Monday, June 12, 2017

The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters

Book Review: The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters – by Gregory Zuckerman (Portfolio/Penguin, 2013, 2014 – kindle ed.)

Good title for this one. It shows the risk-taking, innovative entrepreneurialism, the hard work, and sometimes the sheer greed that made some of these guys richer than they deserve to be. Well that might be debatable as many industries now make billionaires but even we moderates see the sheer absurdity of the current level of income inequality as a basic unfairness. This is also a great technological detective story showing how these pioneers succeeded in getting more oil and gas out of rock, particularly shale. He also goes into significant detail about the upbringing and various life situations of these entrepreneurs.

In the beginning Zuckerman points out the big changes provided by fracked shale gas and oil: cheap energy, energy dependence, jobs, cheap electricity, decreasing our trade deficit, and decreasing U.S. carbon emissions. 

This book tells the stories of certain key individuals in developing fracking with horizontal drilling of source-rock shale. 300 interviews of 50 key players were used. 

The story begins with now multi-billionaire Harold Hamm and the 2007 IPO of his Continental Resources, on the verge of developing oil from horizontal drilling and fracking in North Dakota’s Bakken shale. This would make him one of the richest humans in the world and later an energy advisor to presidential candidates Mitt Romney and Donald Trump.  

Aubrey McClendon, co-founder of Chesapeake Energy, would enter the multibillionaire ranks in 2008. In 2016 he would drive his SUV at high speed into a wall, killing himself, amidst an industry downturn and allegations of rigging lease costs. In 2008 the fracking revolution had not yet begun in earnest but it was about to be unleashed.

George Mitchell at Mitchell Energy and his engineers and geologists were the main first enablers of the ‘high-volume hydraulic fracturing’ in the Barnett shale in the late 1990’s. Devon Energy would buy Mitchell and combine the technique with horizontal drilling, which took off in other oil and gas plays in the mid 1990’s. Mitchell’s goal was simply to figure out a way to supply gas for his contractual obligations. The whole U.S. gas supply was looking bleak and by the mid-2000’s it looked like we would be importing substantial quantities of expensive gas from overseas as countries like Qatar and Russia were attempting to form a natural gas cartel along the lines of OPEC. 

George Mitchell’s early life is recounted. His father was a Greek immigrant who laid train track. George was able to attend college and study geology and petroleum engineering and was a good student. After graduation he worked in the oil fields a bit but then he and his brother Johnny began studying well logs and building prospects to drill wells. Eventually they found investors, drilled, and built reputations for finding oil and gas. Johnny was a good promoter of the deals. They took a chance on an area near Fort Worth, Texas known as the “wildcatter’s graveyard.” They had some success with a stratigraphic trap there in different rock formations. This was in the early 1950’s. Soon they would add the then newly developed technique of hydraulic fracturing to increase well production. By the late 1950’s this area in Wise County, Texas became Mitchell’s most important field. Johnny pursued other interests and George came to run the company. After a major gas pipeline was built from the Texas northern panhandle to Chicago, Mitchell was able to get a 20-year contract to sell gas at slightly higher than market prices – a lifeline for the struggling company. The deal was renewed in 1977. George and his wife Cynthia had ten kids! He was an avid tennis player. He met R. Buckminster Fuller and was inspired. He became an advocate of renewable energy and city planning. He hosted conferences with Fuller and other futurists and sustainability advocates. Worried about urban decay he bought 15,000 acres of land 27 miles north of Houston for a planned city. His bankers were against it and thought it would be a loss but he persevered and The Woodlands as it would be called became a mixed income development with trees galore. The Woodlands opened in 1974. By the late 70’s it became apparent that the gas committed to the Chicago-bound pipeline would decline below commitments in about 10 years so new sources were sought. One was in the Clinton formation in southern Ohio. That didn’t add much and was eventually bought by a company I was working for so I know its details quite well. Another area in the Rockies had the same fate. In the late 70’s and early 80’s the Department of Energy’s Eastern Gas Shales Project had determined that shale source rocks (shale is the source rock for oil and gas) contained substantial amounts of hydrocarbons but they could not be unleashed except in a few places where there was significant natural fracturing. Exploration for hydrocarbons in shale had been quite disappointing overall even though there were indications that the hydrocarbons were there. In 1981 Mitchell drilled his first well in the Barnett Shale. The results were fair to good. In the early 90’s as Mitchell’s gas supply situation began to look dire they tried ‘massive fracs.’ They were OK but not at all great and expensive. 

