I had this sent to me by someone who is involved in some of the legislative issues. I just happen to know them, and I have sent them interesting articles in the past of Fracking. In other words I am not a big mover and shacker in the industry.
One of the points that sometimes comes up when trying to craft legislation is: Why on earth do they want to do this so badly? The price of natural gas right now is very low.
The Big Fracking Bubble: The Scam Behind the Gas Boom
Jeff Goodell, Rolling Stone Magazine, 1 march 2012
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.
Of course because it is Rolling Stone, they are bothered by the presense of a Billionare in the operation. As if a non-Billionaire would have the money to explore for fossil fuels. But I will give credit to Rolling Stone. They do more investigative work than many publications of much larger size and audience.
2 comments:
That kinda makes sense in a way. Every business these days it seems has worked some form of ponzi scheme into there operation.
Yes, a lot of magical thinking all across the board. They still get excited when consumber spending goes up - on borrowed money.
Of course I have always been partial to the observation that the record of the British Eastern Seaboard Colonies/U.S.A is that of one long ponzi land scheme.
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