I remember the 2009 press conference really well. My wife and her three siblings have 320 acres of Louisiana farm land that they hold dear, and they were curious what this Haynesville Shale might possibly mean for their farm, their Louisiana kin and the region in general — and all we needed was for Aubrey McClendon to tell us the good news. He didn’t fail them.
In stark contrast to the good news delivered that day came the news on March 2nd that Mr. McClendon was killed in a car accident outside of Oklahoma City. Speed likely was a factor in his death. Police say it appears that his 2013 Chevy Tahoe drove “straight into a wall” and burst into flames. McClendon likely died instantly. The crash occurred less than 24 hours after a federal grand jury indicted McClendon for allegedly rigging oil and natural gas leases. He denied the antitrust charges, saying “Anyone who knows me, my business record and the industry in which I have worked for 35 years, knows that I could not be guilty.” He added, “All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans.”
I met McClendon several years ago during a Marcellus Shale event in Pittsburgh. I found him to be charismatic and hard-driving, an uber-entrepreneur who saw the potential of the advanced technologies transforming the energy industry. Coming from the mineral owner community, I wasn’t sure how I’d be received, but upon introducing myself, he exclaimed enthusiastically, “You’re that dude!” As I walked away from the friendly exchange, my joy for the recognition gave way to a slight uneasiness that CEO McClendon knew about “a dude” who had a website. Then, that gave way to wonderment that he had the capability and desire to see the industry from bottom to top.
At age 56, McClendon was a titan in the oil and gas industry. In 1989, he and his friend Tom Ward started Chesapeake Energy in Oklahoma City with $50,000, and turned it into a multi-billion dollar powerhouse. Brash and aggressive, he was a visionary who recognized the promise of hydraulic fracturing and moved quickly to buy up mineral rights leases in shale formations.
Under his leadership as CEO, Chesapeake became one of the largest independent natural gas producers in the country. But McClendon also took risks. At one point he invested some of his personal wealth in Chesapeake wells and used them as collateral for $1.1 billion in loans for drilling.
The move was questionable, but McClendon’s impact on U.S. energy supplies was nothing short of remarkable. Chesapeake and a small number of similar companies turned America’s energy deficit into an abundance of oil and natural gas. Today the United States is the largest oil and gas producer on the planet.
McClendon, and other wildcatters like him, are responsible for America’s energy bounty, along with all of the mineral owners who signed leases to allow drilling. Millions of royalty owners, as they are called, are benefitting from the “shale gale” by receiving payments for the oil and gas being produced on their private lands. They have told me — the publisher of GoMarcellusShale.com and GoHaynesvilleShale.com — the stipends have helped them pay their bills, pay off college loans, and grow their families.
With that said, in the community where I come from, the mineral owner community, opinions of McClendon remain mixed at best—many feel taken advantage of by business practices that began under his leadership at Chesapeake. As the price of natural gas and oil dropped, royalty check deductions became burdensome despite the fact that many landowners had contract clauses prohibiting the practice. Royalty owners of all sizes have filed suit against Chesapeake alleging this practice violates their contracts. To this day, Chesapeake continues to fight these allegations and related lawsuits. My hope remains that Chesapeake corrects its practices and makes decisions that will make royalty owners financially whole. The verdict is still out on whether this will happen.
Professionally speaking, I was saddened by McClendon’s growing absence from the public energy debate. He was a tremendous communicator and salesman for shale and it’s potential — the heir apparent to T. Boone Pickens. But, as the controversies mounted and the clouds darkened, he moved away from the spotlight to take on less visible roles.
It’s still unclear just how history will remember Aubrey McClendon but one thing is clear. He was a savvy entrepreneur who helped America transition from energy dependence toward energy independence. For that, we are grateful. My prayers and condolences go out to his family and friends.