Historians will mark the first decade of the 21st century as a turning point in the domestic oil and gas industry and the competitiveness of the U.S. economy. Some might simply give credit to the nation's resource base, though the hydrocarbon geology in the United States resembles that in other regions. More astute historians will give credit to leaders who, against the odds, showed how to develop the nation's energy potential. By any measure, Oklahoma City's Aubrey McClendon will be at the forefront of those heroes.
Uncertainty clouded the future of North American natural gas less than a decade ago. Tight supplies and rising prices discouraged the growth in demand. Investors poured billions of dollars into new import terminals. Electricity producers began to use more coal to power the “new economy” of computing and communications. Major oil companies looked abroad for new gas supplies.
McClendon, with the confidence of an Old Testament prophet, described a bright future for domestic natural gas. There were many skeptics. For decades, various forecasters had said U.S. gas production had peaked. In the 1970s, I remember fighting gas pipelines and petrochemical consumers who had supported federal price controls and rationing of “scarce” gas supplies. By 2005, soaring prices and declining drilling productivity in the United States and Canada gave pause even to industry leaders. In plain English, now we know: McClendon was right and the skeptics were wrong.
Chesapeake Energy Corp., led by McClendon, has generated hundreds of billions in domestic investment. This privately funded “economic stimulus” includes new boom towns, pipeline networks, rising petrochemical production and massive investments by other producers who did not want to be left behind.
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