Chesapeake: From Bad to Worse to Potentially Criminal by Brian Stoffel, June 25, 2012, The Motley Fool
Imagine this: In May of 2010, the Michigan Department of Natural Resources held land auctions that drew particular interest from natural gas companies hoping to frack the state’s Collingwood shale. The auction of 118,000 acres brought in a whopping $178 million for the state. A full 83% of bids had competitive offers, and Chesapeake and Encana combined to contribute 93% of the sales to the state. Just five months later, Michigan held a similar land auction. This time, more than twice as many acres were up for sale. The result? The state brought in a paltry $9.7 million. Whereas land went for about $1,500 per acre in May, it sold for just $35 per acre in October. It probably didn’t help that natural gas prices had fallen 20% in the interim, but that hardly explains the full extent of a 98% drop in land price. Even before the October auction, a contractor hired by Chesapeake to bid for land noted that both companies had cut their maximum per acre bids by 50%. This led the contractor to question the company if this was just a “coincidence.” Though the contractor never got an official answer to his question, emails reveal that it may not have been a coincidence at all. … Colluding with a competitor to hold prices down for land would be in direct violation of the Sherman Antitrust Act and carry stiff penalties. Companies could be fined up to $100 million — and individuals $1 million — for each offense. Additionally, victims of the rigging can receive up to triple what they missed out on. Though it is common practice to have joint ventures and area-of-mutual interest agreements between competing companies, it does not appear that either one of these mechanisms was in place during the October bidding. Instead, it seems that the companies divvied up counties to lower competition. Emails reveal that the two companies evenly divided bidding in certain counties. In the end, neither company abided by the agreement 100%, but neither company bought land in the same county as the other. … It could take months or years for this to play out in court, but the markets need not wait to factor in such risks. Chesapeake has already been plagued by bad behavior from McClendon, ranging from leveraged bets that exposed him to conflicts of interest to running a secret hedge fund with current SandRidge Energy (NYS: SD) CEO Tom Ward. I wouldn’t be surprised to see McClendon shown the door soon at Chesapeake. For Encana, one of Canada’s largest natural gas companies, it’s more difficult to see how things will play out. [Emphasis added]
-
Recent Posts
- Central Alberta: 2005 study suggests oil and sour gas facilities located within 4 km of rural residential properties significantly affect their sale price. June 2, 2023
- Jason Redmond, OPP cop who sexually assaulted and filmed unconscious woman, could face ‘exemplary’ sentence. *Could* is key. I doubt it’ll happen. Canada’s patriarchy-serving judges favour rapists, letting them off, again and again, no matter how vile their crimes, often revictimizing victims. May 31, 2023
- Belmont Co, Ohio: Father and 10 year old son drown in plastic-lined frac water hoarding impoundment. Younger son, age 8, went to get help. What terror all three endured. May 31, 2023
- Fracking Next Door May 28, 2023
- Oh my raped and frac’d heart; I can’t take much more of the hideousness and stupidity of humanity. Spotted owl in Canada: going going … May 26, 2023
- Dear Ruby River Capital LLC and your Énergie Saguenay: Take your greedy Clusterfuck lawsuit for *your* failures back to Hell. How many hundreds of $Billions would *you* owe Canadians for your part in burning Canada up and polluting our climate, air, land, water and public health via frac’ing? You owe us! Not surprising Osler represents you. May 24, 2023
- Hey CBC! Why report that PFAS chemicals are used in EVs, batteries and solar panels but leave out that oil & gas frac’ers, including Encana/Ovintiv, use them too? May 20, 2023
- New study: Scientists find massive amount of methane, super-potent greenhouse gas, spewed from California wildfires. Any air quality managers accounting for methane from wildfires in Canada? May 20, 2023
- South Africa to frac ecologically sensitive water scarce Karoo. Frac’ing will “directly and detrimentally affect women’s lives.” Yup. May 19, 2023
- New study on wildfires: Measurable connection between acres burned and carbon emissions released by world’s largest fossil fuel companies.”The general public has been left footing the bill for these disasters.” May 19, 2023
- Frac Central Alberta: Fox Creek Wall of Wildfire. How many hundreds of thousands of fracs are leaking methane, ethane, propane, butane, pentane, sour gas to surface fuelling wildfires? Do leaking facilities, wells, pipelines start and fuel fires? Who’s checking? AER? Encana/Ovintiv? Chevron? No one. May 17, 2023
- New Brunswick Premier Blaine Higgs: Old, white, Irving Oilman (for 33 years), anti-First Nations, anti-water, anti-community, anti-health, anti-environment, anti-rule of law, anti-truth frac pimp. Dolly Parton: “Greedy politicians present and past. They wouldn’t know the truth if it bit ’em in the ass.” May 12, 2023
- Really pope? Capitalism? Perhaps popes helping priests rape kids is stopping Italians from having kids; popes and christian men sure stopped me. May 12, 2023
- First PEI criminalized frac’ing to protect their water, now this! So positive, smart, easy, can be relocated, and benefits community instead of just the raping polluting rich April 29, 2023
- Welcome to Patriarchy’s AI: Of course all lawyers are men! And white, and privileged, and racist, and misogynistic, and bigoted (hate & rage farm against anyone they think has no right to live in peace, or live at all), and break the rules, and betray their clients after half a million dollars wasted, and and … April 27, 2023