March 1, 2012, Rolling Stone Magazine Jeff Goodell The Big Fracking Bubble:  The Scam Behind the Gas Boom exposes the dynamics driving Chesapeake’s Energy’s desire to Drill Baby Drill.  It turns out that Chesapeake, lead by self-made billionaire Aubrey McClendon is really in the business of buying and selling land.  A few years ago McClendon was quoted as saying to Wall St. analysts, “I can assure you that buying leases for x and selling them for 5x or 10x is a lot more profitable than trying to produce gas at $5 or $6 per million cubic feet.” Since leaseholders are required by law to drill on land within three to five years after acquiring the rights or wind up forfeiting the lease, it is critical to Chesapeake that drilling starts in New York State as soon as possible, so that the leases they own will have value on the “secondary” market. However, the business model that Chesapeake and other gas companies are following is very precarious.  In order to acquire more land, they need more capital upfront, then they must drill or lose it; the more gas they drill, the lower the price of gas and the further it reduces their revenues.  This becomes difficult to sustain especially if the wells underperform or if the gas turns out not to be as valuable as they thought. The article makes the case that fracking is as much about producing cheap energy as the mortgage crisis was about helping realize the dreams of middle-class homeowners…