By Christopher Swann The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Goldman Sachs is making a dash to invest in renewable energy projects. It says it will invest $40 billion of its own and clients’ money over a decade. The Wall Street firm isn’t above self-serving spin, but it’s also never far from the money. With solar and wind power nearing cost levels that are competitive with fossil fuels, clean energy could burnish Goldman’s bottom line as well as its green credentials.

A degree of cynicism over Thursday’s announcement is warranted. The firm helped funnel $4.8 billion to clean energy firms in 2011, so its latest pledge, averaged over 10 years, would actually represent a drop in investment in the sector. But in fact Goldman has a record of being better than its word on environmental investments. A $1 billion commitment in 2005 turned into the deployment of $24 billion of financing by the end of 2011.

And, of course, money talks. Goldman’s timing looks spot on. Solar and wind power seem close to a tipping point in many parts of the world, including the firm’s home market. In sunny U.S. states like California, for instance, the price of solar electricity under long-term contracts has plunged from about 17 cents per kilowatt-hour in 2010 to around 8 cents now, according to Green Tech Media. It would cost a couple of cents more without government incentives, but it’s now within striking distance of electricity generated from natural gas. At today’s low gas prices, that runs around 6 cents per kilowatt-hour.

Technological improvements have also driven the cost of wind generation down by about a fifth over the past decade, again to within easy range of gas-fired generation even in parts of the United States where the winds aren’t especially reliable, according to the Department of Energy.

An added major selling point is that once generation equipment is installed, these prices are locked in for decades since the sun and wind are free. The same cannot be said of America’s gas or even coal, let alone oil. With renewable energy looking like it will soon hold its own competitively, Goldman’s latest $40 billion promise is one it should have little trouble keeping.

By Christopher Swann and Robert Cyran The authors are Reuters Breakingviews columnists. The opinions expressed are their own. Chesapeake Energy, the embattled U.S. natural gas producer, seems to have missed some of the lessons of Enron’s demise. There have been no allegations of fraud. But the U.S. gas firm’s vast trading operation, fondness for complicated holdings and relationships, and corporate generosity are among the traits that, in hindsight, should have invited greater scrutiny of Enron’s edifice.

Chesapeake is a force in the U.S. gas market. It owns real assets, and it is the second-largest producer in the United States, accounting for about 9 percent of gross domestic gas supply according to a recent company presentation. It is the most active driller of new U.S. wells, and has substantial proven and unproven reserves. Meanwhile, joint-venture partners including Total of France and Norway’s Statoil attest to the substance of the projects they are involved in.

By contrast, while Enron’s byzantine structure and other questionable features may have developed to support aggressive expansion, they ultimately helped conceal essentially fake trading activities and fraudulent accounting. There is no suggestion that is the case, or might ever be the case, at Chesapeake. And other companies are complex or, for instance, offer generous perks without running into trouble. Yet it’s notable that Chesapeake, a self-described “bold” competitor in a sector close to Enron’s, has seemingly failed to avoid some of the defunct energy giant’s well documented flaws.

Corporate complexity Some Wall Street analysts admitted that they didn’t really know how Enron made money. The company had evolved into a labyrinthine organization that combined real energy assets, a black box trading operation and a web of off-balance sheet structures.

For its part, in conjunction with its energy properties and trading business, Chesapeake had seven joint ventures as of March 31, according to its first-quarter filing with financial regulators. U.S. gas sector rivals typically have only one or two such partnerships – Devon Energy, whose market value is more than twice that of Chesapeake, has only one. Chesapeake also had 10 so-called volumetric production payment agreements (deals to sell future production of gas or oil in return for up-front payments) and four separate holdings classified for reporting purposes as variable interest entities, including a controlling stake in a separately listed master limited partnership.

“The company is impossible to fully understand,” says Phil Weiss, an analyst who covers Chesapeake at Argus Research. “It’s what I can’t see that worries me.”

Oversized trading businesses Chesapeake has reported realized cash gains on hedging of $8.5 billion for the period from January 2006 to March 2012. That’s more than four times its cumulative $1.8 billion of net income over the same period. That makes the company look more like a hedge fund than a gas producer, even though it still holds plenty of gas assets.

By Christopher Swann and Robert Cyran

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Pricey medicine can help. But in Chesapeake Energy’s case, it shows how sick the company is. The embattled energy firm is borrowing $3 billion at 8.5 percent to repay a loan whose terms might otherwise prevent asset sales. This buys time. But it makes even more obvious Chesapeake’s unsustainable reliance on selling assets to fund its persistent cash drain.