By 1996 other companies, geologists, and engineers were getting interested in the Barnett Shale. One was Ray Galvin, an executive at Chevron. He sensed a breakthrough in developing ‘unorthodox rocks’ or as in what would become known as, ‘unconventional’ oil and gas plays. 

He next goes back to 1993 and early successes with horizontal drilling. Harvard MBA grad Robert Hauptfuhrer and his company Oryx Energy had been pioneers in these early successes. He had started at Sun Oil. Sun was involved with some very early ‘short-radius’ horizontal drilling. One early success was downplayed and shut-in so that leases could be secured before their value shot up. Sun Geologist Kenneth Bowdon found out from the hushed production department and foresaw that the technology would become ‘disruptive.’ The author then digresses into a history of drilling technologies and exploration techniques. Horizontal drilling offers the best optimized reservoir access. Sun began drilling the Austin Chalk formation with horizontal wells in 1986. The wells were prolific oil producers. Sun spun off its exploration segment to Oryx in 1988 and horizontal Austin Chalk wells would be developed with good success for a decade or so. Some areas are just recently being re-evaluated. In the mid-90’s as Austin Chalk wells played out Oryx would test several shale plays with horizontal drilling without fracking, including the Barnett and came up with fair but uneconomic results in a time of low oil prices. Fracking was needed to unlock the low permeability shales. In 1998 Oryx was bought by Kerr-McGee. 

By 1993 George Mitchell’s town development, The Woodlands, Texas, had 36,000 residents. Mitchell grew wealthy from his energy company, especially from supplying gas to Chicago at above-market prices. His real estate deals and philanthropic gestures were losing money. Mitchell, now 75, ceded some decision-making power to former Exxon exec Bill Stevens who became president and COO. Stevens and George’s son Todd Mitchell both had doubts about the Barnett. Nick Steinsberger was appointed to head Barnett fracking in 1995. At the time the Barnett was unpopular in the company. By 1995 Mitchell lost the price advantage to Chicago. After a mixing problem at a frac job Steinsberger noticed that the unintentionally watery fluid with less gelling produced better results than most. He also heard more about successes with water-fracking with less gels and decided to try a ‘slick-water’ frack as he called it. With more water and less gels and chemicals it would be cheaper too. The first results were OK but not impressive. Mitchell Energy sold The Woodlands in 1997.

Meanwhile at Chevron Ray Galvin and geologist Kent Bowker were trying to succeed fracking tight rock and shale. Galvin had to take his mandatory retirement at age 65 but Bowker pressed on studying Mitchell’s early efforts. He calculated that Mitchell vastly underestimated the reserves in the deep and high-pressured Barnett Shale. Bowker left Chevron and got hired by Mitchell Energy to work on the Barnett. However, Stevens told him the Barnett was going to be abandoned. George Mitchell was still excited about the Barnett. Bowker joined Steinsberger and Dan Steward’s group. Steinsberger noticed that the slick-water fracs showed less production decline than the gel fracs. He added higher pumping rates for the slick-water fracs. It was thought that water fracs would cause the clay component of the shale to swell which impedes flow. This turned out not to be true in the Barnett as its clay content is low and the pressure high. The high silica content made it more brittle and able to induce more fractures. By 1998 the slick-water fracs were economic and prolific producers. The gas price was still low but by early 1999 Mitchell’s stock began to increase in value as the new wells continued to be successful. However, the company was deep in debt due to years of low gas prices and unprofitable real estate deals. Mitchell tried to market the company in 1999-2000 especially for its newly valued Barnett reserves but could not find a buyer. The first Barnett Shale industry symposium was held in 2000 as increased well production made it clear the Fort Worth Basin was a major shale gas basin. Mitchell was sold in late 2001 for the hoped for price to Devon Energy. By 2013 the Barnett region would become the nation’s largest onshore gas field (but not for long as the Marcellus would soon overtake it). George Mitchell still advocated for renewable energy as well as for responsibility for environmental protection by oil and gas companies. He had paid millions in a water contamination case years before.

