Aubrey McClendon’s legacy in the energy industry
A major figure in America’s oil and gas industry died on Wednesday in Oklahoma City. Aubrey McClendon, the cofounder and former CEO of Chesapeake Energy was 56. His car was traveling at a high rate of speed and he wasn’t wearing a seat belt. There was no one else in the vehicle and investigators said it could take weeks to parse out the details.
Just a day before this news, McClendon’s was indictment by the Justice Department on charges he rigged oil leases. Those charges, notably, had named McClendon himself, not Chesapeake.
The last line from the Justice Department when announcing the indictment read: “This is the first case resulting from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the oil and natural gas industry.” Chesapeake was cooperating with the McClendon investigation and received immunity. But now that the suspect is dead, it’s unclear what the Department of Justice will be asking Chesapeake to reveal now, if anything.
One development in the case is that the other company involved in the land bid-rigging appears to be Oklahoma-based SandRidge. Tom Ward, one of the co-founders of Chesapeake along with McClendon, was SandRidge CEO at the time of the allegations. Ward and McClendon go back a while. Chesapeake doesn’t have to talk. SandRidge still has yet to comment.
And this isn’t the first time Chesapeake has been implied in bid-rigging or anti-competitive criminal activity. A Reuters investigation revealed in 2012 that Chesapeake had discussions with another energy company — a Canadian energy company, Encana — about how to suppress land lease prices in Michigan. As a result, Chesapeake agreed to pay $25 million last year.
Despite the controversy, today McClendon is being praised by his community. The front page of the Oklahoma City newspaper, the Oklahoman, is basically all about McClendon, praising him as an innovator and philanthropist. A lot of people in Oklahoma will remember him for bringing a NBA franchise to town – the Oklahoma City Thunder.
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