Pivotal Figure in Fracking Debate Tumbles from Summit of His Own Ambition
Billionaire Aubrey McClendon, chief executive of Chesapeake Energy, will relinquish his title of chairman of the board. McClendon founded Chesapeake Energy—the second largest natural gas producer in the U.S. with drilling rights to some 15 million acres—in 1989 and will continue to serve as its CEO.
The impetus for this move is McClendon's involvement in the controversial Founder Well Participation Program (FWPP). The FWPP was approved by shareholders in 2005 to extend through 2015, providing McClendon with up to a 2.5 percent stake in thousands of oil and gas wells.
Citing a conflict of interest between McClendon's stake in the FWPP and shareholders, the board today announced the early termination of the program, effective June 30, 2014. According to Reuters, McClendon has been taking out personal loans to finance stakes in the company's wells, and using those same stakes as collateral for additional loans.
As highlighted in a March Rolling Stone article, The Big Fracking Bubble: The Scam Behind the Gas Boom, much of Chesapeake Energy's profits come from buying and flipping the land that contains the gas. Chesapeake, the most aggressive player in the natural gas field, operates more like a land speculator than a drilling company. This shell game has allowed Chesapeake to stay afloat even as natural gas prices have plummeted and other companies are struggling to survive.
According to insiders, Chesapeake essentially sublet its vast leaseholds to Chinese and Norwegian gas companies at premium prices. These foreign companies apparently hoped that Chesapeake would share its technological wizardry for extracting gas from shale. According to gas industry insiders, those foreign companies were disappointed because the most valuable elements of the recipe for gas fracking was not held by Chesapeake but by the service companies, like Halliburton and Schlumberger. "Statoil and the Chinese put a lot of dough in the Chesapeake leases and never got the technology transfers they were hoping for," said a gas industry insider.
McClendon compromising his fiduciary duty and Chesapeake's enormous debt load are only the beginning of the problems this company faces.
Chesapeake certainly has emerged as one of the natural gas companies least trusted by the environmental community. Chesapeake was at the center of an attempt to find common ground between environmental organizations and the natural gas industry several years ago. The heads of the largest environmental groups and leaders from natural gas companies, as well as policy officials and industry groups, came together to identify areas of agreement and a potential path forward that would facilitate a reduced reliance on coal (a much dirtier fossil fuel), while also developing model regulations and increased safety standards at well sites, justifying increased confidence in the natural gas industry.
This attempt to find common ground quickly eroded when the natural gas industry failed to live up to its end of the bargain, speaking out against the passage of an amendment to a bill in the U.S. House of Representatives that would have mandated disclosure of the chemicals used in the highly controversial process of hydraulic fracturing. It was understood by both sides that disclosure was to be the baseline test of the industry’s good faith, not only in working with the environmental community, but in protecting the public as such disclosure would help link faulty wells with the contamination they cause.
McClendon personally allied with the environmental community to reduce the country’s reliance on coal by increasing demand for natural gas through a series of state policy efforts. In return, he agreed to fight for tougher regulations for the natural gas industry, including the transparency of fracking fluids, to align with environmentalists and help keep bad actor companies from joining the fracking boom. But when the federal legislation was killed in committee, it was clear that industry leaders had betrayed the environmental community by speaking out against the amendment through their lobbying associations.
According to Waterkeeper Alliance President Robert F. Kennedy, Jr., "Among the environmental community and the more responsible gas industry players, we found a widespread mistrust of Aubrey McClendon. My personal experience with him confirms that impression. I think his conduct severely damaged the possibility that the environmental community might work with the natural gas community to develop a regulatory framework that would protect the public interest, and reduce our reliance on coal and foreign oil."
