McClendon was not only the founder of Chesapeake Energy, the most important fracking company in the technique’s history, but he also co-founded one of the gas industry’s most important lobbying arms, America’s Natural Gas Alliance. In creating both, McClendon became an architect of the energy market’s reorientation around a product whose climate-warming emissions rival those of coal.
“His desire for ‘more’ … was the driving force in the rapid development of U.S. shale resources,” Wall Street Journal reporter Russell Gold wrote in his book, The Boom. “McClendon wasn’t a mere participant in the great shale land grab. He created it.”
McClendon and a friend launched Chesapeake in 1989, and their competitive edge always lay in the company’s ability to buy up acreage quickly and cheaply. In 2011, Chesapeake deployed 4,500 land scouts across the U.S. and at one point controlled the leases on 15 million acres, an area the size of West Virginia. Mutilated landscapes in Oklahoma, Texas, Michigan, Ohio, and Pennsylvania will long bear his fingerprints.
In order to get the most favorable deals possible and to earn an edge over coal in energy production, McClendon eventually began buying politicians and manipulating public opinion. In 2007, he funded an organization called the Clean Sky Coalition, running ads that railed against dirty coal in Texas and — under the name Know Your Power — against coal projects in Oklahoma and Kansas. A year later, he launched another industry front group, the Clean Skies Foundation, “to be a kind of Heritage Foundation for energy and the environment,” in the words of the foundation’s first CEO, Denise Bode.
McClendon also co-founded America’s Natural Gas Alliance, a lobby group that represents natural gas producers and has helped push some of the last decade’s most important fracking-friendly regulations. In 2009, according to the Dallas Morning News, the organization launched an $80 million campaign to oppose oil and gas taxes and a bill to regulate fracking. More recently, ANGA spent $230,000 in the last quarter of 2015 lobbying for the inclusion of natural gas interests in the Toxic Substances Control Act, the Clean Power Plan, and the EPA’s controversial study on the impact of fracking on drinking water, among other issues.
Fracking’s No. 1 Pitchman
“I am not ashamed whatsoever to be the No. 1 pitchman for my product,” McClendon told ClimateWire in 2008. “I believe in it with my heart and soul.”
Convincing the Sierra Club to believe in it, too, was one of his greatest public relations coups. Between 2007 and 2010, the organization collected $26 million dollars from the gas industry, most of it reportedly from McClendon. He and Sierra Club director Carl Pope at times traveled side by side to promote natural gas’s disputed environmental benefits. The Sierra Club later broke ties with the gas industry and now runs a campaign called “Beyond Natural Gas,” which argues that “total greenhouse gas emissions from natural gas are nearly identical to coal.”
McClendon largely succeeded in his war on coal, but his campaign generated blowback as well. Coal plants have closed all across the United States, cracking open new markets for natural gas, but fracking has become synonymous with environmental crime: earthquakes, bad air, and fouled water.
Recent studies indicate that the Environmental Protection Agency has massively underestimated the volume of methane that billows invisibly from gas facilities. In December, a study published in Proceedings of the National Academy of Sciences, carried out by the Environmental Defense Fund, showed that methane emissions in Texas’ Barnett Shale are likely double what the EPA thought. Although methane doesn’t stay in the atmosphere as long as carbon dioxide, over 20 years it has 84 times the climate warming potential.
Meanwhile, a gas supply glut has led to a dramatic drop in prices, forcing many producers into bankruptcy. Chesapeake itself has staggered under the weight of its debts.
McClendon, of course, had already left the company when he died, forced out by the revelations of an important Reuters investigation published in 2012. His financial improprieties extended far beyond the Justice Department’s charges. McClendon spent hundreds of thousands of dollars of Chesapeake money to fly his friends and family to exotic locales on the company plane. He borrowed $1.1 billion from the company, using his stake in production as collateral. He operated a hedge fund that traded the same type of commodities that Chesapeake sold, raising conflict of interest questions. And, Reuters reported, he appeared to have engaged in bid-rigging by colluding with another gas company over leasing offers to avoid the higher prices that come with competition.
In response to the indictment, McClendon said, “I have been singled out as the only person in the oil and gas industry in over 110 years since the Sherman Act became law to have been accused of this crime in relation to joint bidding on leasehold,” adding, “I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name.” The charges were dropped two days after his death, but a wider investigation into bid-rigging in the oil and gas industry continues.
Author: Alleen Brown