Chesapeake, America’s second-largest natural gas producer, has been cash-flow negative for a decade. Fitch Ratings reckons it faces a $10 billion shortfall this year. Aubrey McClendon, the chief executive now beset by questions over financial conflicts of interest, recently sounded characteristically confident that the gap could be bridged by asset sales. The company is targeting up to $14 billion of them this year.

But the firm’s quarterly filing with regulators on Friday – curiously delayed – painted a less optimistic picture. Chesapeake said it might have to delay and rejig asset sales to avoid flogging off assets needed as collateral or cutting cash flow below the level required by its debt covenants. The shares slumped 14 percent, and have lost about half their value in the past year.

The main stumbling block appeared to be the firm’s $4 billion revolving credit facility. The new, much more expensive loan from Goldman Sachs and Jefferies unveiled later on Friday will repay that, easing concerns that a cash flow squeeze could force more asset sales only to have lenders demand repayment, creating a fresh cash deficit.

But it’s a temporary reprieve. Chesapeake still needs to reduce its debt and wring more dollars from its wells. Selling choice oil assets while gas properties suffer with ultra-low prices only whittles away further at the company’s long-term earning power.

By Christopher Swann and Robert Cyran The authors are Reuters Breakingviews columnists. The opinions expressed are their own. Chesapeake Energy’s decision to do the right thing shouldn’t impress investors. Its directors are only doing so under duress. Stripping Chief Executive Aubrey McClendon of the chairmanship and ending his personal investments in the firm’s wells are obvious and very belated moves. But McClendon’s deal-making and borrowing have accompanied lagging returns. Shareholders deserve more radical changes in the boardroom.

Many of Chesapeake’s woes may have been exacerbated by allowing McClendon to take a slice of each of the company’s wells. Sure, he shared the costs of drilling but the way he borrowed reduced his personal risk, giving him an incentive to push Chesapeake into a perpetual spending spree. Furthermore, as a risk-taker by nature, McClendon pushed the firm to take on far too much debt – close to half of which resides off the balance sheet. The firm’s monstrous complexity, thanks to dozens of side deals, also looks to have been driven partly by a desire to fund this empire-building.

Unfortunately, the board’s moves don’t amount to enough. Chesapeake’s long underperformance meant the board had plenty of time to consider the impact of the well program’s perverse incentives. Even accounting for dividends, Chesapeake investors have lost about 40 percent over the past five years, against positive returns of more than 50 percent for rival EOG Resources and 85 percent for Range Resources.

Yet directors didn’t act until a media firestorm consumed the company. What little steps they have taken so far reinforce their unwillingness or inability to rein in McClendon’s risk-taking unless they have a gun to their heads. They virtually admit as much by allowing him to stay on as chairman until they identify his replacement, rather than having one of them take on the role, if only temporarily. In any event, one outsider is going to find it tough indeed to stand up to the firm’s founder and chief executive backed by a supine board.

At the very least, additional board members are needed, in addition to the two seeking reelection who shareholders can vote against in the upcoming annual meeting. McClendon has at least amassed an impressive energy portfolio. But he increasingly looks to be the wrong man to harvest these resources. His financial legerdemain has left the firm highly vulnerable and means investors may never get to reap the full benefits from Chesapeake’s most promising businesses.

By Christopher Swann and Robert Cyran The authors are Reuters Breakingviews columnists. The opinions expressed are their own.Questions about Chesapeake Energy go beyond its chief executive’s dubious dealings. Aubrey McClendon’s personal stakes in oil and gas projects and the extent of related disclosure have put the $12 billion U.S. energy giant on the back foot and tied its board in knots. But investors should also be wary of the company’s monstrous complexity. It has convoluted off-balance sheet liabilities thanks to convoluted partnerships; hedging gains have dwarfed profit since 2006; and cash flow is consistently negative.

Chesapeake, the nation’s second-largest gas producer, has become its own worst enemy. Revelations that McClendon, the company’s flamboyant co-founder, failed to disclose $1.1 billion of personal borrowing to co-invest in wells with the company have raised the specter of serious conflicts of interest and shaken investors. The company originally said its board was “fully” aware of the CEO’s financing transactions, but on Thursday said the directors were only “generally” aware and moved to end the co-investment program – which U.S. regulators are now scrutinizing.

All the while, though, Chesapeake itself is becoming harder and harder to understand. The firm has been scrambling to raise about $10 billion in cash this year to help cope with a hefty debt load and sliding U.S. natural gas prices. Three transactions earlier this month raised $2.6 billion, but added to off-balance sheet debt and made the firm’s structure even more tangled.

Chesapeake has negotiated seven joint ventures which give rival firms part-ownership of oil or gas fields in return for stumping up cash and a portion of drilling costs. No peer has a network of deals on anything close to this scale. Rival Devon Energy, which has a market value more than twice that of Chesapeake, has just one joint venture. And Chesapeake has concluded 10 volumetric production payment deals, under which it will hand over future output in return for cash paid upfront. The company has sold at least $4 billion-worth of its future gas production in this way, according to Argus Research.