McClendon initially demonstrated his good faith to the environmental community by taking New York City's 2,000-square-mile Catskill watershed—much of it under lease by Chesapeake and its allies—off the table, promising to permanently ban fracking on Chesapeake land in the Catskills. He also offered many environmental groups support for their anti-coal campaigns, including Waterkeeper Alliance. "We thought it would be inappropriate to take that money," said Marc Yaggi, executive director of Waterkeeper Alliance who was at that time running the Waterkeeper Alliance's national campaign against mountaintop mining.
The Sierra Club certainly has taken a lot of heat for accepting money from Chesapeake Energy. Current Executive Director Michael Brune explained the Sierra Club's new position on natural gas drilling in an Insights piece on EcoWatch.org.
"In 2010, soon after I became the organization’s executive director, I learned that beginning in 2007 the Sierra Club had received more than $26 million from individuals or subsidiaries of Chesapeake Energy, one of the country’s largest natural gas companies. At the same time I learned about the donation, we at the Sierra Club were also hearing from scientists and from local chapters about the risks that natural gas drilling posed to our air, water, climate and people in their communities. We cannot accept money from an industry we need to change. Very quickly, the board of directors, with my strong encouragement, cut off these donations and rewrote our gift acceptance policy."
In addition, McClendon has been funding an industry lobbying group, America's Natural Gas Alliance, for a "Coal is Flithy" campaign to try and put the brakes on a Texas utility planning to build 11 new coal plants.
There was a sizable contingent within the gas industry that was genuinely interested in working together with environmentalists for tough regulations, transparency and rigorous enforcement, understanding that natural gas needed to get public confidence and not a black eye. That window only stayed open for a short time.
"Aubrey is a charming, affable, brilliant and powerful figure who had the capacity to lead his industry to do great things for our country and humanity. It's a tragedy that all of his extraordinary potential seems to have been squandered due to poor judgement and the seduction of greed and personal ambition," said Kennedy.
<div id="7aab6" class="rm-shortcode" data-rm-shortcode-id="4bff71c40172c15736f73fe73ed18078"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1330967606585593857" data-partner="rebelmouse"><div style="margin:1em 0">Today, I’m announcing the first members of my national security and foreign policy team. They will rally the world… https://t.co/bAisIQk5P6</div> — Joe Biden (@Joe Biden)<a href="https://twitter.com/JoeBiden/statuses/1330967606585593857">1606162380.0</a></blockquote></div>
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By Melissa Gaskill
Two decades ago scientists and volunteers along the Virginia coast started tossing seagrass seeds into barren seaside lagoons. Disease and an intense hurricane had wiped out the plants in the 1930s, and no nearby meadows could serve as a naturally dispersing source of seeds to bring them back.
Restored seagrass beds in Virginia now provide habitat for hundreds of thousands of scallops. Bob Orth, Virginia Institute of Marine Science / CC BY 2.0<p>The paper is part of a growing trend of evidence suggesting seagrass meadows can be easier to restore than other coastal habitats.</p><p>Successful seagrass-restoration methods include <a href="https://www.sciencedirect.com/science/article/abs/pii/S0304377099000078?via%3Dihub" target="_blank">transplanting shoots</a>, <a href="https://onlinelibrary.wiley.com/doi/10.1111/j.1061-2971.2004.00314.x" target="_blank" rel="noopener noreferrer">mechanized planting</a> and, more recently, <a href="https://www.nature.com/articles/s41467-020-17438-4" target="_blank" rel="noopener noreferrer">biodegradable mats</a>. Removing threats, proximity to donor seagrass beds, planting techniques, project size and site selection all play roles in a restoration effort's success.</p><p>Human assistance isn't always necessary, though. In areas where some beds remain, seagrass can even recover on its own when stressors are reduced or removed. For example, seagrass began to recover when Tampa Bay improved its water quality by reducing nitrogen loads from runoff by roughly 90%.