This skewed perspective applies to Mitchell, the entrepreneur. For decades, geologists knew that huge reservoirs of natural gas and oil lay trapped in tight shale rock. The consensus was that tapping these supplies was too expensive. Mitchell rejected the consensus. By the early 1980s, his own medium-sized company — Mitchell Energy & Development Corp. — faced shrinking reserves of conventional natural gas. If shale gas could be made to pay, his supplies and the company’s value would multiply dramatically.
Success took roughly two decades of trying different mixtures of highly pressurized water, sand and chemicals to split seams in the shale and release the gas economically. But once Mitchell proved this, a bonanza ensued. From 2005 to 2012, U.S. natural gas production, which had been slowly declining, rose by one- third. Similar techniques of “fracking” and “horizontal drilling” — turning the drill pipe sideways along energy-bearing seams — were applied to oil with equally spectacular results.
“In just the last two years, oil production . . . has increased by more than 2 million barrels per day (and 37 percent), from 5.52 million bpd [barrels per day] in July 2011 to 7.55 million bpd,” writes economist Mark Perry of the University of Michigan. The production surge, he says, equals “the entire oil output . . . of Brazil” and erases the output drop of the previous two decades.
Our world has been upended. U.S. oil and natural gas imports are falling. Cheaper energy is helping U.S. manufacturing, especially petrochemical plants using natural gas as an input. By one (industry-financed) study, the oil and gas boom and its side effects have added 1.7 million jobs. To be sure, fracking raises environmental concerns, mainly involving the disposal of wastewater. Indeed, Mitchell advocated “sensible” regulation of these side effects (also, interestingly, his family foundation has focused on coping with global warming). But whatever shale gas’ drawbacks, they are dwarfed by the benefits.
It’s been argued — mainly by the Breakthrough Institute, a think tank — that Mitchell’s role is overblown and that federal-research advances into “geologic mapping,” fracking and horizontal drilling underpinned his success. These helped, but the argument’s weakness is that the same information and technologies were available to other oil companies, including better-financed “majors” (ExxonMobil, Chevron and the like), and none managed his feat. In truth, most “experts” considered what Mitchell did to be impossible. This included much of his staff. “My engineers kept telling me, ‘You are wasting your money, Mitchell,’” he recalled to Forbes in 2009.