McClendon to business journalists: ‘Get the real story’

Posted By Eric Tsetsi

Barrett Goldsmith
Houston Business Journal

Aubrey McClendon, Chesapeake Energy. Photo by Stuart Palley.

The head of America’s largest independent natural gas producer implored business journalists April 8 to “get the real story” on hydraulic fracturing rather than focusing on water-pollution issues that he said were non-existent.

Speaking to attendees of the Society of American Business Editors and Writers at Southern Methodist University in Dallas, Chesapeake Energy Corp. CEO Aubrey McClendon said that a spate of recent media investigations into so-called “fracking” have failed to yield anything approaching a legitimate concern.

“Try not to be the 51st person to write a story about the alleged contamination of somebody’s water well from fracking,” McClendon said. “There are issues with drilling wells, but they don’t come from fracking. People get upset about truck traffic in rural areas or what happens to produced water when it comes to the surface. Do yourself a favor and realize that frack fluid is not coming to the surface in an uncontrolled fashion

“At 7,000 to 12,000 feet, we simply can’t create pathways for those liquids to get to the surface. We can tear up a road, we can be noisy, we can create dust, we can hurt somebody, and sometimes there is a lack of transparency about operations. All those are legitimate concerns, but fracking is not the story.”

Chesapeake (NYSE: CHK), though classified in the industry as an “independent” — not affiliated with “supermajors” like ExxonMobil Corp., Chevron Corp. or ConocoPhillips Co. — is the nation’s biggest player in the “shale gale,” active in all of the major plays from the Eagle Ford in South Texas to the Marcellus in Pennsylvania to the Bakken in North Dakota. The company chalked up revenues of about $9.4 billion in 2010 and enjoys a market cap of about $21.4 billion.

McClendon, who co-founded the company in 1989 at the age of 23, said natural gas is the only “scaleable, affordable alternative” to the world’s addiction to crude oil. He said it could lead to an “industrial renaissance” in the United States, which at an estimated 255 trillion cubic feet has more natural gas reserves than Saudia Arabia has oil.

“This is something that can revolutionize the American economy, reduce unemployment and change the world of geopolitics,” McClendon said in a horse voice. “I hope one day when we’re making decisions about whether to intervene in the internal politics of a Libya or Rwanda or Ivory Coast, our decision won’t be influenced by how much oil they produce.”

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