PULSE: Greg Zuckerman of the WSJ Examines the Impact of Aubrey McClendon on the Energy Industry

NEW YORK - March 15, 2016 - PRLog -- It's been two weeks since former Chesapeake Energy CEO and fracking pioneer, Aubrey McClendon died after crashing into a highway overpass in Oklahoma City.  With the controversial events of his death still under investigation stemming from a recent grand jury indictment, Greg Zuckerman, Special Writer for The Wall Street Journal and author of "The Frackers", joins Asset TV via Skype to talk about Aubrey McClendon and the enormous effect he has had on the energy industry.

As Greg Zuckerman explains, Aubrey McClendon came into prominence around 2001/2002, when the United States was desperate for oil and gas and dependent on countries like Saudi Arabia, Iran, and Venezuela - countries that the US did not want to be dependent on.  In response, Aubrey McClendon and other select individuals championed the idea of extracting natural gas and oil from shale.   While experts always knew gas and oil was plentiful in shale, the process of extraction had widely been considered too expensive and difficult to make it a viable option.  However, thanks to Aubrey and his cohorts, the extraction method that has come to be known as "fracking" was introduced, making the process easier and more affordable within the US.   This allowed the US production of oil to rise from about 6 million barrels per day to about 9 ½ million barrels at its peak about a year or so ago.

However, as a result of the increased production, a lot of pressure was put on the Saudis, as they were losing market share.  While the 50% increase in oil production in the US may not seem that much on the grand scale, it was the tipping point for the Saudis who were already facing competition from the Iranians, ISIS, the Russians, off-shore drilling, etc.  In response, the Saudis over-flooded the market with oil production in an attempt to cripple the other production companies.  As Greg Zuckerman explains, "While it's hard to get inside the heads of the Saudi leaders, I would argue that they have a lot of agendas. One is to cripple the frackers, but they have a lot of enemies:  The Iranians, ISIS [which] relies on oil sales, the Russians…they have a lot of reasons to expand production and to try to get prices low enough to cripple these guys.  That said, I don't know how long it can last. The Saudi Arabian economy is getting hurt itself.  I would argue that another year or so of these really low prices, and then at some point they're going to have to throw in the towel."

While fracking has allowed the US to rely less on Saudi Arabia and other countries, controversy has surrounded not only the practice itself due to environmental concerns, but Aubrey and his cohorts as well.  They had the reputation of "playing it fast and loose" when it came to business practices and just one day prior to his death, Aubrey was indicted by the Department of Justice for rigging bids for oil and natural gases and colluding with another company while CEO of Chesapeake Energy, ultimately leading to the indictment for violating anti-trust laws.   This has led many to speculate that the car accident was in fact, not an accident at all.

While Aubrey McClendon's business ethics and the particulars surrounding the crash that killed him may be questionable, it's hard to deny the impact he has had on the energy industry.   As US oil majors like Exxon Mobil long dismissed shale as an impractical resource, effectively "giving up on America" and turning to off-shore drilling locations, they are now forced to play catch-up with the smaller companies who believed in Aubrey's vision.

To watch this full interview with author Greg Zuckerman as well as other interviews with leading financial advisors, tune into Asset TV's Pulse Channel Page:  http://bit.ly/1S28DEK


About

Asset TV is the investment professional video platform for research and education.

Over 2,500 video reports are available to watch on-demand, currently accessed by a global audience of 400,000 Financial Advisors, Institutions, Consultants, Plan Sponsors, Endowments & Foundations, and Wealth Professionals.

Asset TV is used as a valuable source of Continuing Education - viewers can register for free and access their own video history for CE credits including accreditation from the CFP Board, IMCA and CFA Institute.

Asset TV is a founding partner of the Bloomberg terminal video service, extending the reach of content to a global audience of 350,000+ institutions.

For more information, visit Assettv.com.