U.S. Fracking Industry Shocked By Death Of Pioneer Aubrey McClendon
DAVID GREENE, HOST:
We're going to hear now about a pioneer in this country's energy industry. Aubrey McClendon was the former head of Chesapeake Energy. He died yesterday after driving his car into a concrete embankment in Oklahoma City. He had been indicted just the day before for allegedly violating federal antitrust law. We spoke with someone who followed his career - Wall Street Journal's senior energy reporter Russell Gold. Thanks for joining us.
RUSSELL GOLD: Thanks for having me.
GREENE: So who was Aubrey McClendon?
GOLD: Aubrey McClendon really was a salesman. Most of the people in the oil industry, most of the executives are petroleum engineers or perhaps accountants, but not Aubrey McClendon. He was what was called a landman. He started off his career knocking on doors and convincing people to sign leases to allow companies to drill. And what that really meant was - is that he had to sit down and sell a dream to landowners, a dream that they were going to get rich if you let them come and drill some wells. And he did it really well.
GREENE: How responsible was he for bringing us fracking, which is this new way of energy - controversial but also, you know, such an impact on the American economy?
GREENE: Well, you know, he didn't invent fracking. But he was one of the first to embrace it. And when he embraced it, when Chesapeake embraced it, they sped up the entire industry. I mean, this was a really sleepy industry 10 years ago - domestic oil and gas production. And he came in and just started drilling well after well after well and fracking each one. And something kind of remarkable happened. I mean, the United States went from being a huge energy importer to being an energy exporter. So it's a sea change.
GREENE: So a sea change - he was also called America's most reckless billionaire by Forbes Magazine. How did he get that reputation?
GOLD: You know, in Las Vegas they call big gamblers whales. Aubrey McClendon was a whale in energy. You know, he started Chesapeake tried as sort of a two-man partnership in 1989. He built it up and then drove it very close to bankruptcy. Then he brought it all the way back and created this billion-dollar company between 2004 and 2011 drilled more wells than any other company in the world. And then he pretty much wrecked that, too. He did everything to an extreme.
GREENE: And does doing everything to an extreme explain why he was indicted this week, or what exactly was he charged with?
GOLD: Well, the indictment comes back to this first step in the oil and gas exploration process, which is paying landowners for their land. And what the indictment involved was that he colluded with another company to basically say look, we're not going to compete against each other to pay for leases. So ultimately, that really was just going to affect how much landowners got for their mineral rights.
GREENE: And I guess there - you know, we don't know everything about his death. But there's speculation that he took his own life after this indictment came down.
GOLD: Right. Well, I mean, if you listen to what the Oklahoma City Police said, he drove his Chevy Tahoe directly into an embankment. He had been indicted, so clearly his world was under incredible pressure.
GREENE: But I suppose, I mean, this is an industry where risk-taking has often meant having to run afoul of the law?
GOLD: There is a history obviously of pushing limits in this industry. And maybe it's going to turn out that he broke the law as part of that. But to me, what's fascinating is that I'm not even sure he needed to do that. You know, he had captured lightning in a bottle with fracking. And the growth of oil and gas was so stupendous, he obvious - you know, it's quite possible he cut corners and tried to save money by colluding with other companies. But, you know, at the end of the day, I'm not even sure he had to.
GREENE: All right, we've been speaking with Russell Gold. He's the senior energy reporter for the Wall Street Journal and also author of "The Boom: How Fracking Ignited The American Energy Revolution And Changed The World." Russell, thanks a lot.
GOLD: Thank you very much.
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