</p><p>But more and more, seagrass meadows struggle to hang on.</p><p>The marine flowering plants have declined globally since the 1930s and currently disappear at a rate equivalent to a football field every 30 minutes, according to the <a href="https://www.unep.org/resources/report/out-blue-value-seagrasses-environment-and-people" target="_blank" rel="noopener noreferrer">United Nations Environment Programme</a>. And research published in 2018 found the rate of decline is <a href="https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2018GB005941" target="_blank" rel="noopener noreferrer">accelerating</a> in many regions.</p><p>The causes of decline vary and overlap, depending on the region. They include thermal stress from climate change; human activities such as dredging, anchoring and coastal infrastructure; and intentional removal in tourist areas. In addition, increased runoff from land carries sediment that clouds the water, blocking sunlight the plants need for photosynthesis. Runoff can also carry contaminants and nutrients from fertilizer that disrupt habitats and cause algal blooms.</p><p>All that damage comes with a cost.</p>
The Value of Seagrass<p>As with ecosystems like rainforests and <a href="https://therevelator.org/mangroves-climate-change/" target="_blank">mangroves</a>, loss of seagrass increases carbon dioxide emissions. And that spells trouble not just for certain habitats but for the whole planet.</p><p>Although seagrass covers at most 0.2% of the seabed, it <a href="https://www.unenvironment.org/news-and-stories/story/seagrass-secret-weapon-fight-against-global-heating" target="_blank">accounts for 10%</a> of the ocean's capacity to store carbon and soils, and these meadows store carbon dioxide an estimated 30 times faster than most terrestrial forests. Slow decomposition rates in seagrass sediments contribute to their <a href="https://www.researchgate.net/publication/238506081_Assessing_the_capacity_of_seagrass_meadows_for_carbon_burial_Current_limitations_and_future_strategies" target="_blank" rel="noopener noreferrer">high carbon burial rates</a>. In Australia, according to <a href="https://onlinelibrary.wiley.com/doi/10.1111/gcb.15204" target="_blank" rel="noopener noreferrer">research</a> by scientists at Edith Cowan University, loss of seagrass meadows since the 1950s has increased carbon dioxide emissions by an amount equivalent to 5 million cars a year. The United Nations Environment Programme reports that a 29% decline in seagrass in Chesapeake Bay between 1991 and 2006 resulted in an estimated loss of up to 1.8 million tons of carbon.</p>
Eelgrass in the river delta at Prince William Sound, Alaska. Alaska ShoreZone Program NOAA / NMFS / AKFSC; Courtesy of Mandy Lindeberg / NOAA / NMFS / AKFSC<p>Seagrasses also protect costal habitats. A healthy meadow slows wave energy, reduces erosion and lowers the risk of flooding. In Morro Bay, California, a 90% decline in the seagrass species known as eelgrass caused extensive erosion, according to a <a href="https://www.sciencedirect.com/science/article/abs/pii/S0272771420303528?via%3Dihub" target="_blank" rel="noopener noreferrer">paper</a> from researchers at California Polytechnic State University.</p><p>"Right away, we noticed big patterns in sediment loss or erosion," said lead author Ryan Walter. "Many studies have shown this on individual eelgrass beds, but very few studies looked at it on a systemwide scale."</p><p>In the tropics, seagrass's natural protection can reduce the need for expensive and often-environmentally unfriendly <a href="https://www.nioz.nl/en/news/zeegras-spaart-stranden-en-geld" target="_blank" rel="noopener noreferrer">beach nourishments</a> regularly conducted in tourism areas.</p><p>Seagrass ecosystems improve water quality and clarity, filtering particles out of the water column and preventing resuspension of sediment. This role could be even more important in the future. By producing oxygen through photosynthesis, meadows could help offset decreased oxygen levels caused by warmer water temperatures (oxygen is less soluble in warm than in cold water).