Aubrey McClendon's response to "misleading" New York Times article
Administrator's Note: This email was sent to all Chesapeake employees from CEO Aubrey McClendon, in response to a Sunday New York Times piece by Ian Urbina entitled "Insiders Sound an Alarm Amid a Natural Gas Rush."
FW: CHK's response to 6.26.11 NYT article on shale gas
From: Aubrey McClendon
Sent: Sunday, June 26, 2011 8:37 PM
To: All Employees
Dear CHK Employees: By now many of you may have read or heard about a story in today’s New York Times (NYT) that questioned the productive capacity and economic quality of U.S. natural gas shale reserves, as well as energy reserve accounting practices used by E&P companies, including Chesapeake. The story is misleading, at best, and is the latest in a series of articles produced by this publication that obviously have an anti-industry bias. We know for a fact that today’s NYT story is the handiwork of the same group of environmental activists who have been the driving force behind the NYT’s ongoing series of negative articles about the use of fracking and its importance to the US natural gas supply growth revolution – which is changing the future of our nation for the better in multiple areas. It is not clear to me exactly what these environmental activists are seeking to offer as their alternative energy plan, but most that I have talked to continue to naively presume that our great country need only rely on wind and solar energy to meet our current and future energy needs. They always seem to forget that wind and solar produce less than 2% of America electricity today and are completely non-economic without ongoing government and ratepayer subsidies.
During the past seven years, Chesapeake has helped create an extremely disruptive and valuable technology in the form of shale gas, and now shale oil is on the way, and hopefully it too will be as disruptive, and will lead to lower oil prices, a stronger economy and fewer foreign military entanglements. Since the shale gas revolution and resulting confirmation of enormous domestic gas reserves, there has been a relatively small group of analysts and geologists who have doubted the future of shale gas. Their doubts have become very convenient to the environmental activists I mentioned earlier. This particular NYT reporter has apparently sought out a few of the doubters to fashion together a negative view of the U.S. natural gas industry. We also believe certain media outlets, especially the once venerable NYT, are being manipulated by those whose environmental or economic interests are being threatened by abundant natural gas supplies. We have seen for example today an email from a leader of a group called the Environmental Working Group who claimed today’s articles as this NYT reporter’s "second great story" (the first one declaring that produced water disposal from shale gas wells was unsafe) and that “we've been working with him for over 8 months. Much more to come. . .”
But I wanted you to know that this reporter’s claim of impending scarcity of natural gas supply contradicts the facts and the scientific extrapolation of those facts by the most sophisticated reservoir engineers and geoscientists in the world. Not just at Chesapeake, but by experts at many of the world’s leading energy companies that have made multi-billion-dollar, long-term investments in U.S. shale gas plays, with us and many other companies. Notable examples of these companies, besides the leading independents such as Chesapeake, Devon, Anadarko, EOG, EnCana, Talisman and others, include these leading global energy giants: Exxon, Shell, BP, Chevron, Conoco, Statoil, BHP, Total, CNOOC, Marathon, BG, KNOC, Reliance, PetroChina, Mitsui, Mitsubishi and ENI, among others. Is it really possible that all of these companies, with a combined market cap of almost $2 trillion, know less about shale gas than a NYT reporter, a few environmental activists and a handful of shale gas doubters? I seriously doubt it and I expect you do as well. (more...)