Chesapeake’s Aubrey McClendon and Tom Ward were not sure about shale but were excited about horizontal drilling. As more gas power plants were built they foresaw and increase in gas prices. Ward was a degreed petroleum land man and started out leasing acreage near promising production at slightly higher rates. He began drilling a few wells on his own too. He moved to Oklahoma City and noticed someone else was employing a similar strategy – Aubrey McClendon. McClendon started at Kerr-McGee as Kerr was his mother’s uncle. Aubrey was sharp, competitive, an avid reader, and liked to party a bit. He went to Duke University where he would meet friend and future financial collaborator, controversial energy banker Roger Eads. McClendon had studied accounting but found that the land aspect of oil & gas was his interest. The mid-late 80’s brought a huge downturn in the energy industry due to oversupply and low prices. McClendon set himself up as an independent land man leasing to flip to bigger companies. He and Ward bumped up against each other and decided to join forces. Six years later in 1989 they would form Chesapeake Energy. They developed a reputation for acquiring good acreage, for cutting costs among suppliers and service companies, and for being slow to pay – even though they were upfront about it. However, they were trying to balance their books before going public with an IPO and debt was a big issue so they asked their contractors to wait. Chesapeake went public in 1993. Zuckerman also gives an account of Chesapeake being sued by Harold Hamm and others for an unpaid drilling bill. They lost and it caused their share price to drop. 

Chesapeake embraced 3D seismic and horizontal drilling and began drilling in the Texas Austin Chalk getting some great wells in 1994. They leased massive amounts of acreage in Louisiana to extend the Austin Chalk play but those wells declined fast and produced too much water. That area is being cautiously revisited today with new understanding and technology. By 1999 Chesapeake was heavily in debt and devalued due to low gas prices. 

McClendon and Ward were betting on higher gas prices in the future as more gas power plants were built while Harold Hamm and his Continental Resources were betting on oil prices to rise. Like Ward, Hamm grew up poor, was religious, and developed a strong work ethic.  

In 1994 Burlington Resources was getting some success drilling tight rock with horizontal wells in North Dakota. Shell was doing the same in nearby Saskatchewan in Canada. Hamm and geologist Jack Stark decided to lease over an anticline in the Williston Basin of North Dakota near the border of Montana. The early wells in the Red River B formation were successful oil producers but by 1998 the oil price had dropped very low. Hamm organized an industry group then to promote domestic oil and oppose OPEC price controls. It didn’t work but OPEC did respond so Hamm considered it a useful ‘warning shot.’ By 2000 Hamm and his geologists wanted to try drilling horizontally in other formations, notably the Bakken Shale in North Dakota.

Also in 2000 Lebanese immigrant Charif Souki began considering that the U.S. was running out of natural gas and wanted to invest in building import terminals for liquefied natural gas (LNG). Through his previous and other businesses he had developed connections to capital from powerful and wealthy people in the Middle East. He began to invest in oil and gas in the mid to late 90’s. He started Cheniere Energy in 1998, originally to drill wells in the Gulf of Mexico but the few wells drilled were not very economic. The idea for building LNG import terminals rested on a belief that natural gas prices would rise due to inadequate domestic supply. 

