Though not personally invested in this stock, Chesapeake Energy has always been intriguing to me nonetheless. The more one reads about this company, the more interesting this company becomes. Headed by Aubrey McClendon, Chesapeake Energy is a publicly traded company based in Oklahoma City, Oklahoma, and its financial interests lie mostly in the midwestern United States. If you haven’t heard of this company, you should be informed that they are the largest hydraulic fracturer ”in the world“.
Hydraulic Fracturing, or fracking, is when a hole is drilled miles down into the surface of the Earth, then a lateral hole is drilled for miles underneath rock. Water mixed with chemicals is used through this system to break apart that rock which in turn releases natural gas. If you watch the news, you have undoubtedly seen a commercial or two for clean gas or natural gas as the solution to future energy needs.
First, as many know, this is a lie. With the release of the documentary Gasland, information about tap water exploding in flames has gone viral. We simply cannot continue to support yet another environmentally hazardous company (which has close ties to ‘Big Oi’l) when clean alternatives are not only available, viable and if publicly funded would turn the US economy around by growing the middle class; it is already being used worldwide by nations that have surpassed us with integrating said technology. This in turn will allow the cord to be cut from overly bureaucratic big oil companies that whine to get their government tax-funded subsidies year after year while simultaneously not paying taxes of their own, contributing nothing but environmental hazards in the mean time.
Second, the most recent news with this company — the Keystone Pipeline. This is a transnational effort to build a pipe to transport natural gas. From Canada down through the U.S. to Mexico, this would cover many miles and require many hands to build. ‘Great for the economy!’ is how it’s being pitched to American voters as well as politicians. No matter the effects. Or the fact that it will be contracted to a specific few for work. The Pipeline has not yet been greenlit, though there have been many protests regarding its installation (remember Tar Sands); the President has delayed this decision until January. Despite that however, there are already wheels turning for this project with land grants and permits. Seemingly the pie is already being sliced, with the taxpayers and Earth-lovers set to receive the smallest slice of course. This brings us to the third point.
This company was in dire trouble and headed for bankruptcy. While they may have an arena and a strong PR face, the stock has been volatile since its 2008 nose-dive. It seems that by staying in the background, Chesapeake Energy was able to prevent this news from sealing its fate (going public helped with investments). In fact, playing this stock short-term would have given an investor gains — which seems to be what this company was used for when the story broke that Chesapeake was making more buying and selling land than they were at making an energy alternative. Aubrey McClendon was never meant to be an energy guy; he was an accountant.
Despite all of that evidence as to why this company should not exist, there are calls now for investors to put money into the company because a big payoff is coming. The Keystone XL Pipeline very well may get built and Chesapeake will become that first and biggest name in ‘clean gas’. They will be shot directly into the stratosphere with the gains from the project, and they know it. After that point, it’s only a matter of time before Chesapeake becomes the next wave of Big Oil; overly subsidized and coddled at the expense of us, the taxpayers. Why? Because they are “job creators” and “economic boosters”. Nevermind how much better off the world would be if pacts were signed by countries the around world to publicly invest in renewable energy as a means to boost infrastructure productivity thereby increasing the middle class globally, and bettering everyone with more social mobility and consistent means of life.