The Boom: How Fracking Ignited the American Energy Revolution and Changed the World

by Russell Gold

  Everything you ever wanted to know about cow emissions of natural gas can be found in the study “Model for Estimating Enteric Methane Emissions from United States Dairy and Feedlot Cattle,” cited below.

  Information about US natural gas usage is from Trends in U.S. Residential Natural Gas Consumption, published in June 2010 by the Energy Information Administration. I read several papers and Schlumberger publications on its isolation scanner, including “Ensuring Zonal Isolation Beyond the Life of a Well” by Mario Bellabarba, Hélène Bulte-Loyer, Benoit Froelich, et al. in the Spring 2008 issue of Oilfield Review.

  Bartlit Jr., Fred H. Macondo: The Gulf Oil Disaster—Chief Counsel’s Report. Washington, DC: US Government Printing Office, 2011.

  Bureau of Ocean Energy Management, Regulation, and Enforcement. Report Regarding the Causes of the April 20, 2010, Macondo Well Blowout (September 2011). Joint Marine Board report by US Coast Guard and BOEMRE.

  Cooke, Claude E. “Fracturing with a High-Strength Proppant.” Journal of Petroleum Technology 29, no. 10 (October 1977): 1222–26.

  ———. “Radial Differential Temperature (RDT) Logging—A New Tool for Detecting and Treating Flow Behind Casing.” Journal of Petroleum Technology 31, no 6 (June 1979): 676–82.

  Gold, R., and Ben Casselman. “Cementing, Mainstay of Oil Drilling, Is Prone to Failure.” Wall Street Journal, October 30, 2010.

  Legends of Drilling (CD-ROM). Houston: Society of Petroleum Engineers, 2009.

  Legends of Hydraulic Fracturing (CD-ROM). Houston: Society of Petroleum Engineers, 2010.

  Meyer, Andre J., and Claude E. Cooke Jr. “Application of Radial Differential Temperature (RDT) Logging to Detect and Treat Flow Behind Casing.” Paper presented at SPWLA 20th Annual Logging Symposium, June 3–6, 1979, Tulsa.

  Moore, L. P., J. E. Jones, S. H. Perlman, and T. A. Huey. “Evaluation of Precompletion Annular Gas Leaks in a Marcellus Lateral.” Paper presented at SPE Americas Unconventional Resources Conference, June 5–7, 2012, Pittsburgh.

  National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling—Report to the President. Washington, DC: US Government Printing Office, 2011.

  Chapter 13: Pandora’s Frack

  Most of the details of the Perot Museum of Nature and Science come from my visit a couple weeks after it opened. I also exchanged emails with Arne Emerson, a principal at Morphosis, the architecture firm that designed the building, about the inspiration of the design.

  The “insurgency” quote is from a CNBC segment titled “Oil Executive: Military-Style ‘Psy Ops’ Experience Applied” by Eamon Javers and is available at www.cnbc.com/id/45208498. (Last accessed January 2013.)

  The Stanolind researcher’s use of hydrafrac treatment, see J. B. Clark, C. R. Fast, and G. C. Howard, “A Multiple-Fracturing Process for Increasing the Productivity of Wells” in Drilling and Production Practice (1952). I also learned about the history of the words frak and frack in Battlestar Galactica from Ron Moore, who won a Peabody Award in 2006 as a writer and producer. Chris Pappas, a collector of Battlestar Galactica–related materials, provided the 1978 writer’s guide with the original spelling of frack. The Associated Press wrote a story about the word frak sweeping “geek nation” in 2008.

  Details of the Southlake battle over fracking is mostly from local news reports, supplemented by interviews with participants and a review of Southlake files and legal documents. The Bartonville material comes from interviews with Ron Robertson and a review of its Ordinance 526-11 issued in October 2011. I also relied on the Texas Railroad Commission’s “RRC Public GIS Map Viewer” and related documents.

  A good overview of Germany’s Energiewende can be found in Osha Gray Davidson’s chapbook, cited below. Another fascinating article, and the source of the “fighting for its economic survival” quote, is “How to Lose Half a Trillion Euros” in the Economist’s October 12, 2013, edition. The Rex Tillerson quote “If you want to live by the precautionary principle . . .” is from an article in Fortune by Brian O’Keefe on April 16, 2012, titled “Exxon’s Big Bet on Shale Gas.”

