SEC Loosening of Rule Let Natural Gas Firms Recalculate Reserves, Potential Profits

Capitalism is like a shark in that it has to keep moving forward or it dies. First we had the dot.com bubble, then the housing bubble, now, because it needs a never-ending flow of capital flushing over its gills, they are creating a green-washed natural gas bubble.

Previously, companies were allowed to count gas only from areas close to their active wells as part of their “proved” reserves, the amount of gas that a company estimates to investors it will tap. This was meant to prevent companies from claiming reserves of gas based largely on guesswork.

After the rule change, companies were allowed to include gas located farther from producing wells in their reserves estimates, using modeling methods to predict how much gas could be produced from these yet-untapped areas. But the S.E.C. said that the companies, for reasons of trade secrecy, did not have to disclose precise details about the technology they used to estimate reserve sizes. Though the commission considered requiring third-party audits to verify the reserve estimates, the idea was dropped in the end.

Here we go again.

http://www.propublica.org/blog/item/sec-loosening-of-rule-let-natural-gas-firms-recalculate-reserves-profits