“[Free energy] markets tend not only to clear, but to clear faster and at lower prices than anticipated.”

The resignation of Aubrey McClendon as CEO of Chesapeake Energy provides a good case to study in corporate strategic planning. Ignoring his financial side deals, for which he has received a good share of criticism, the wisdom of his primary strategy, the aggressive pursuit of shale resources, is an open question to many. Although he has been hailed as a pioneer and risk taker, clearly those risks have gone bad and should be examined.

Higher Prices: A Bad Bet

The core failing was his decision to bet the firm (essentially) on high natural gas prices. From 1997 to 2005, wellhead prices had increased from $3/Mcf to $8/Mcf (2010$), the highest level historically. This, combined with a neo-Malthusian mentality, convinced him and many others that prices would not be mean-reverting, but remain at levels from two to three times the historical average.…

“During Human Achievement Hour, enjoy the benefits of capitalism and human innovation. To celebrate participants need only to spend the 8:30pm to 9:30pm hour on March 31 enjoying the benefits of free enterprise and human innovation: gather with friends in the warmth of a heated home, watch television, take a hot shower, drink a beer, call a loved one on the phone, or listen to music.”

The Competitive Enterprise Institute (CEI) is a feisty bunch. Their global warming realism team of Marlo Lewis, Myron Ebell, Chris Horner, and William Yeatman is crack.

And really, who would you rather have a beer with: Marlo Lewis or that guy Joe Romm over at Climate Progress? Heck, Marlo might bring his Mandolin and Old Town Tradition band to entertain you!

I think we win the ‘good guys’ award in the highly contentious global warming debate, not only the intellectual case for climate livability and public policy inactivism.…

“[N]eo-Malthusians like [Paul] Gilding resemble hypochondriacs who insist that they are at death’s door and see every sniffle as confirmation that the end is near. Rather than launch massive programs to sterilize the population or make everyone vegetarians, we should hand them a tissue and tell them to get over it. Or, as the English philosopher Pete Townsend said, ‘This is no social crisis, just another tricky day for you’.”

– Michael Lynch on Thomas Friedman et al.

Thomas Friedman’s New York Times latest column–The Earth is Full–quotes environmental-entrepreneur Paul Gilding (author: The Great Disruption) about the rampant denial concerning the world crossing of “growth/climate/natural resources/population redlines all at once.”

So just about all of us do not see what is so obvious to these smartest-guys-in-the-environmental room. Really.…

[This is Part II of an interview of Robert L. Bradley Jr. by Stephen Hicks (website here). Part I was published last week.]

Kaizen: You began as a specialist in oil and gas regulation. How did you evolve from there to where you are now?

Bradley: There are four or so stanzas in my intellectual career to date. The first was certainly oil and gas regulation, taxation, and subsidization, the subject of my Cato book, Oil, Gas & Government: The U.S. Experience. The research for that was essentially complete by 1985 when went to the corporate world by joining HNG-InterNorth, soon to become Enron.

In my first years at Enron, I became conversant with the electricity market and its regulation, which was really a new area for me, a second stanza in my development.…