Meanwhile McClendon and Ward decided to focus on buying acreage before others in anticipation of better future gas prices. They would also buy other companies. They would bid high seeing future value. They entered Oklahoma’s Anadarko Basin in 2002. By 2003 Chesapeake was the 8th largest gas producer in the U.S. They were petroleum land men, an occupation unique to the U.S. since it is the one of the only countries where individual landowners have mineral rights. However, their initial acreage buying spree did not include shale. By 2003-2004 Devon and especially a company called Hallwood Energy was combining both horizontal drilling and high-volume slick-water fracs in the Barnett Shale with economic success. In 2004 Chesapeake bought Hallwood for $300 million, entering the Barnett rather late. Acreage buying there was competitive and Chesapeake began holding town hall meetings to both educate the public and get big chunks of acreage. McClendon’s charm was noted and he became a Wall Street darling. Competition for acreage in the Barnett was the beginning of the “land grab.” When Southwestern Energy discovered gas in the Fayetteville Shale in Arkansas in 2004 Chesapeake went all out to grab acreage early in that game. Controlling the land one controlled the resource, said McClendon. 

Continental and two other small companies, Headington and Lyco were producing economic Bakken wells in 2003, mostly in Montana. Continental acreage was mostly the edges of the field but they had lots of it and the wells were economic. 

Souki looked for a place to build an LNG import terminal and settled on the Gulf Coast due to cheap land and pro oil & gas sentiment. However, it was pointed out to him that the area was already a natural gas hub and more imports there could drop prices if the gas couldn’t be moved fast enough to where it was needed. By 2002 Cheniere was having financial problems. They would also have to raise billions of dollars to build the facilities and were having trouble finding backers and equity. Souki eventually went to contacts in the Middle East. He tried to convince Qatar to supply gas as they produced one of the biggest gas fields in the world and had export facilities but they would not agree thinking the U.S. did not need the gas and 4 other import terminals built in the 1970’s. Cheniere finally got a $4 million dollar deal to start building an import terminal at Sabine Pass, Louisiana but now only retained 40% of the project. 

In 2005 Chesapeake bought Columbia Natural Resources, based in Charleston, West Virginia for $2.2 billion. Their acreage stretched from New York to Alabama. They now had $5.5 in debt due to their acquisitions. McClendon and Ward were also unusual in that they were commodities traders in natural gas. They made handsome personal profits this way. Also, like some other energy executives, they had the choice of investing personally in each of the company’s individual wells. Some of their activities were borderline conflict of interest, even borderline insider trading. Ward and McClendon even started a hedge fund in 2004 to trade various stocks and commodities. McClendon was getting quite wealthy and owned scores of mansions and homes, and developments with hotels, golf courses, etc. He had an impressive antique map collection and a massive wine collection with some individual bottles worth a hundred grand. He owned yachts, cattle and feedlots, and had his own personal staff of accountants. Ward owned many similar things but was perhaps less flaunting than McClendon, having grown up poor and being very religious. They were both philanthropists but McClendon preferred the spotlight in that regard.

After Hurricane Katrina in August 2005 natural gas prices spiked to new records. Chesapeake continued their buying spree and their drilling spree. However, it became too much for Tom Ward and he unexpectedly resigned in early 2006. 

Hamm and Continental moved to test the Bakken in North Dakota but early results were not great and they had problems with water production. They tried and failed to sell part of their acreage in 2005. Meanwhile in the same year EOG Resources picked up nearby Bakken acreage in North Dakota. Though the first well was a dud, the next ones were excellent and they ramped up with more rigs on their new stealth oil play. 

