Jeff Goodell and Rolling Stone Strike Back at Chesapeake

Round 3 to Goodell
The war of words continues between Jeff Goodell and Chesapeake Energy.  After Chesapeake responded to dispute the accuracy of Goodell's article over the weekend, the writer has come back at the energy company with a scathing response to their claims.

If you have been following the blow-by-blow of this fight, then you will no doubt want to read the latest article.  But even if you haven't paid attention to our previous posts on this topic, you would probably do well to read Goodell's latest article.  More after the jump...

Especially interesting is how Goodell tears down the natural gas industry's claims, as we pointed to yesterday in our post on the American Petroleum Institute's "The State of American Energy" report, that there is enough of a natural gas resource base to meet demand for 100 years.  From his article:

The "reality" of 100 years of shale gas. This claim is a great example of the kind of misleading rhetoric that Chesapeake – and the natural gas industry as a whole – specializes in. The assertion deliberately confuses what geologists refer to as the “resource” and the “reserves.” The resource is basically all the natural gas that geologists believe exists; the proved reserve is what they believe is currently recoverable at today’s prices, with today’s technology.  The resource is indeed close to 100 years; but according to most calculations (including the Potential Gas Committee, a respected source that is cited by Chesapeake), the reserve is more like 11 years. The actual amount of gas we’ll be able to get out of the ground in the future depends on factors like price and demand and whether new technologies can be developed to get at hard-to-extract gas, and whether or not you care that it requires blasting and drilling our way through suburbs and national parks. Chris Nelder over at Slate has a good primer on this. The debate over reserve size is important, because it raises a lot of interesting questions about future energy investments. If McClendon wants to invest hundreds of millions of his dollars to convert vehicles to natural gas, that’s up to him – but why invest big public dollars in a fuel that might not last much more than a decade?
The rest of his response is really just more of the same.  For example, this is how he concludes:

Finally, there is one assertion made by Kehs in the company’s response that is completely true: Like all writers who make use of a wealth of research and interviews, I "omitted" certain things from my article. I didn’t tell you – shame on me! – that Chesapeake has essentially operated at a loss since October 2003, its capital spending exceeding cash from operations in every single quarter. Or that it faces a criminal investigation by the U.S. Department of Justice for violations of the Clean Water Act in West Virginia. Or about how it hid behind shell companies to grab land in Michigan – then tried to swindle hundreds of owners out of money and contracts.
I regret these errors of omission, and hope other reporters will follow up on them.
While there can be little argument that Goodell is as biased against Chesapeake as they are against him, the reports and studies that he cites carry weight, and I really encourage everyone to read his response.  The truth probably lies somewhere in between his rhetoric and Chesapeake's, but even if that is true, the gulf between the two is so wide that it still leaves plenty of room to choose sides.

Where do you come out in this?  Is Goodell slanting the facts to paint an ugly portrait of Chesapeake, or are they really just that ugly?  Let us know!

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