Saudi America: The Truth about Fracking and How It’s Changing the World, by Bethany McLean

saudiIn an effort to reduce its dependence on foreign energy sources, the United States oil and gas industry invested in research and technology. Aubrey McClendon began his career investing in the natural gas industry as somewhat of a superstar, but he ended it, and his life, in infamy with accusations of criminal conduct and fraud. McClendon was determined to make America a dominant figure in the energy industry and, as a byproduct, make it less dependent on foreign imports. He envisioned an America that exported energy as well as consumed it.
To further interest in the natural gas industry, McClendon demonized the coal industry as “dirty”. He was talented as a salesman and his charisma was well known. He sold a bill of goods to everyone, obtaining financing even when the ground beneath his reasoning was shaky, no pun intended, and when he was over leveraged, living large and ignoring the increasing weight of his mounting debts. He always believed he would land back on his feet in spite of all the obstacles he faced.
Was he a hero or a villain? Did he dupe the investors or was he a victim of a world situation outside of his control. He was impetuous and often acted by the seat of his pants without carefully considering the consequences. Did he ignore the warning signs of the demise of his industry, of the increases in cost which would doom him, even if temporarily? Did he not see that Putin and Russia were expanding their own opportunities? EOG, which was formerly the now defunct Enron, was becoming a major competitor after it rose like the phoenix from the dust, in much the same way that Chesapeake Oil had once risen from out of nowhere. As the oil profits from fracking rolled in and increased, the natural gas industry declined. Conspicuous consumption by those reaping the profits from both the natural gas industry and the fracking industry was widespread with their purchases of mega mansions and sports teams, among other things. Would these fortunes last? They never showed a profit. Investments in their businesses were based on a wing and a prayer.
In 2008, McClendon watched his fortunes dwindle and become debts, as the oil industry overtook his natural gas industry and shattered his dreams. He went from being high on the hog, in the black, to being in debt, in the red. He bore it well, though, as was his inclination in all things. C’est la vie. He believed that the price of gas would rise again, and this over mortgaged giant of a man thought he, too, would rise again. Ultimately, he did, but it did not last. Soon the price of gas declined again. The energy market was capricious, and competition from other sources was interfering with his market.
Meanwhile, though, the fracking industry was also suffering losses. The combination of fraudulent reporting, over indebtedness and lack of profit was a perfect storm for failure. When Opec became wary of falling prices, they realized that it was far cheaper for them to get oil out of the ground than for the frackers, but the fear of losing market share kept them from trying to manipulate the world market. Doing nothing worked better, and the price of oil that was fracked continued to weaken. For awhile, the energy industry in the United States was in decline.
On a personal level, McClendon was being investigated and was finally indicted for price rigging. Others afraid of being contaminated by associating with him threw him under the bus. He was abandoned by the top brass of the company he founded. As criminal charges and demands for financial damages assailed him, what was he thinking? On the outside, he seemed his same optimistic self, but he suffered a violent death, in an accident, which some people thought was suspicious. His life was falling apart around him, and they wondered if he took his own life. From the king of the industry, he became its pariah.
As the price of oil and gas continued to fall, so did the fortunes of many in the energy industry and some companies went bankrupt. Finally, though, when the export ban on oil was lifted, fracking became profitable and became the hope, again, of making America energy independent. Hence, the title Saudi America; the United States would produce enough to eliminate imports and perhaps provide enough to begin exporting as well as providing for the lion’s share of the country’s needs. McClendon did not see the industry’s return to solvency, and one can only hope the industry remains healthy.
Because of the author’s association with far left interests, I scrutinized her information very carefully. I wondered if she might have a political agenda in the presentation of her facts. Energy independence is to be desired, but at what price becomes the question. Will fracking make us energy independent? Will the return of the coal industry be a positive or will it increase pollution. Actually, the production of natural gas has turned out to produce more methane and not be quite so good for the environment. Our fossil fuels will one day run out., anyway, so we must develop alternatives; the current administration, she believes, and so do scholars and others in prominent positions, is not giving the problem its proper due and is squandering the resources we have by not restricting its use, and by creating a bit of chaos in the worldwide energy industries with the current energy policy.
The book is informative and raises many questions that need to be answered abut the future use and supply of energy, whether fossil fuel or renewable.
*I received this book as part of a promotion on

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