“It’s not unlawful to run an ad hominem presidency. It’s merely shameful. The great rhetorical specialty of this president has been his unrelenting attribution of bad faith to those who disagree with him. He acts on principle; they from the basest of instincts.”

– Charles Krauthammer, “There’s a Fly in My Soup,” Washington Post, May 23, 2013.

The alarmist/statist side of the energy/environmental debate is losing intellectually and now politically. The agenda of inferior energies simply cannot stand up to a combination of analytic failure, government failure, and real-world realities. The oil and gas boom … the cessation of global warming; improving air and water quality … alternative energy busts ….

And as the alarmists have become ever more argumentative and shrill, even (former) allies and sympathizers are seeing a quasi-religious, nonintellectual, even ugly aspect to the Climate Progress view of the world.…

When it comes to energy, T. Boone Pickens esteems government planning. When asked about President Obama’s recent proposal for an Energy Security Trust, Pickens responded:

That starts to talk about a plan. He’s going to fund something to start something…. Make a plan … and do something different.

And low and behold, Pickens is crusading with yet another energy plan, his third in the last six years. As before, his animus is against Big Oil (see Appendix) and his fondness for personal dollars.

Pickens Plan III proposes that the federal government sell oil from the Strategic Petroleum Reserve (SPR) to jump-start the costly transition from oil to natural gas to fuel transportation. We don’t know the details yet, but T. Boone in March began pushing his new plan in the national media and local press.…

“Fundamentally, what is to stop a FEB from supporting an energy rationing scheme, say a carbon tax or CO₂ cap-and-trade program, to ‘save the climate’ or ‘level the playing field’ for wind, solar, and other beggar energies? Hofmeister might oppose such programs, but a FEB is ‘independent’ to do so. Anti-energy forces such as the “green lobby” and current Washington establishment will not surrender or retreat but likely become emboldened by centralized power in a federal energy board.”

John Hofmeister, formerly president of Houston-based Shell Oil (the U.S. side of Royal Dutch Shell), has been an active voice for energy policy reform. Upon retiring from Shell in 2008, he founded Citizens for Affordable Energy (CAE), an educational nonprofit advocating “sound U.S. energy security solutions for the nation, including a range of affordable energy supplies, efficiency improvements, essential infrastructure, sustainable environmental policies and public education on energy issues.”…

“[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.…