McClendon, now without Ward, continued to spend and acquire new opportunities, making Chesapeake’s board of directors more uncomfortable with the accruing debt. McClendon courted Wall Street bankers including his college buddy Roger Eads, to get more financing commitments. At this time in 2007-2008 McClendon became a public cheerleader for natural gas, extolling it as a clean form of energy that could be expanded to run power plants and even as a transportation fuel. Chesapeake entered Louisiana’s Haynesville Shale play in 2007 when gas prices were fair to good but acreage prices were competitively high as the value of plays had become recognized.
Meanwhile by 2007 Tom Ward created a new company, SandRidge Energy and bought acreage in West Texas and well interests from billionaire investor Carl Icahn, who also took a piece of SandRidge as part of the deal, although he had been critical of Chesapeake’s reckless spending spree. In late 2007 SandRidge had a very successful IPO and Icahn divested his shares at a handsome profit.
In the Bakken EOG was using a new fracking technique of plugging off each frac stage so that the induced fractures would go where they wanted them to go rather than toward the heel of the well. This new multi-stage frac technique was a success. This would become the standard technique. Years later the frac stages would be spaced closer with more sand and water pumped in each stage for even better results.

Charif Souki’s idea of importing gas was looking more valuable in 2006 as domestic natural gas supplies were beginning to seem inadequate for increasing future demand. He decided to expand the size of the Sabine Pass terminal. However, in 2007 it was noted that U.S. gas production was growing and some of that growth was coming from shale. Cheniere’s share prices would plummet to junk status in 2008 and it looked like the company would not make it. Meanwhile, EOG CEO Mark Papa determined by 2008 that gas was actually headed for a glut due to all the new producing shale gas regions. He decided to refocus the company on oil and slow down on gas. He turned out to be right. McClendon was coming to a similar conclusion in mid-2008 amidst the first signs from the housing markets of the coming financial crisis. Chesapeake now had 13 million acres and plans to drill tens of thousands of wells and McClendon was a multi-billionaire. The company had accrued $11 billion in debt. They needed gas demand in order to pay off that debt. New gas plays like the Haynesville and the Marcellus (which would become the biggest and most economic) were emerging. Chesapeake decided to sell off packages of less valuable acreage in some plays to focus on getting good spots in emerging plays. Gas production was clearly growing in 2008 but prices were still high. 

Papa and his future replacement and oil advocate Bill Thomas were working on finding new oil plays in shale, locking up acreage quietly and keeping information under wraps. One of these stealth plays would be the Eagle Ford Shale in South Texas. 

Geologist Bill Zagorski of Range Resources convinced his bosses to test the Marcellus Shale in 2004 as an analog to the Barnett Shale successes. By 2007, the results were getting better and better. Penn State professor Terry Engelder began to promote the play as possibly the nation’s largest gas field due in part to its sheer size. Cabot Oil & Gas began to get monster-sized wells in Susquehanna County, Pennsylvania, an area with no previous gas fields. This area of Northeastern Pennsylvania had some geological issues with shallow gas just below groundwater aquifers and sometimes gas would migrate into nearby water wells. This along with increased truck traffic, spills, and the more industrial nature of the larger operations led to public backlash against “fracking.” 

Meanwhile Chesapeake share prices were dropping amidst the sell-offs. McClendon had borrowed too much money and his shares were being sold by his creditors to cover his personal debt. This would drop share prices further. A few other indebted energy executives were also forced to sell much of their shares. Tom Ward’s SandRidge also lost 50% of its stock value and Ward, now one of the country’s richest men lost a billion dollars. He sold his interest in wells back to the company and some investors saw this as unethical. In 2009 Chesapeake’s board agreed to bail McClendon out with a $75 million bonus and other compensation for increasing the assets of the company previously. This was seen by many as unfair, perhaps not unlike the big Wall Street bonuses paid after the government bailed them out due to the financial crisis. Lawsuits were even filed in protest. The fracking revolution was still picking up during the economic downturn so that the oil and gas industry kept going fairly strong likely helping out the other ailing sectors. As things picked up McClendon and Chesapeake went back to buying acreage in new shale plays for gas and oil like the Utica in Ohio, the Mississippi Lime in Oklahoma, and the Niobrara in Colorado and Wyoming. Ward and SandRidge shifted more to oil, often conventional oil. 

