Chesapeake CEO: 'We Can Bring Back $2 Gasoline'

Imagine: Much cheaper prices at the pump. Less fear about the environment and national security. A stronger dollar. More jobs.

That’s exactly what Chesapeake Energy co-founder, Chairman and CEO Aubrey McClendon was pushing for when he was in Washington this week. He met with congressional leaders to try to convince them to move the U.S. transportation network away from “expensive, dirty, imported oil to clean, affordable, abundant, American natural gas.”

“If we can do that,” he told Cramer via satellite Friday, “we can bring $2 gasoline back to the American people.”

McClendon admitted that even just a few years ago, such a meeting couldn’t have happened. Not with former Federal Reserve Chairman Alan Greenspan holding hearings about shortages in natural gas. But new technology has opened up vast reserves in American shales like the Haynesville, Barnett, Marcellus and Fayetteville. These natural gas supplies that were once incomprehensible are now “game changers.”

“They absolutely allow this country to address its energy issues and environmental issues with a clean slate of paper,” McClendon said of the shales. “And rather than thinking about those issues with the idea of natural gas scarcity in your mind, you can now think about them with natural gas abundance in your mind.”

It’s going to take a while for this to sink into the minds of everyday Americans, and even politicians. Only recently has the market realized what’s going on, and the price of natural gas fell accordingly to about $9 from $13. Wise, though, is the politician who gets on board early, McClendon said, because he could almost be guaranteed election – and reelection – by promising consumers a fuel that’s made in America, is two-thirds cleaner than oil and will cut their energy costs in half.

“Tell me,” McClendon said, “what consumer out there says, ‘Oh, I don’t want any of that.’”

Chesapeake Energy is an independent natural gas driller and producer with more leased acres of land than anyone else, 15 million. (CHK announced another 13,000-acre purchase Friday.) This quarter the company became the U.S.’s number-one gas producer – ahead of even Cramer favesAnadarko , Apache, Devon and XTO Energy – and was already the most active driller, focusing on those previously mentioned shales. Chesapeake has a backlog of 34,000 drilling locations.

Rather than get caught up in the Outer Continental Shelf drilling debate, McClendon pointed to the promise of natural gas. Any fruit that the OCS bears “is not going to be something that moves the needle for 10 or 15 years,” he said. But nat gas drilling in American shales “can move the needle right now and can immediately start saving people in this country money and can immediately start improving our environment.”

“This is why it’s natural gas’ year,” Cramer said. “We get a couple politicians behind it, we get energy independence, we get much cleaner skies, and we all make a lot of money. What’s wrong with that?”




Jim's charitable trust owns Devon Energy.

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