Fracking boom creates unexpected billionaires
Gregory Zuckerman's book The Frackers looks at the billionaires who got oil and gas from shale
Less than a decade ago, the major oil and gas companies said the U.S. was tapped dry.
Yet yesterday, the International Energy Agency said it would soon overtake Russia as the biggest energy producer in the world and was on the way to energy self-sufficiency by 2035.
The about-face is because of fracking, the process of getting natural gas and oil from shale, which has driven up U.S. production by 20 per cent since 2008.
The guys behind fracking are not engineers or geologists, but a group of maverick American independents who insisted that the U.S. still had energy to give.
“It’s not the people that you expected, the Exxons and the Chevrons of the world,” says Gregory Zuckerman, the author of The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters.
Zuckerman, a Wall Street Journal reporter, looked into the stories of people such as Howard Hamm and the late George Mitchell who solved the mystery of how to get oil and gas from shale.
“They’re the ones who made the technological innovations. They're the ones faced the backlash over the environmental cost,” Zuckerman said in an interview with CBC’s Lang & O’Leary Exchange.
“So a lot of trial and error — they got things wrong for a while, in both production and the environment. They’ve improved on both.”
Howard Hamm's rags-to-riches story
Hamm is genuine rags-to-riches story, raised dirt poor in Oklahoma by parents who kept him out of school until Christmastime every year, so he could help them pick cotton. Today, he’s worth about $14 billion US on money earned from his Continental Resources.
“He didn’t go to college, he didn’t study geology or engineering, he took some courses along the way, but he’s sort of a self-made man and he believed that we could in America tap the North Dakota area – the Bakken, which turned into a windfall for him and for the country in oil production,” Zuckerman said.
While the major oil companies were looking for new reserves in Asia and Africa, Hamm and Mitchell had to make something work in the U.S. or go broke, he said.
“The Exxons of the world have raced back to America. They believe in shale now, Exxon for one spent $41 billion to buy one of the pioneers in shale production. So it’s very much changed, there was an opportunity though for small guys independents, several years ago,” Zuckerman said.
Environmental problems
The success of fracking has come with numerous environmental problems, including spills, chemicals in the water table and harmful emissions.
The poor areas of North Dakota and Texas where gas was found have seen an unprecedented land rush, and an influx of people in search of work, which has raised crime and rents in formerly sleepy communities.
Meanwhile, a handful of people became billionaires, including Hamm, Mitchell, Aubrey McClendon and Mark Papa.
As the majors move into the technology, they have improved their environmental record, Zuckerman said.
“When you talk to the experts, scientists, they all say fracking can be done safely, but that doesn’t mean it is being done that way or will be,” he said.