Beginning in earnest in 2009 the anti-fracking movement took off in response to increased gas in local groundwater wells mainly in Northeastern Pennsylvania. Other issues were spills and increased truck traffic. Early in the year people like Carl Pope of the Sierra Club and environmentalist Robert F. Kennedy Jr. were touting the advantages of natural gas as a ‘bridge’ fuel as was McClendon. Oil magnate T. Boone Pickens had plans for wind turbines in Texas and McClendon and he both sought compressed natural gas as a vehicle fuel. But these ideas would proceed slowly. Sierra Club and Kennedy soon reversed their stances toward gas in response to new environmental concerns. In 2010 the controversial anti-fracking propaganda movie Gasland would be out, spurring the movement.
It was Aubrey McClendon in 2009 that would call Cheniere’s Charif Souki and ask him if they could do liquefaction at Sabine Pass to export gas rather than the plan to import it. They soon met and it became clear to Souki and his executives that gas production would continue to increase and at levels that would provide excess that could be exported in order to help stabilize prices. 

In 2010 Mark Papa and EOG Resources would formally announce the discovery of the Eagle Ford Shale trend in South Texas, a field rivaling North Dakota’s Bakken in oil reserves. With both the Bakken and the Eagle Ford, noted Papa, domestic oil production would be revived. It soared and by 2014 the U.S. overtook Russia and Saudi Arabia as the world’s largest oil producer. In 2011 and 2012 several of the global oil & gas majors would enter the game late. France’s Total SA and Norway’s Statoil would buy into the individual plays of companies like Chesapeake. That began in 2009 and was a lifeline to stave off accumulating debt. Other companies sold to the majors. Exxon bought XTO Resources. Shell bought Appalachian producer East Resources. BP and BHP Billiton got in the onshore shale game. Billions of dollars also went to land owners who leased their property for drilling and shared in the royalties of the wells.

Along with the Gasland movie 2010 also had the BP Deepwater Horizon blowout that helped to spur anti-oil & gas sentiment. Environmentalists complained about fracking chemicals since some were considered proprietary and kept hidden. However, several companies beginning with Range Resources began releasing all the chemicals used to frac wells. Actually, the chemicals are so dilute that they are much less of a problem than the waste-water itself. Many were benign. There was just so much waste-water produced especially as frac jobs got bigger. Water management and recycling would become the trend later.

Also in 2010 Hamm’s Continental began drilling 4 wells from one pad, something that was happening elsewhere as well and began in the Rockies with slanted wells. This reduced per-well costs. Other innovations would come in the next five years: even more wells per pad, multiple formations per pad, longer laterals, tighter-spaced frac stages, higher pumping rates and water volumes, more sand proppant per stage, and various things like better bits that increased drilling efficiency. Continental added the Three Forks formation as another oil producing horizon in their Bakken area. In 2011 estimates of recoverable oil reserves began to increase. The same would happen for gas plays. The new innovations were making better wells and cheaper wells. The North Dakota oil boom was now thriving. By 2010 domestic natural shale gas production was more than double what it was in 2008. 

In 2010 hedge funds were actually betting that Souki’s plans to import gas would fail. He pitched his plan to export in April and a public announcement was made in June. He would have to raise about $12 billion. In 2011 they received the federal permits for the U.S.’s first LNG export facility. Sabine Pass would finally be exporting its first gas in February 2016 and should have all 4 trains running by the end of this year – 2017. 

Meanwhile Aubrey McClendon was preaching energy independence for the U.S. and the new Utica Shale play in Ohio. Carl Icahn had bought 6% of Chesapeake’s shares when the share price was low and sold later pocketing $500 million in profit. By 2012 though gas prices tanked due to oversupply and lack of pipeline capacity in some areas. Even Chesapeake announced a shift to oil as oil prices were still quite high. McClendon had other troubles from personal loans to cover his stakes in wells. The SEC opened a probe. In May 2012 McClendon was forced out as chairman of the board but remained CEO. The stock price was low and Carl Icahn again bought in. He told McClendon he would have to sell assets. Meanwhile Ward was selling a lot of his SandRidge shares. Investors were also concerned that Ward’s compensation was too high relative to the size of the company. One of SandRidge’s major investors after reviewing public records concluded that Ward was “incredibly greedy.” The stock performance was disastrous.