  I mentioned that the industry has more than doubled the number of wells drilled in a decade. The Energy Information Administration reports the number of oil and gas wells drilled in the United States as follows: 54,302 in 2008 and 22,911 in 1998. These wells were also longer, on average, according to EIA records of the total footage of wells drilled.

  Information about Wyoming’s ozone problems are briefly discussed in the Shale Energy Advisory Board’s Ninety-Day Report, cited below. The report cites a July 2011 presentation from the Wyoming Department of Environmental Quality, which I also reviewed. The board’s Second Ninety-Day Report discusses how wells can emit methane and other pollutants. The EPA, in August 2012, reported 0.078 part per million of ozone in Sublette County, Wyoming. Chicago and Phoenix reported 0.077 part per million. This information can be found at www.epa.gov/airtrends/values.html and clicking on the ozone information link. (Last accessed May 2013.) The Texas Commission on Environmental Quality benzene finding was from a Railroad Commission notice issued in March 2010 and available at www.rrc.state.tx.us/forms/reports/notices/airemission21010.pdf. (Last accessed August 2013.) Another source of information about air emissions from oil and gas operations is the June 2012 testimony by Environmental Defense Fund president Fred Krupp before the United States Senate Subcommittee on Clean Air and Nuclear Safety.

  Information about the health impact assessment in Battlement Mesa, Colorado, was published in an American Journal of Public Health article titled “The Use of Health Impact Assessment for a Community Undergoing Natural Gas Development.” The article was published online in April 2013. I also interviewed one of the authors, Lisa McKenzie, who said it was the first such assessment of shale-related development. The Health Impact Project, a collaboration between Pew Charitable Trusts and Robert Wood Johnson Foundation, tracks these assessments. Its website is www.healthimpactproject.org.

  For a broad discussion of the macroeconomic and geopolitical implications of rising US crude oil production, please see the Morse publication cited below as well as Michael Levi’s book, especially chapter 3.

  The OPEC quote about the impact of the shale boom on US imports comes from the Wall Street Journal article “Beijing is Set to Overtake the U.S. as World’s Largest Importer of Oil,” by Benoît Faucon in the April 4, 2013, edition.

  Alan Greenspan provided testimony to the Congressional Joint Economic Committee on November 3, 2005. Steve Coll, in Private Empire, cited above, provides evidence that Lee Raymond was Greenspan’s tutor.

  Details on the Nucor upgrader is from an article I wrote in the February 8, 2012, Wall Street Journal titled “Oil and Gas Boom Lifts U.S. Economy” and came from an interview with company president John Ferriola. Information about industrial investment in the United States is from Nancy Lamb at Dow Chemical. She provided me with the company’s December 2012 version of a presentation it titled “Industry to Invest $90 Billion in Manufacturing Renaissance.”

  The Zaki Yamani quote is famous and can be found, among other places, in the Economist’s October 23, 2003, issue in an article titled “The End of the Oil Age.” The “There is always either too much or too little” quote is from Paul H. Frankel, The Essentials of Petroleum: A Key to Oil Economics, 3rd ed. (London: Frank Cass, 1983). Thanks to Phil Verleger for helping me track down the quote—and for suggesting the Pandora’s box metaphor.

  At the time of this writing, there was a relatively small number of important studies on methane leakage. I have no doubt that more will follow. I relied on the Howarth letter—referred to as the Cornell study—and the article by O’Sullivan and Paltsev, cited below. In the O’Sullivan article, the supplemental materials sections S3 and S4 were particularly helpful.

  Davidson, Osha Gray. Clean Break: The Story of Germany’s Energy Transformation and What Americans Can Learn from It. New York: Inside Climate N
ews, 2012.

  Howarth, Robert W., Renee Santoro, and Anthony Ingraffea. “Methane and the Greenhouse-Gas Footprint of Natural Gas from Shale Formations: A Letter.” Climactic Change 106, no. 4 (2011): 679–90.

  Levi, Michael. The Power Surge: Energy, Opportunity, and the Battle for America’s Future. New York: Oxford University Press, 2013.

  Morse, Edward L., Eric G. Lee, Daniel P. Ahn, Aakash Doshi, Seth M. Kleinman, and Anthony Yeun. Energy 2020: North America, the New Middle East? Citi GPS: Global Perspectives & Solutions. http://fa.smithbarney.com/public/projectfiles/ce1d2d99-c133-4343-8ad0-43aa1da63cc2.pdf. (Last accessed April 2013.)

  O’Sullivan, Francis, and Sergey Paltsev. “Shale Gas Production: Potential Versus Actual Greenhouse Gas Emissions.” Environmental Research Letters 7, no. 4 (2012).