Investors wanting to wrap their heads around the firm must also contend with the fact it placed the cash flow from certain wells into a royalty trust – a type of vehicle in which the bulk of profit has to be distributed to its owners – and sold about half its interest for $440 million. The firm is also trying to sell a 20 percent stake through a public offering in its oilfield services firm, Chesapeake Oilfield Services, for $862.5 million.

Visibility is further impeded by the firm’s over-active hedging business. Chesapeake reported realized gains on energy trading of $8.4 billion between 2006 and 2011. That’s more than four times its cumulative $1.8 billion of net income over the same period. “We don’t hedge just to say we’re hedged, we hedge to make money,” Chesapeake declared in a recent investor presentation. No gas rival trades energy on anything close to this scale, and it makes McClendon’s firm look at least as much like a hedge fund as a gas producer.

Yet despite Chesapeake’s opacity and a 20 percent-plus fall in its market value since the end of March alone, investors still seem largely to give the company the benefit of the doubt. Its market capitalization is about $12 billion. That values the company at about 11 times estimated earnings for 2012 – in line with Devon Energy, but below the equivalent ratios for EOG Resources and Encana.

By Christopher Swann

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It’s not just America’s electorate that’s at risk of campaign fatigue. At the International Monetary Fund spring meetings held this past week, the BRIC nations – Brazil, Russia, India and China – were in full campaign mode even before the ink has dried on previous increases made to their voting strength at the international lending body.

Contributing to the euro bailout fund at the IMF offers a pretext to revive the issue of power. But with developing nations expected to grow twice as fast as rich economies like the United States and Europe over the next five years, haggling over heft can be expected to become a permanent feature of future IMF and World Bank meetings.

Ever since the Washington-based lenders were established 65 years ago, debates over who held the internal balance of power generally took place only twice every decade, when new leaders were chosen. In addition, few questioned the carve-up of leadership – which gives European nations the unwritten right to pick the head of the IMF and America the World Bank chief. In recent years, however, debates over who wears the trousers at the agencies have refused to die down.

Deals on voting power were struck at the fund in 2008 and late 2010, giving developing nations more influence. The last of these – which will elevate China from the sixth largest shareholder to the third – has yet to be ratified. Yet it’s already clear this shift of votes won’t be enough to satisfy fast-growing developing nations.

Emerging countries accounted for two-thirds of global growth over the past five years, the World Bank calculates. This has made the meager voice of the likes of China, Brazil and India look woefully out of date. And the World Bank sees no let-up in this process. If, as the bank expects, poorer nations continue to outpace richer rivals, the status quo power structure at the IMF and World Bank will constantly be lagging.

By Christopher Swann The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Underestimate the elderly at your peril is the warning from the International Monetary Fund. Statisticians and economists may be downplaying the lengthening of the human lifespan. If they’re doing so by the same three years as in recent decades, the IMF reckons the cost of pensions and healthcare will be 50 percent higher than estimated. Something, almost certainly the age of retirement, will have to give.

Demographers keep expecting a slowdown in rising life expectancies that has yet to occur. In 1977 the British government was being guided by actuaries who predicted its citizens would be living to 71 on average by 2011. In fact, they now typically make it to 79. Estimates by rich-nation statisticians have generally fallen shy of actual life spans by around three years over the past several decades. Yet the number crunchers continue to forecast a stalling of the longevity escalator.

This could prove an expensive blunder. Even under the current cautious lifespan assumptions, the cost of providing a reasonable retirement – replacing around 60 percent of pre-retirement income – will double over the coming 40 years globally, the IMF calculates. Supporting armies of silver-haired citizens in rich nations, the fund believes, will gobble up 11 percent of GDP by 2050, up from 5 percent now. Most states have done precious little to prepare even for this. But assume current life forecasts are short by three years again, and the cumulative price tag rises by half again at mid-century.

Facing up to the threat might be unpleasant. The pension liabilities of the Netherlands jumped by 50 billion euros – or 7 percent of GDP – at a stroke in 2010 when the country decided to take account of even modest expected increases in lifespan. Such moves demand chunky injections of cash into private and public pension pots, which would in turn deprive the productive generations needed to support the elderly of much-needed investment in education and infrastructure.

More distress is on the way, however, unless more permanent solutions are found. Tying the retirement age – and benefits – to the escalating life expectancy is the simplest step. A few pioneers, like Denmark and Sweden, have already moved in this direction. Other nations would be wise to follow suit quickly. Delaying will only make the final reckoning more painful.