.A., has all but stayed here. France moved to ban hydraulic fracturing, the contentious drilling technique used to extract energy from shale, earlier this year. In Europe mineral rights often belong to the government, making it difficult for landowners to profit from shale development and thus hardening public opposition. Only in Poland is much progress being made.

It would be difficult to make the ideological agenda driving US policy any more transparent than that!

But, believe it or not, the story manages to do that.

You see, listening to the public and nettlesome regulatory restrictions on drilling are to be avoided at all costs. No, we’ll have none of that sentimental stuff.

Sentimental nonsense like democracy and environmental protection don’t get in the way of our number one competitor China.

No, China ignores public opinion and simply evacuates people! That’s progress. – we wouldn’t want to be “held back”, and certainly not by mere “sentiment”

Let’s do what we need to do to compete and maintain US Superiority and prestige – if fracking pollutes local water, then just move the people the hell away from the water. No problem!

China, however, may be best suited to shale. In New York and New Jersey, authorities have halted drilling in response to public unease, at least temporarily. Such sentiments are unlikely to stand in the way in China, where over 1.2 million people were moved to make way for the Three Gorges Dam.

Do you follow? Gotta compete with and emulate China and be more like Poland on private property rights!

So now lets move on to the economic issues.

Hold on to your wallets, because this story is setting expectations for huge price increases.

Gas price increases can be expected as the result of the fact that estimated gas reserves (supply) were reduced by 80%.

But, gas industry propaganda is designed to prepare the public for and justify those price increases.

Off course steep price increases and skyrocketing profits are fine with US regulators, because we desperately need the fracking gas for National Security and must compete with China to maintain US Superiority and our Precious Bodily Fluids – USA! – USA! -  USA!:

There is good reason to develop shale, too. About 71 percent of China’s power comes from coal, creating an acute need for lower-carbon sources of energy. And while the low price of natural gas may slow drilling in the United States over the coming year, China’s state oil companies have proved willing to operate at a loss to ensure domestic supply.

Take the long on Chesapeake Energy.

[Update: Formation of a NJ industry pro-gas Coalition is further evidence that the frackers are fighting back! See NJ Spotlight: Big Business Bands Together to Boost Natural Gas – Newly formed coalition hopes to combat conservationists’ strong opposition to fracking and fossil fuels