Price Fixing?! By Frack Companies?! Say It Ain’t So!
by Buck Quigley - posted 12:57 pm, June 26, 2012
Reuters reports how Chesapeake Energy (the second largest US fracker) conspired with Encana Corp. (the largest Canadian fracker) to hold down the price of land in the state of Michigan.
From the story by Brian Grow, Joshua Schneyer and Janet Roberts:
In emails between Chesapeake and Encana Corp, Canada’s largest natural gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners here.
In one email, dated June 16, 2010, (Chesapeake CEO Aubrey) McClendon told a Chesapeake deputy that it was time “to smoke a peace pipe” with Encana “if we are bidding each other up.” The Chesapeake vice president responded that he had contacted Encana “to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim.” McClendon replied: “Thanks.”
Also from the report:
“Private industry cartels are forbidden in the United States, where price-fixing between competitors is illegal under the Sherman Antitrust Act. Violations carry stiff penalties. Companies can be fined up to $100 million and individuals up to $1 million for each offense. Jail sentences – which are rare – can be as long as 10 years, and collusion among competitors can lead to prosecution or fines for mail and wire fraud. Victims of bid-rigging can also seek triple the amount of damages.”
I’m confused. I must have seen a hundred commercials during the weekend news shows assuring me that natural gas was a clean industry. And to think this company Chesapeake was a sponsor of the shale institute at SUNY Fredonia—you remember, the one that abruptly vanished, the one where professor Gary Lash named his wife as co-director? I just don’t know who to believe anymore—the investigative journalists or the corporate shills.