The Denver Post is headless. If it weren’t, it could be certified as schizophrenic. Proof, you ask? In its recent Sunday editorial section, the Post devoted much print to lamenting the demise of print news. Tom Petty, a Post editor, not the real Tom Petty, but a heartbreaker nonetheless, claims that what is being lost with the ascendancy of social media is the reliability and careful fact checking we could depend on in the printed news.
He conveniently overlooked the hysterical war-mongering of reporters like Judith Miller at the NYTs in the lead up to the Iraq War; and more recently the Washington Post with the fake stories on Santa Claus holding the dying boy; Russian hackers destroying the grid and throwing us all into darkness, as if we weren’t there already; and more Russian hackers throwing the election to Trump.
Closer to home, he forgets or doesn’t know that before the collapse of the frackers in late 2014, the Post regularly ran a full section in the paper called, Energy and the Environment. It was made to look like real news and resembled the other sections of the paper in every regard with one exception: it was paid for in full by the frackers to promote drilling and its efficacious impact on the people–jobs and clean energy, their cry; the environment and public health saved by clean burning methane, their promise.
Apparently, Petty hadn’t had the benefit of seeing the banner headline on the front page of his own newspaper that same day. The headline screamed “PRIMED” in large block letters. The author, business writer Aldo Svaldi, proclaimed the second coming of the frackers, and he had quote after quote from their brain trust assuring him that the resurrection was at hand. Not to be missed were the pronouncements of Matthew Owens, the 30 year old CEO of Extraction Oil and Gas, and bete noir of all families living within hearing-loss distance of urban drilling along the front range. Svaldi gushes with praise for Extraction as the “up-and-comer to watch.” The point proven, he suggests, because Extraction recently raised about $1 billion for its operations.
Svaldi claims that unlike many of its failed predecessors, Extraction “has a clean financial slate.” He admits Extraction is somewhat controversial since its business strategy is “buying up holdings located near populated areas other producers viewed as too complicated.” For Svaldi drilling near homes and schools is just another walk in the park, nothing to be concerned about. He is apparently part of the Denver business tribe that is secure in its belief that energy independence demands sacrifices—from other people. He seems to forget that less than 2 percent of Colorado’s land mass is in incorporated in cities and towns, and that that 2 percent cannot give the country energy independence.
In summary, it appears the frackers don’t have to pay for false news anymore. The Post will do it for free.
Here are a few things the Post’s crack fact-checkers missed. Information that is easily found all over the internet.
Extraction Oil and Gas, Svaldi’s new “up and comer,” raised over a billion dollars in stock offerings, to be sure, but it used about $380 million of it to buy back stock and retire old debt. Moreover, according to its filings with the SEC, it lost $60 milliion in 2015 and $450 million in 2016, and, almost assuredly, is on course to lose even more in 2017. That prediction is based on the fact that Extraction is still drilling wells but not completing them because oil prices are still way too low for a profit, but drilling activity is useful to confuse greater-fool investors. According to Extraction’s home page it drilled 8 uncompleted wells last year. These figures and projections give the lie to Svaldi’s assertion that they have a “clean financial slate.” In fact Extraction could need a new infusion of other people’s money very soon, if they invest over $700 million in drilling this year as they told Svaldi was their plan.
On a wider scale, the long term debt of the nation’s top 18 oil producers, Extraction is not one of them, reached $194 billion in 2016, almost doubling since 2008. Losses were so bad for the industry that not only couldn’t they pay down any part of their debt in 2016, they couldn’t even meet the $6.7 billion interest payment on their debt. Does this sound like an industry that is ready for an Easter miracle?
Extraction does not develop wells “near” populated areas as Svaldi soothingly pipes. No, it develops wells in populated areas as the citizens of almost every city on the northern front range of Colorado can attest. It is a one-company-neighborhood-wrecking-crew. Drilling in neighborhoods is Extraction’s niche in the fracking world. In fact, the state just approved a cluster of 24 wells on one pad about 500 feet from the playground at Bella Romero, a primary school of about 400 students in eastern suburban Greeley
As local activist and teacher, Therese Gilbert, told me, “the school already has 8 wells about 800 feet from the front door. The addition of 24 new ones will make Bella Romero the most fracked school in the nation.” The school is dominantly Hispanic, 83 percent. About 92 percent of the students are from low-income families and are thus eligible for the federal school lunch program. Although EPA’s environmental justice guidelines regarding poor minority communities are being “blatantly disregarded,” the County Commissioners have declared they can’t be bothered with such niceties as race, poverty, and environmental justice. Energy independence and other people’s sacrifice must be the goal.
Finally, here are a couple of facts about Extraction’s President Matthews Owens that the Post missed. Owens with limited experience as the 25-year-old co-founder of Extraction in 2012, receives about $420 thousand in salary each year, with another $1.6 million in stock options. (His neighbor, and long-time oil man, was the other founder and is the company’s CEO.) Owens overall compensation package is valued at $25 million, mostly in stock. As a friend and observer of Extraction told me, wait till the insiders start dumping their stock, the bottom will drop out overnight. Actually the company’s stock has been in a long if uneven decline this past year, going from a high of $25 to a low of $14, though there has been a recent surge in reaction to all the free market hype from the Trump crowd, and maybe even a little bump from the Post’s fact-challenged story. Still, it’s not bad compensation for a young guy whose company is and has been hemorrhaging a river of other people’s money, with no end in sight as long as oil stays in the $50 range as most analysts predict it will.
The Denver Post doubled down a few days later on Svaldi’s false news, puff piece of the previous week with an editorial of its own, the title of which was: “Welcome back, oil and gas—we’re happy to compromise.” The Post, like the rest of the corporate interests in Denver and the state’s Democratic governor, feels no compunction in offering up to sacrifice other peoples homes, schools, health, and properties so that energy development can achieve its rightful resurrection.
The Post was apparently unaware that on the very day of its send-up editorial, there was another bit of news in a sidebar story. It seems 2 drilling rigs, of the roughly 25 overall, left the state that very week, so much for the resurrection.
For some reason I’m drawn to Dickens’ closing to Oliver Twist. Dickens wrote, “this is a world of disappointment, often to the hopes we most cherish, and hopes that do our nature the greatest honor.” The Post is unfamiliar with these sentiments, as is the governor. The thousands of Colorado citizens in the cross hairs of urban drillers like Extraction Oil & Gas are not.