DUG East

As Risky Finances Alienate Investors, Fracking Companies Look to Retirement Funds for Cash

Read time: 9 mins
Older adults on a beach bench

A year ago, Chesapeake Energy, at one time the nation’s largest natural gas producer, announced it was selling off its Ohio Utica shale drilling rights in a $2 billion deal with a little-known private company based in Houston, Texas, Encino Acquisition Partners.

For Chesapeake, the deal offered a way to pay off some of its debts, incurred as its former CEO, “Shale King” Aubrey McClendon, led Chesapeake on a disastrous shale drilling spree. Shares of Chesapeake Energy, which in the early days of the fracking boom traded in the $20 to $30 a share range, are now valued at a little more than $1.50.

Encino has marketed itself as a stable source of long-term returns (something the industry overall has struggled so far to create), attracting the managers of one of the world's largest pension funds to drill and frack the land that Chesapeake sold off to repay its enormous debts from fracking nationwide.

‘We Can't Sit on the Sidelines and Be Climate Deniers,’ Dominion VP Warns Natural Gas Industry

Read time: 11 mins
Donald Raikes at DUG East

Donald Raikes arrived at 2019’s DUG East conference, a major shale gas industry gathering in Pittsburgh, with a mixed set of messages for his fellow fossil energy officials.

We are faced with a lot of challenges in this industry,” Raikes, senior vice president of gas infrastructure at Dominion Energy, said. “And this morning what I plan to do is use my time to carve out a call for action for all of us. We need to be very aware of the forces that are out there and how they are coming against us.”

What sorts of forces? Raikes warned specifically about opposition from environmental groups.

But Raikes also warned that the oil and gas industry was doing itself no favors by denying that it affects the environment, and he even dipped his toes into the issue of climate science denial.

George W. Bush on Keystone XL: "Build the Damn Thing"

Read time: 7 mins

Make private companies happy. Don’t worry about the environment. Stop fretting about long-term sustainability. Forget renewables, property concerns, the safety of our water and air. Make private companies happy.

This was the 43rd president's message to the current administration at the DUG East conference held by the shale gas industry on Thursday.

With characteristic bluntness, George W. Bush spoke his mind on energy policy to several thousand oil and gas executives gathered in Pittsburgh at an exclusive luncheon on Wednesday.

“I think the goal of the country ought to be 'how do we grow the private sector?'” Mr. Bush said. “That ought to be the laser-focus of any administration. And therefore, once that’s the goal, an issue like Keystone pipeline becomes a no-brainer.”

“If private sector growth is the goal and Keystone pipeline creates 20,000 new private sector jobs, build the damn thing,” Mr. Bush said, prompting a burst of applause from the more than 4,000 oil and gas executives attending the conference.

In his candor, Mr. Bush also highlighted the essence of what burns bright but short in the fossil-fuel doctrine.

In emphasizing a get-it-now, don’t-worry-about-the-future approach to energy, he drove home why the Keystone XL pipeline has become such a lightning rod issue. The reason: it is symbolic of the overall short-sightedness of increasing our long-term addiction to oil rather than pushing with urgency toward renewable energy.

Pennsylvania's Top Environmental Regulator Champions Drilling Industry at Shale Conference

Read time: 6 mins

When Pennsylvania Department of Environmental Protection Secretary Michael Krancer stepped to the mic at a shale oil and gas conference earlier this month, he offered one of his most candid descriptions to date of how he sees his mission as a regulator. His job, he said, is to protect the state not from the potential misdeeds of drillers but from those of the EPA.

EPA has completely lost its concept of the rule of law,” Mr. Krancer charged, adding that he would remain watchful against any effort by the federal government to usurp state authority over hydraulic fracturing.

It was a small window into the mind of the top environmental regulator in a state now famous as ground zero of the current drilling boom, where the shale industry has enjoyed a virtually unprecedented bonanza.

Mr. Krancer described how foolhardy he thought it was to assume that the industry needed policing.

We’ve been doing this safely in the United States for years and years and years,” he said with regards to hydraulic fracturing (fracking).

Along these lines, he dared his listeners to walk up to any American rigworker and to look that worker in the eye and tell say to his or her face that they shouldn’t be trusted to do their job safely.

Actually, I don’t recommend that you do take that challenge,” he added, to knowing chuckles from the audience of shale gas industry representatives.

So Wrong, So Often: Karl Rove Grasps For Audience Approval at Oil & Gas Summit

Read time: 6 mins

When the shale gas industry met last week in Pittsburgh, none other than Karl Rove gave the keynote speech, regaling the audience with a lengthy patriotic anecdote comparing the fossil fuel dillers to the US Navy Seals who killed Osama Bin Laden.

Having recently attended a quail hunt fundraiser with some of those Navy Seals, Rove described the tenacity of one Seal who had been wounded sixteen times on a mission in Iraq but courageously improvised his own medical evacuation despite his severe injuries. Rove then told the assembled drillers that their industry was serving the nation and overcoming adversity in much the same way as that soldier.

You overcome the physical difficulties of drilling thousands of feet under the surface for hydrocarbons,” he told over a thousand oil and gas executives as they dined on artichoke-crusted chicken. Invoking the wounded American soldier, Rove added: “He’s overcoming it by finding a way, after serving in this ghastly way like that, to serve something bigger than himself.”

It was quintessential Karl Rove. It was also the crowning moment of a rousing speech from a man who, over the past month has been pilloried for being so wrong, so often.

Subscribe to DUG East