The Big Fracking Bubble: The Scam Behind the Gas Boom

[salvorhardin]

Fantastic article!

According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling. When the wells don't pay off, the firms wind up scrambling to mask their financial troubles with convoluted off-book accounting methods. "This is an industry that is caught in the grip of magical thinking," Berman says. "In fact, when you look at the level of debt some of these companies are carrying, and the questionable value of their gas reserves, there is a lot in common with the subprime mortgage market just before it melted down." Like generations of energy kingpins before him, it would seem, McClendon's primary goal is not to solve America's energy problems, but to build a pipeline directly from your wallet into his.

Full article (~6,200 words): http://www.rollingstone.com/politics/news/the-big-fracking-bubble-the-scam-behind-the-gas-boom-20120301?print=true

[benld74]

1. If it looks like a duck and quacks like a duck ITS A DUCK!!!!!

And it takes Rolling Stone to discover this? Journalism is this day and age SURE has changed since I was a kid!

[truedelphi]

2. It is amazing that RS journalists are the only ones writing the truth.

If you can afford it, subscribe to 'em to let them know how you feel. I noticed their last print issue was really a thin one. Ad revenue is down, I believe.

[Myrina]

3. Lies, damn lies, statistics AND accounting!!!

Numbers can be manipulated. Are people (investors, legislators, buyers, etc) really so naive they don't realize that?

Ask Ken Lay.

[supernova]

4. Thank you for this

I discovered a link between Chesapeake Energy and the new Fracking Bill sitting in the NC legislature as I type...

Facing South from Last November:

http://www.southernstudies.org/2011/11/nc-lawmakers-take-a-one-sided-look-at-fracking.html