Meanwhile Cheniere was raising money and contracting for gas export sales guarantees, typically 20-year contracts. By 2013 Cheniere’s share prices were rising and Souki resumed or rather stepped-up his high-class lifestyle. Also in 2013 EOG’s stock was soaring. Mark Papa retired and Bill Thomas became CEO. In 2016 Papa would start a new venture in the Permian Basin of West Texas and New Mexico. George Mitchell was still keen on clean energy and making fracking safe and environmentally responsible. His sons had a new company, Alta Resources, investing in the Marcellus and elsewhere. George died in 2013. Harold Hamm got enormously wealthy with him and his wife – soon to get a billion dollar divorce settlement – having $11 billion worth of company stock. Hamm would become an energy advisor to 2012 presidential candidate Mitt Romney and then to Donald Trump in 2016. Continental would find more oil in the SCOOP play in Oklahoma. McClendon was ousted from Chesapeake in early 2013 but went on to raise several billion for ventures in various plays starting new companies like the short-lived American Energy Partners until his suicide in early 2016. He had raised $10 billion for new ventures by mid-2014, just before the beginning of the huge downturn that would last two years and cause 400,000 direct job losses. In 2013 he even fell off Forbes’ billionaires list. Just six weeks after McClendon was out Tom Ward was also ousted from SandRidge. He would start a new venture, Tapstone Energy in 2014, buying acreage from Shell in the Mississippi Lime play in Oklahoma. 

Europeans and others around the world have had energy supply concerns for years and that is likely one reason for the push toward renewables. Importing gas from Russia, Qatar, or oil from the Middle East is wrought with uncertainties and geopolitical implications. U.S. LNG might help. Europe just began importing gas from Sabine Pass here in 2017 with Poland, the U.K., France, and the Netherlands on board. Poland tried and failed – due to geology and depth among other things – to develop their own shale gas. Now they are importing from the U.S. in a strong and now successful push to divest from dependence on Russian gas. The U.K. is very cautiously beginning to develop their shale gas while France like the states of New York, Maryland, and Vermont, and some Canadian provinces, has banned fracking. Only China and Argentina have had some success with fracked shale plays. China has not ramped up as much as planned. Russia has yet to tap its large shale oil reserves. The U.S. was massively advantaged in this endeavor due to pipeline and facilities infrastructure, technology, equipment and skilled personnel, a mineral rights system that favors land owners, and the entrepreneurial spirit that this book is about. 

A few trillion dollars have been invested in renewable energy globally but that has made little impact since fossil fuels still produce well over 80% of global energy. In 2014 the U.S. overtook Russia as the world’s largest oil & gas energy producer. Fracking had done magintudes more in energy production in less than ten years than renewables did in fifty. Opposition to drilling and fracking, and more recently pipelines has continued and many projects have been delayed. Obama implemented new rules through executive order on federal lands, methane emissions, clean power mandates for power plants, etc. Most of these have been rolled back in the initial months of the Trump administration. New wells in the Permian Basin would be the most sought economic oil play beginning amidst the downturn in 2014 and picking up significantly with the recovery in mid-2016.

In 2013 Charif Souki was the highest paid CEO in the nation. He too would be ousted – like McClendon and Ward, essentially for greed – and as of 2016 started a new company with LNG exporting in mind. Hamm was considered by Forbes to be in the top 20 richest people in the world.

This book along with Russell Gold’s The Boom are probably the two best and most detailed books on the fracking revolution, this one being the best, especially from the business perspective.

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