Review: Saudi America

January 7, 2019

book review

Saudi America:
The Truth About Fracking and How It’s Changing the World

By Bethany McLean
Columbia Global Reports
September 2018
140 pages

So you think you know the energy business?

Maybe you do. But not as well as Bethany McLean. As the co-author of The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, McLean knows how the business of energy works.

In 2011, the U.S. became the world’s largest producer of natural gas. Soon after Leonardo Maugeri, former head of Italian oil & gas giant Eni, coined the phrase “Saudi America” when he predicted that U.S. oil production would rival that of Saudi Arabia. Alas in 2018, the U.S. was indeed crowned the world’s largest oil producer, due in large part to the Obama Administration for allowing the repeal of the crude oil export ban in December 2015.

In Saudi America, McLean explains how the U.S. came to outpace Saudi Arabia in oil production. Instead of production charts, graphs, and financial sheets, she begins with the fascinating story of Aubrey McClendon, who co-founded Chesapeake Energy.

McClendon made his initial fortune as a Texas land man buying up large parcels and leasing the mineral rights. An early insider, he saw the fracking boom coming and was able to convince the big money folks that the oil & gas business had changed. It no longer involved the risks of wildcatting. Fracking was a sure thing — like manufacturing. Put the money in one end and marketable, in-demand product comes out the other. All McClendon needed was for investors to keep pumping money into the Chesapeake “factory.”

The practice became known as the Red Queen effect. In Alice in Wonderland, the Red Queen points out that Alice must run faster and faster just to keep pace with where she is. The oil & gas machine similarly requires a constant flow of cash just to keep the rigs operating.

In many respects, McLean’s portrayal of McClendon’s life, and untimely demise, is a metaphor for the shale revolution.

The question is, after the rise and fall of oil & gas tycoons, the stream of bankruptcies, along with the trillions of dollars injected down thousands of well bores across the country, is the U.S. truly energy independent?

McLean answers that question and more in this engaging treatise on the rocky past and risky future of the shale industry. ~ Copyright (c) 2019 by Peggy Tibbetts

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More from Bethany McLean

The Next Financial Crisis Lurks Underground
Fueled by debt and years of easy credit, America’s energy boom is on shaky footing
By Bethany McLean

Interviews with Bethany McLean

SHALE@10
Will it end in tears? Enron author examines fracking boom

Podcast:  In “Saudi America” Bethany McClean [sic] Shares The Truth About Fracking And How It’s Changing The World

 

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