Aubrey McClendon isn’t one to stay out of a public relations fight, and he jumped into the ring this week following another damning report about the natural gas industry. McClendon is the CEO of natural gas giant Chesapeake Energy, one of the companies leading the charge for what he calls “the shale gas revolution.” But this week McClendon is playing defense after the natural gas industry was essentially accused of “cooking the books” about the amount of shale gas it says is available in the United States.
The New York Times' Ian Urbina reported recently that emails from natural gas industry insiders, state geologists, and market analysts reveal that there is sincere “skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves.” Another email from an analyst from HIS Drilling Data, an energy research company, said, “The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work.”
This revelation could be particularly damning to the natural gas industry because the economy of natural gas production is the biggest weapon the industry's arsenal. Shale gas has been called a job creator, pegged as a savior to the economically depressed parts of north central Pennsylvania, Colorado and other parts of the West. These economic claims have often trumped the environmental concerns associated with shale gas, which can only be produced through a process known as hydraulic fracturing, or fracking. That process has come under fire for several environmental reasons ranging from water contamination and air pollution to radioactivity poisoning and flammable drinking water. Still, the purported overabundance of what has been dubbed a clean, domestic and affordable energy source has put natural gas companies like Chesapeake in the driver’s seat when it comes to pushing for more development. Take overabundance out of that conversation, and the natural gas industry is in a tough spot.
Enter McClendon, who clearly has a stake in defending his industry. On CNBC’s "Mad Money with Jim Cramer," McClendon played defense by going on the offense. His first target, the New York Times and Urbina. McClendon said the newspaper has been "captured by environmental extremists,” and said Urbina appears to “have no editor” at the paper.
As for Urbina’s report that the natural gas industry is engaged in some sort of Ponzi scheme to overstate the amount of natural gas available, McClendon attacked that claim. "It's ludicrous. We think we are absolutely understating the amount of gas because all we can really talk about publicly is the amount of proved reserves we have and they are dwarfed by the unproven reserves; the reserves we'll be developing for decades to come.” Before moving on to the rest of the interview, McClendon added, "Every part of the market, every bit of science is out there that says that we're at the very beginning of the shale gas revolution.”
To see the full McClendon interview, take a look at the video below. This is a new and interesting twist into the debate about how natural gas is supposed to fit in America's energy future.