Dateline: 18 February 2012
The man pictured above is Aubrey K. McClendon. He’s the Chairman and Chief Executive Officer of Chesapeake Energy, a company that he co-founded in 1989, and which is based in Oklahoma. Chesapeake is now the second largest producer of natural gas in the United States. If you watch and hear Mr. Aubrey speak, he comes across as a real nice guy. For all I know, he is a real nice guy.
But Mr. Aubrey’s company has bought up a lot of gas leases in the town of Sempronius and that concerns me a lot. What concerns me is that when Chesapeake (and other gas companies) bought leases from the good folks of Sempronius, they never informed them of the significant dangers that they and all their neighbors would be facing when the gas companies started drilling gas wells (by the way, Mr. Aubrey likes to refer to the wells as “our factories.”).
It turns out that the gas drilling companies, like Chesapeake, really don’t like to admit to anyone—especially people in the communities where their “factories” are located—that their drilling operations are inherently dangerous. In fact, gas company representatives will give presentations to people in communities just like Sempronius and tell them how good and safe hydrofracking is.
But if you go to the Chesapeake Energy web site, and drill deep into all the information they have there, you will find a PDF file titled
424B5
Prospectus filed pursuant to Rule 424(b)(5)
Filed on 02/13/2012
Prospectus filed pursuant to Rule 424(b)(5)
Filed on 02/13/2012
424B5 is an 80-page document that is required by the Securities & Exchange Commission. It serves to inform potential investors in Chesapeake Energy of the “risks” that come with investing in unconventional gas drilling. And it is there, on page 23 of the obscure file, that Chesapeake Energy admits to its investors what they do not admit to the people in the communities where they drill for gas....
Natural gas and oil drilling and producing operations can be hazardous and may expose us to liabilities, including environmental liabilities.
Natural gas and oil operations are subject to many risks, including well blowouts, cratering and explosions, pipe failures, fires, formations with abnormal pressures, uncontrollable flows of natural gas, oil, brine or well fluids and other environmental hazards and risks. Our drilling operations involve risks from high pressures and from mechanical difficulties such as stuck pipes, collapsed casings and separated cables. Some of these risks or hazards could materially and adversely affect our revenues and expenses by reducing or shutting in production from wells or otherwise negatively impacting the projected
economic performance of our prospects. If any of these risks occurs, we could sustain substantial losses as a result of:
—injury or loss of life;
—severe damage to or destruction of property, natural resources or equipment;
—pollution or other environmental damage;
—clean-up responsibilities;
—regulatory investigations and administrative, civil and criminal penalties; and
—injunctions resulting in limitation or suspension of operations.
There is inherent risk of incurring significant environmental costs and liabilities in our operations due to our use, generation, handling and disposal of materials, including wastes, petroleum hydrocarbons and other chemicals. We may incur joint and several, strict liability under applicable U.S. federal and state environmental laws in connection with releases of petroleum hydrocarbons and other hazardous substances at, on, under or from our leased or owned properties resulting from current or historical operations. In some cases our properties have been used for natural gas and oil exploration and production activities for a number of years, often by third parties not under our control. We also could incur material fines, penalties and government or third-party claims as a result of violations of, or liabilities under, applicable environmental laws and regulations. For our non-operated properties, we are dependent on the operator for operational and regulatory compliance. While we maintain insurance against some, but not all, of the risks described above, our insurance may not be adequate to cover casualty losses or liabilities, and our insurance does not cover penalties or fines that may be assessed by a governmental . Also, in the future we may not be able to obtain insurance at premium levels that justify its purchase.
Wow.
I can't help but think that reading of those risks and liabilities is like looking into the future of Sempronius if hydrofracking is allowed to proceed in this town. Those risks are, after all, the current news reports I’m reading from every area of the country where hydrofracking is now going on.
Those risks are just business expenses to Mr. Aubrey K. McClendon, but they are harsh, life-changing realities to the people in the towns where the accidents take place. Towns just like Sempronius.
I’ve said it before (and I’ll say it again), my whole concern as a town board member in Sempronius is that the health, safety and welfare of the people in this town be protected. Chesapeake Energy admits (to their investors) that the health, safety and welfare of people in the communities where they drill is at risk.
Am I in favor of a moratorium on hydrofracking in Sempronius? You better believe it!