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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