  Secretary of Energy Advisory Board. Shale Gas Production Committee Ninety-Day Report. Washington, DC: August 2011.

  ———. Shale Gas Production Committee Second Ninety-Day Report. Washington, DC: November 2011.

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  Index

  air pollution, 248, 309

  Alaska, 19, 80

  Amarillo-to-Chicago pipeline, 93, 102

  American Clean Skies Foundation, 249–50

  American Energy Operations, 180

  American Energy Partners, 208–9

  American Petroleum Institute, 280

  Amoco, 72, 95, 134, 142–43

  Anadarko Petroleum, 188, 216–17, 296

  Argonaut Energy, 102

  Arkansas, 3, 130, 155, 192, 205

  Armstrong, Hannah, 212, 214

  Armstrong, Peter, 212–14

  Arnold, John, 199, 201

  Arthur Andersen, 173–74

  Atlantic Richfield (Arco), 105, 134

  Atomic Energy Commission (AEC), 80–82

  Austin, Tex., 28, 56, 242–43, 246–47

  Austin Chalk, 176–77, 179, 197

  Bakersfield, Calif., 99, 283, 292

  Bakken Shale:

  employment in, 46, 52

  extent of, 55, 57

  and fracking of Irene Kovaloff, 38–49, 51–54, 60–62

  and fracking of Olson, 54–57

  in future, 58

  in North Dakota, 33, 38, 43–46, 49, 57

  oil and, 33, 38–40, 43–44, 46–47, 49, 54–58, 62, 303

  Banks, Gene “Tinkerbell,” 165–66

  Baran, Carrie, 105, 110

  Barnett Shale, 17, 295–96

  air pollution and, 309

  Argonaut Energy and, 102

  comparisons between Texas sandstone and, 128

  Devon and, 143–50, 152–53, 155

  extent of, 8, 15–16, 154

  fracking and, 103–4, 113, 117–25, 143–49, 153–54, 227, 303

  gas and, 3, 8, 15, 102–4, 109, 117, 120–22, 124–25, 131–32, 144–45, 148–55, 303

  horizontal drilling in, 144–47, 149–50, 153–54

  McClendon and, 153, 188, 191–92, 195

  mineral rights leasing in, 150–55, 191–93, 295

  Mitchell and, 8, 15, 88, 92–93, 102–4, 109, 112–13, 124, 134–36, 143, 150–51

  Steinsberger and, 117–20, 124, 132

  Barrow, Clyde, 120, 123

  Bartholomew, Kate, 259

  Bartonville, Tex., 299–300

  batteries, 59, 301–2, 306

  Bazhenov Shale, 16–17

  Belco Oil & Gas, 173

  biofuels, 34, 50, 58, 113, 263, 301

  Boling, Mark, 27

  Boom Town, 20

  Boonsville Bend conglomerate gas field, 93, 101–2, 150

  BP, 2–3, 72, 134, 199–200

  Deepwater Horizon and, 260–61, 273–76, 290

  Bradford County, Pa., 221–22, 230, 273

  Brigham, Bud, 54–60

  and fracking of Olson, 54–57

  oil field technology and, 59–60

  Brigham Exploration, 59

  finances of, 54–57

  fracking technology and, 56–57

  Olson well of, 54–56

  Brune, Michael:

  gas and, 263–64, 266

  McClendon and, 252–53

  Bunstine, H. L., 21

  Burkburnett, Tex., 20–23

  as boom town, 20–21, 25

  comparisons between modern shale communities and, 25–27

  oil and, 20–23, 27, 30, 34, 300

  Burke, Bob, 139

  Bush, George W., 110, 274

  Byington, Josh, 37–38, 54

  background of, 46–47

  and fracking of Irene Kovaloff, 40–45, 61

  California, 55, 68, 178, 252

  and coal vs. gas, 244

  energy crisis of, 180, 182–85

  energy trading and, 181–82

  gas prices in, 180, 182, 185–86

  and mixing of oil and water, 98–99

  Monterey Shale and, 16

  Calpine, 178–79, 183

  Cambe Blueprint library, 86–88, 91

  Canaan Energy, 152–54

  Canada, 4, 6, 55, 145, 255–56

  oil production of, 50–51, 254

  Catron, Robert, 123

  Celestia, Pa., 211–14

  cement, 103, 235

  Cooke and, 271–80, 284, 286, 292

  Deepwater Horizon and, 274–75

  evaluating integrity of, 274–86, 288–90, 292–93

  Farris’s research and, 71–72, 75

  and mixing of gas and water, 101, 106, 109, 111, 230–31

  and mixing of oil and water, 98–100

  well construction integrity and, 32, 71, 271–90, 292–93

  cement bond logs (CBLs), 275, 278, 292

  Centaurus Advisors, 199–201

  Cheney, Dick, 83, 274

  Chernobyl meltdown, 302

  Chesapeake Energy, 130, 152–63, 185–88, 242–43, 250, 257, 304

  acquisitions of, 152–54, 195, 228

  asset sales of, 205–7

  Austin Chalk and, 176–77, 179

  Barnett Shale and, 152–55, 191–93

  board of directors of, 160–62, 174–75, 177, 203–4, 207–8

  comparisons between Devon and, 155–57, 188

  corporate culture of, 159, 178, 208

  East Virgil prospect and, 171–72

  EIG’s joint venture with, 207–8

  energy trading and, 197–200, 245

  Fayetteville Shale and, 155, 192

  finances of, 1–2, 152, 155, 157, 160–63, 166, 173–77, 179, 185–86, 188, 190, 192–98, 200–201, 203–7, 218–20, 228, 237, 245, 251

  fines of, 230, 273

  four main inputs of, 190, 192

  gas and, 1–2, 9, 15, 27, 152, 154–55, 173, 177, 185–87, 193–94, 197, 199, 205, 241, 248, 252

  Gold’s parents’ land and, 1–2, 4, 10–11, 14, 32, 293

  horizontal wells of, 206, 228

  initial public offering of, 173, 175

  lawsuits of, 219–21, 230, 273

  McClendon’s departure from, 192, 208

  McClendon’s hedge fund and, 198–99

  McClendon’s management style and, 158–61, 175–76, 178–79, 188, 190–95, 197–98, 203–4, 206, 208, 245, 251, 255, 303

  McClendon’s perks and, 174, 202–3, 207–8

  Marcellus Shale and, 2, 192, 195, 218, 221, 228, 231

  mineral rights leases and, 1, 4, 10–11, 14, 26–27, 152, 154–55, 191–94, 197–98, 201–2, 206, 210, 217–19, 221, 228, 237, 245

  name of, 1, 188

  origins of, 169–70, 172–75

  proposed sale of, 162–63, 177

  Sullivan County and, 14, 210, 217–21, 232–33, 237

  Utica Shale and, 192, 206–7, 221

  Ward
’s management style and, 175–76

  water contamination and, 32, 230, 232–33

  Chevron, 2–3, 73, 134

  Chicago, Ill., 75, 93, 102, 138, 142, 167, 309

  Chief Oil & Gas, 150–51

  China, 15, 163, 196, 206, 265–66, 304

  Chrysler, 75, 139

  Chu, Stephen, 58–59

  Citigroup, 266

  Civil War, 64–66, 212

  Clark, Dave, 285

  Clark, Tom, 140

  CleanStim, 52

  Clearfield County, Pa., 228–29, 260

  climate change, 5, 14, 36, 210, 248, 261

  Chu on, 58–59

  coal and, 34, 241–42, 263

  gas and, 32, 34, 241, 245, 249–50, 264–66, 308–9

  McClendon and, 245, 267

  Pope and, 240–42, 250–51, 254

  coal, 5–6, 24, 35, 83–84, 142, 193, 235

  climate change and, 34, 241–42, 263

  gas vs., 5, 32, 131, 225, 241–42, 244–51, 254, 258–67, 306, 308–9

  in Germany, 302

  Hubbert on, 79

  opposition to use of, 97, 131, 241–51, 253–54, 257–61, 263–65

  prices of, 247, 266

  regulation of, 243, 245–48

  Sullivan County and, 213–14

  Cohen, Edward, 189

  coiled tubing units, 227

  Colorado, 38, 52, 81–82, 113, 205

  Commodity Futures Trading Commission, 199

  Congress, U.S., 32–33, 52, 139, 164, 244

  gas and, 83, 199, 225, 253, 304

  Continental Illinois National Bank, 167

  Continental Resources, 171

  Cooke, Claude E., Jr., 270–86

  background of, 271, 277–82, 288

  Gearhart and, 281–85, 291–92

  legal career of, 280, 282

  physical appearance of, 270–71, 282

  RDT of, 274–76, 278–81, 283–86, 288, 292–93, 307

  well construction integrity and, 270–81, 284–85, 291–93, 307