As one of the top gas drillers and producers in the U.S., with about 155 rigs running, Oklahoma City's Chesapeake Energy Corp. is a bellwether for gas trends.

Then too, chief executive, chairman and founder Aubrey K. McClendon is never shy about stating his views on gas, energy policy or politics-and backing them up with funding where he deems appropriate.

Now, his most-recent action to shut in some gas wells has attracted negative scrutiny from the governor of Connecticut, who is asking Congress to investigate possible gas-market manipulation to preserve high prices.

In September, Chesapeake announced it would shut in 6% of its net daily gas production, or about 125 million cubic feet, out of a total 1.7 billion it produces daily. And, it said it would reduce drilling temporarily by 10% or about 10 or 15 rigs, to save money. The actions were due to weak gas prices, and to protect the company's long-term shareholder value, McClendon said.

A week later, Connecticut Governor Jodi Rell wrote to the heads of the U.S. House and Senate energy and natural resources committees, complaining about ever-higher natural gas prices for consumers and the possibility of "an unconscionable fleecing of U.S. citizens by natural gas suppliers...."

She accused U.S. producers of attempting to manipulate supply to control gas prices and in particular she cited Chesapeake. EOG Resources Inc., Houston, has also announced some shut-ins, but was not mentioned.

"To allow companies to remove gas supply from the market-to take deliberate actions to promote higher prices-is an outrage," the governor wrote.

Speaking to the American Association of Mineral Owners (AAMO) in Houston, McClendon joked, "I dashed off an eight-page letter to the governor, but after my lawyers finished with it, it was five pages."

His letter to Rell defends the U.S. gas industry: During the past five years, U.S. gas prices have risen 50% but the cost of finding and producing that gas has gone up 100%. "Our profit margins are currently lower than they have been in years past," he wrote.

When announcing the shut-ins, Chesapeake reported it has been the leading contributor to recent domestic gas-production increases. "Over the past year, the U.S. rig count has increased by approximately 70 rigs to around 1,800 rigs, while Chesapeake's operated rig count has increased by approximately 50 rigs, representing about 70% of the nation's overall increase in drilling activity," McClendon said.

"As a consequence of Chesapeake's drilling success, the company's gross daily natural gas production has grown by approximately 550 million cubic feet during the past year, accounting for approximately 50% of the total increase in U.S. natural gas production while using only about 9% of the nation's rigs."

Meanwhile, to further defend the natural gas industry, particularly as compared with using coal for power generation, Chesapeake has created the American Clean Skies Foundation in Washington. It will promote education and dialog about natural gas. Denise Bode, a former IPAA chairman and Oklahoma Corporation Commissioner, is chief executive of the new foundation.

"If you're not at the table, you're on the menu," Bode told attendees at the AAMO meeting in Houston. She noted the energy industry assumes gas will be considered, and will indeed win out over other fuels that are dirtier, more expensive, or harder to come by. But in fact, gas is not yet part of the discussion, she said.

"We're living in an age of ideas. Where is the next revolution for America after the Internet and dot-com? I think it's in energy-and clean energy. A tipping point has occurred and our kids and grandkids are going to learn about a 'watt.com' revolution."

Bode said since she returned to Washington, after a hiatus in Oklahoma, she was appalled to learn that most people think the U.S. is running out of natural gas, and so, gas is not mentioned during debates about future energy sources.

"The gas industry is really in its infancy, but it is being lumped in with the oil industry, which is 100 years old! Think of the gas shales that are only now being developed in the U.S., and we've not even gotten to the gas shales around the world yet.

"Gas is scalable, sustainable and the cleanest fossil fuel."

The foundation plans public education and media campaigns to promote more use of natural gas and to assure the public there is enough gas in the U.S. for many years to come. TV, radio and newspaper columns are being considered.

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