Chesapeake Energy Corp. Chief Executive Officer Aubrey McClendon and his company have been in the local and national news lately.
On Saturday, The New York Times ran a story that cites evidence questioning whether gas companies have overstated how “easy and cheap” it is to extract from shale formations using hydraulic fracturing. Chesapeake and its drilling in the Barnett shale formation in Fort Worth are mentioned prominently in the story. Later, McClendon, pictured right, criticized the article.
Last week, the Oklahoma Gazette ran a story outlining how McClendon was able to overcome a recommendation from an advisory firm that he not be retained as chairman of CEO’s board by the company’s shareholders. The story mentioned the advisory firm, Institutional Shareholder Services Proxy Advisory Services, also recommended that former U.S. Sen. Don Nickles not be retained on the board. The Gazette article also noted the paucity in coverage on McClendon’s board issue in The Oklahoman when compared to other media outlets.
Each story speaks for itself, but here are two observations:
(1) Undoubtedly, oil and gas drilling methods have improved with technology and reduced risk over the years, but there will always be some element of uncertainty, especially when fluctuating prices that determine profit are factored into the business equation.
(2) The stories show that Oklahoma needs to continue to diversify its economy. Chesapeake is obviously a major employer in Oklahoma and contributes heavily to the economy. I don’t necessarily see that ending anytime soon, but what about 25 or 50 years from now? The state’s major reliance on the oil and gas industry to fuel its economy will eventually become outdated as new and improved technologies emerge using renewable energy sources.
Unfortunately, a major player in the corporate media here, The Oklahoman, sees it as just the opposite. A Tuesday editorial (“Oil, gas extraction pushes Oklahoma income growth,” June 28, 2011) points out the importance of agriculture here but notes how “every Oklahoman” ought to essentially give up common sense concerns about the environment and energy sustainability to get behind Big Energy:
… Every Oklahoman ought to be concerned about the anti-fossil fuel movement, from the attack on hydraulic fracturing to the assailable claims that renewable energy will soon run the world.
What runs this state (and indeed runs agribusiness) is petroleum. Be glad we have so much of it.
That’s the prevailing line from the corporate power structure here; it remains short-sighted and unbelievably dogmatic.