</p><p>The meadows also provide vital habitat for a wide variety of marine life, including fish, sea turtles, birds, marine mammals such as manatees, invertebrates and algae. They provide nursery habitat for <a href="https://wedocs.unep.org/bitstream/handle/20.500.11822/32636/seagrass.pdf?sequence=1&isAllowed=y" target="_blank" rel="noopener noreferrer">roughly 20%</a> of the world's largest fisheries — an <a href="https://www.floridamuseum.ufl.edu/science/seagrass-meadows-harbor-wildlife-for-centuries/" target="_blank" rel="noopener noreferrer">estimated 70%</a> of fish habitats in Florida alone.</p><p>Conversely, their disappearance can contribute to die-offs of marine life. The loss of more than 20 square miles of seagrass in Florida's Biscayne Bay may have helped set the stage for a widespread <a href="https://www.wlrn.org/2020-08-14/the-seagrass-died-that-may-have-triggered-a-widespread-fish-kill-in-biscayne-bay" target="_blank">fish kill</a> in summer 2020. Lack of grasses to produce oxygen left the basin more vulnerable when temperatures rose and oxygen levels dropped as a result, says Florida International University professor Piero Gardinali.</p>
Damaged Systems, a Changing Climate<p>Governments and conservationists around the world have already put a lot of effort into coastal restoration efforts. And that's helped some seagrass populations.</p><p>Where stressors remain, though, restoration grows more complicated. <a href="https://www.rug.nl/research/portal/en/publications/the-future-of-seagrass-ecosystem-services-in-a-changing-world(3a8c56db-7bed-4c9e-ac7f-c72453e2a102).html" target="_blank">Research</a> published this September found that only 37% of seagrass restorations have survived. Newly restored meadows remain vulnerable to the original stressors that depleted them, as well as to storms — and <a href="https://www.ecowatch.com/tag/climate-crisis">climate change</a>.</p>
Seagrass in Dry Tortugas National Park, Florida. Alicia Wellman / Florida Fish and Wildlife / CC BY-NC-ND 2.0<p>In Chesapeake Bay a cold-water species of seagrass is currently hitting its heat limit, especially in summer, according to Alexander Challen Hyman of University of Florida's School of Natural Resources and Environment. As waters continue to warm due to climate change, the species likely will disappear there.</p><p>Climate-driven sea-level rise complicates the problem as well. Seagrasses thrive at specific depths — too shallow and they dry out or are eaten, too deep and there isn't enough light for photosynthesis.</p>
But There’s Good News, Too<p>Luckily, left to its own devices, a seagrass meadow can flourish for hundreds of years, according to a <a href="https://royalsocietypublishing.org/doi/10.1098/rspb.2019.1861" target="_blank" rel="noopener noreferrer">paper</a> published last year by Hyman and other researchers from the University of Florida. The researchers arrived at their conclusion by looking at shells of living mollusks and fossil shells to estimate the ages of meadows in Florida's Big Bend region on the Gulf Coast.</p><p>That area has extensive, relatively pristine seagrass meadows. "Our motivation was to understand the past history of these systems, and shells store a lot of history," said co-author Michal Kowalewski.</p><p>A high degree of similarity between living and dead shells indicates a stable area, while a mismatch suggests an area shifted from seagrass to barren sand. The researchers found that long-term accumulations of shells resembled living ones, suggesting that the seagrass habitats have been stable over time.</p><p>That stability allows biodiversity to thrive, creating conditions where specialist species can survive and flourish, according to Hyman.</p><p>Discovering the long-term stability of seagrass meadows has implications for choosing restoration sites, Kowalewski notes.</p><p>"There must be reasons they thrive in one place, while a mile away they don't and fossil data says they probably never did," he said. "If we remove a seagrass patch, we cannot hope to plant it somewhere else. It's not just the seagrass that is special. The location at which it's found is special, too."</p><p>A better approach is conserving these habitats in the first place, but we're not doing enough of that right now. The UN reports that marine protected areas safeguard just 26% of recorded seagrass meadows, compared with 40% of coral reefs and 43% of mangroves.</p>
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