Fracking – the controversial technique of drilling for natural gas and oil – claimed some new victims in Pennsylvania yesterday: A once-majestic stand of maple trees that the Holleran family of Susquehanna County has been working to produce maple syrup since the 1950s. A big pipeline firm, the Williams Companies, successfully used the right of eminent domain to win the right to clear the Hollerans' stand of trees to make way for a new pipeline intended to carry to natural gas fracked from the Marcellus Shale to large urban markets.
According to StateImpact PA, at least three U.S. Marshals armed with semi-automatic weapons and pistols and wearing bulletproof vests were there to protect the pipeline workers from about 20 peaceful protesters carrying signs that read “No Eminent Domain for Corporate Gain” and “Sap Lines Not Pipelines.”
It was just one more way that the fracking boom has ripped Pennsylvania – and Pennsylvanians – apart since its gold-rush mentality swept through big chunks of the northern and western corners of the commonwealth about a decade ago.
It was right around the moment that the first chainsaw was cutting into maple bark when a newsflash swept through the business world and beyond: Aubrey McClendon -- the ostentatious Oklahoma billionaire who was also essentially the godfather of our Pennsylvania fracking explosion, enmeshed in controversy until his final hours – had died under murky circumstances.
In little more than a decade, the former CEO of the once high-flying Chesapeake Energy had come to symbolize first the promise of tapping fossil fuels trapped deep beneath this American soil, and then the peril – the spills and pollution – and the naked greed when rural farmers and retirees claimed that what looked once like a gold rush turned into a Big Con.
Most Pennsylvanians probably never heard of McClendon, or when he was covered – as news of his death was relayed today in the sports section of the Daily News – it was as part-owner of the NBA’s Oklahoma City Thunder. But even before his team started thumping our hapless 76ers, McClendon was quietly changing the path Pennsylvania's politics.
In 2004, the Oklahoman wrote $450,000 in checks to a nationwide Republican political action committee, or PAC, which then funneled the money to the GOP’s Pennsylvania attorney general candidate, Tom Corbett, which the bought the radio and TV ads that gave him a razor-thin victory -- and a platform to become governor six years later. Corbett would repay the fracking industry many times over as governor -- fighting successfully to keep Pennsylvania as the only major gas-producing state without a severance tax.
McClendon later insisted he didn’t know the money was going to Corbett, and his company had no business in Pennsylvania at that time. However, over the next few years, so-called “landmen” working on behalf of McClendon’s Chesapeake were working the rural communities on the state’s northern and western fringes, signing leases and promising big returns as new advances in drilling would now tap the gases deep in the Pennsylvania bedrock.
By the late 2000s, McClendon – whose Chesapeake was also a major driller in the American Southwest – was a billionaire. Pennsylvania was a major source of his wealth; in the late 2000s, one of every six drilling permits in Pennsylvania was issued to Chesapeake, and the firm had some 350 wells in the Keystone State. But the pressure to produce grew enormous.
Much of the pressure came from McClendon who -- in the "There Will Be Blood" spirit of the oil patch -- was a gambler by nature. His massive $1.9 billion share in Chesapeake was leveraged to the max, and when natural gas prices began to collapse -- a predictable Economics 101 supply-and-demand result from all the gas now flowing from fracking pads across the United States -- McClendon was in deep. But instead of paying the piper, he got the company's board to boost his annual pay to $112 million, making him for a time the highest paid CEO in America. The board also spent $12 million to bail out McClendon by purchasing some of the rare maps he'd collected when the times were good.
Yet gas prices -- and Chesapeake's stock price -- continued to fall, and many of the five-year leases that Chesapeake's landmen had signed up were about to expire. The company's drilling increased, and its environmental record went downhill. Pennsylvania regulators wrote up 428 violations against the company and fined it $1.4 million, and last November a unit owned by Chesapeake was hit with another $1.4 million fine for a 2011 landslide at a wellpad that polluted several streams in Greene County.
Also in 2011, Chesapeake workers were trying to close down a well in Avella, Pa., south of Pittsburgh, when "wet gas" that regulators say was being handled improperly burst into flames, causing five tanks to explode and injuring three workers. Residents saw an entire hillside on fire and thought that a C-130 cargo plane had crashed.
That same year, reporting on the company's activities, I spoke to a Bradford County man named Ed Bidlack who told me that he and his neighbors had signed lease deals with Chesapeake's landmen and had hoped to make good money from the fracking boom, but not long after a well was drilled next door, his own water turned funny -- sometimes brown, sometimes fizzing like Alka-Seltzer. Chesapeake had given him a so-called "water buffalo" to replace his well water, but Bidlack still wondered whether the original tap water, tainted with methane, is what had caused his beagle Sid to quickly die from lymphoma.
Other Chesapeake leaseholders said they had a different problem with the now-cash-strapped Oklahoma company; they alleged the firm was cheating them out of royalties by claiming huge costs and then paying the Pennsylvanians next to nothing for the gas produced on their property. There are now several class-action suits against Chesapeake as well as a lawsuit by the state attorney general's office.
Meanwhile, McClendon's personal business practices came under increased scrutiny. In 2012, Reuters published an investigation that chronicled both the billionaire's lavish lifestyle and business practices that critics said amounted to insider dealing; Wrote the news service:
From the 111-acre corporate campus that he shaped with a meticulous eye for detail, McClendon has intertwined his personal financial interests with those of the publicly traded corporation he runs to a far greater degree than shareholders may realize, according to interviews, public records and hundreds of pages of internal Chesapeake documents reviewed by Reuters.
McClendon, 52, has put longtime friends on the Chesapeake board and showered them with compensation. Restaurants he has co-owned occupy buildings owned by the energy company. A Chesapeake executive has handled the CEO's personal land and oil- and gas-well transactions.
The piece also contains this now-chilling passage:
Beyond the mixing of personal and professional, another theme emerges from interviews and records: McClendon's seemingly insatiable desire to own more and more -- of everything. Said a contemporary who knows McClendon well, "If you're competitive like Aubrey, you just always want to own more."
But McClendon's cycle of wealth and greed was already spiraling out of control by the time the Reuters article appeared. A subsequent report by Reuters about a hedge fund that McClendon was running on the side caused the Chesapeake board to force him out as CEO of the company that he'd founded and built. Earlier this year, Chesapeake said it was done drilling new wells in the Marcellus Shale.
This week, the spiral finally closed in. On Tuesday afternoon, McClendon was indicted by a federal grand jury for his alleged role in a long-running bid rigging scheme on oil-and-gas drilling in his home state of Oklahoma. On Wednesday morning, McClendon got in his black Chevy Tahoe and sped down a roadway in Oklahoma City, crossed the center median and crashed at a high rate of speed into a bridge embankment. The 56-year-old McClendon, who was not wearing a seatbelt, was killed instantly. Local police haven't determined whether the crash was an accident or intentional, but a police captain said "he pretty much drove straight into the wall." He'd been scheduled to turn himself in two hours later.
Whatever the cause, condolences are in order for the friends and family who loved him and lost him at such a young age. The story of his life and death played out as a 21st Century kind of Greek tragedy, his seeming brilliance as a business executive ultimately swallowed by his tragic flaw of hubris and the inevitable consequences of "always want(ing) to own more."
In Pennsylvania, Aubrey McClendon is survived by a legacy mostly of conflict, of thick lawsuits, of protesters facing off against armed marshals, of lawmakers and a governor at war over the taxes that gas drillers never had to pay, of brackish water and leaking methane adding to the greenhouse gases that may someday strangle the planet -- of a promise of buried treasure that wasn't really all it was cracked up to be.