D. Dowd Muska

 

The Men Who Killed ‘Energy Dependence’

November 21, 2013

“[I]f you’re young and not attached, it’s a great place to make some money … but you’re cold and alone and you work your butt off. You can’t do that forever.”

Liz Irish, her husband Matt, and their two girls make only a brief appearance in Gregory Zuckerman’s The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters (Portfolio/Penguin; 404 pages; $29.95). Their story serves as a trifling exception to an energy phenomenon that is radically changing the nation and the world.

When the Great Recession reduced their finances to nearly nothing, the Irishes left Oregon for North Dakota. Matt got a high-paying job driving a truck in the oil-rich Bakken, and for a time, the future looked bright. But Peace Garden State winters are beyond brutal, and living amidst cussing, daughter-propositioning roughnecks was creepy. A tiny apartment in Williston cost $2,100 per month. The family changed its mind, and according to Zuckerman, “they’re thrilled to be in Oregon once again.”

The Irishes decided that the shale industry wasn’t for them, but for millions of others, fracking has provided lucrative employment, dangled fabulous investment opportunities, secured impressive royalty incomes, and, occasionally, created billion-dollar fortunes.

The Frackers profiles the men -- yes, they are all men -- who had the insight, drive, and recklessness to turn long-disparaged “plays” such as the Bakken, Barnett, and Eagle Ford into hydrocarbon superpowers. George Mitchell, the son of a penniless Greek immigrant, was the pioneer. His company accessed a huge natural-gas deposit in the Dallas-Fort Worth region. Aubrey McClendon, a scion of “true Oklahoma and energy nobility,” built Chesapeake Energy into the second-largest gas producer in the nation, but lost his company and much of his wealth. His partner, Tom Ward, would leave Chesapeake to found SandRidge Energy, only to be ousted in a fashion not dissimilar from McClendon’s firing. Harold Hamm, born dirt poor, refused to believe that America had run dry. His Continental Resources is now a top-ten petroleum producer. Mark Papa, who headed up the remnants of Enron’s oil-and-gas unit, bet on shale and made investors in EOG Resources very, very happy. Charif Souki, a jet-setting Lebanese immigrant with zero experience in energy, found the funding to construct a receiving terminal for liquefied natural gas (LNG). Eventually he came to understand that the shale boom had reversed his business model -- he wasn’t an importer, but an exporter.

Some frackers amassed, and retained, ludicrously large treasures. (Hamm’s net worth is $12.4 billion. His soon-to-be-former wife could walk away from their marriage richer than Oprah.) Others obtained huge stock portfolios that withered during 2008’s financial crisis.

Its human element is unquestionably compelling, but The Frackers supplies readers with something more valuable: a warning against the dangers of groupthink.

If ginormous amounts of oil and gas remained beneath U.S. territory at the dawn of the 21st century, why didn’t the “majors” go get it? Again and again, Zuckerman notes the condescension “Big Oil” directed toward independent drillers. By the 1990s, he writes, “most of the biggest exploration and production companies had left the country.” Exxon, Chevron, and their ilk believed moonbats’ media-driven nonsense that the U.S. was tapped out, and thus shifted attention to Africa, Asia, and South America. Likening the domestic resource base to a “booby prize,” Zuckerman translates the message not-so-subtly conveyed to the homeland’s small fry: “Here you go, guys, the country’s all yours. See if you can find anything.”

A small band of geologists and engineers, backed by gutsy executives, did. But not by using conventional methods. Through relentless trial and error, horizontal drilling and hydraulic fracturing -- today lumped together as “fracking” -- evolved, then joined forces, to profitably coax natural gas and petroleum from deep underground. Also lending a hand was “an improved mapping technique called three-dimensional seismic imaging.” The tools, the technology, privately owned mineral rights, and go-for-broke wildcatting. Few saw the revolution coming. But it arrived, almost overnight. And it’s helping to toss “peak oil” into the same dustbin that contains “overpopulation” and “climate change.” 

“The successes of the architects of the shale era,” Zuckerman concludes, “are attributable to creativity, bravado, and a strong desire to get really wealthy. It doesn’t get more American than that.”

Fracking has fostered cheaper power and heat, hundreds of thousands of new jobs, a revitalized manufacturing sector, less air pollution, more tax revenue, and the imminent waterloo of the energy-security lobby. It’s worth spending a few hours acquainting oneself with the visionary and maverick workaholics who made it all possible.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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