Jim Chanos and David Einhorn are betting against the same sector

Jim Chanos says he's bearish on one sector - hydraulic fracturing.

"We remain bearish on the business model of the North American exploration and production companies,"
the short-seller said during a panel at the Evidence-Based Investment Conference in New York City on Tuesday.

"Whether at $100 oil and $4 natural gas, or half of those prices-the US frackers generate no free cash flow. Higher production, lower production-it doesn't matter," Chanos told Business Insider following the panel, which I moderated.

Hydraulic fracturing, you might recall, is the process of extracting oil or natural gas from shale by injecting water and chemicals into the rock and breaking it apart. The technology drove an oil-production boom, but many of the explorers depending on this have struggled as oil prices slumped.

Shares of the companies have leveled off this year, after plunging from mid-2014 highs.

On his bearish outlook for the stocks, Chanos said he agrees with fellow hedge fund manager David Einhorn of Greenlight Capital.

Last year Einhorn presented the sector as a short opportunity at the Sohn Investment Conference. He called them 'Motherfrackers' and specifically zeroed in on one company, Pioneer (PXD).

"We object to oil fracking because the investment can contaminate returns," he said at the conference.

Einhorn confirmed to Business Insider that he remains bearish on the sector. Here's Pioneer's stock, which has rebounded sharply in 2016.