11

George Mitchell, 94, dies: Oil man unlocked fracking

George Mitchell, 2009 photo

UPDATE JULY 26, 2013: George Mitchell died at the age of 94 on Friday. The profile below was based on one of the final public interviews he gave.


He cracked the code. That's what folks in the oilpatch say about George Mitchell. In the 1970s and '80s, the country's conventional, big pools of natural gas were tapped out. Drillers looked in new geologic formations, but found themselves stumped.

"We knew the gas was there," Mitchell tells Marketplace. "We didn't know how to get it free."

Now 93, this is likely Mitchell's last interview. We spoke at a hotel he owns in his hometown, Galveston. The billionaire Mitchell -- son of a Greek immigrant, real-estate developer, environmental philanthropist -- is by all accounts an independent, stubborn soul.

His firm's breakthrough was coaxing natural gas from stubborn rock known as shale. It unlocked a new geologic door to fossil energy. The innovation of shale fracking has tongues wagging about U.S. energy security, creating millions of new jobs, and eviscerating America's trade deficit. Perhaps.



  ONE FRACKING MINUTE: Listen to Scott Tong explain fracking in this 60-second animated explainer.

 


"Mitchell is really the giant here," says Diana Davids Hinton of the University of Texas-Midland. "In terms of the recent industry, George Mitchell's significance is both national and global. What his work did opened up possibilities that are mind-boggling."

Mitchell began poking in shale in the early '80s, in a picked-over spot in east Texas called the Barnett Shale. Shale is dense, tight rock that traps hydrocarbons inside. Back in the day, some even even pondered exploding atom bombs underground to get the energy out.

Most drillers sniffed and walked away.

"I've had a lot of engineers and geologists say, you're wasting your money, Mitchell," Mitchell says. "We knew enough to go on and keep doing it, because we saw we were making progress."

Not that his staff was always convinced. Geologist Dan Steward, now at Republic Energy, worked for Mitchell then. He recalls shutting down what he and his colleagues considered an unpromising well. A dog, as they say.

"And George said, 'okay let me get this right.'" Steward says. "'We drilled this well to understand an objective we don't understand. And we plug the well without evaluating it? What were you thinking? What were you drinking? What were you smoking?' And he wasn't quite that nice."

In 1982, Mitchell gave his staff a deadline: produce shale gas in 10 years, or the company's in trouble.

"He says if y'all -- if you team -- don't think you're up to this challenge, let me know. I'll find people who are," Steward says. "I had a wife and four kids, I said 'we can do it, boss!'"

Gallows tend to focus the mind, right? Actually, many innovation experts observe deadlines tend not to spur progress. Instead, they spur things like cussing.

"When you had an up you thought Ooh, we've got it now," Steward says. "But then, two weeks from now you'd have this down and you'd say, what the hell?"

Eventually, Steward's team discovered the key to recovering natural gas was cracks in the shale. Thing is, they had to manufacture new cracks to get it out – like hitting a windshield with a baseball bat. In this case, the bat is high-pressure fluid, shot down hole to fracture – or frac – the shale rock.

Contrary to what some believe, fracking is not a new technology. It's been around since the late 1940s. But Mitchell Energy tweaked it for shale, with much frustration. They tried various chemicals, gels and various combinations and frac juice recipes. One frustrated staffer suggested a horse manure frac.

"That's a pretty good quote," Mitchell recalls. "We were discouraged we weren't getting good results. And we had tried all other types of fracs.

By the mid 90s, money at Mitchell Energy was tight. Each well cost upwards of a million dollars to drill and frac. One worker suggested a budget frac, of mostly water instead of an expensive gel-based fluid. That raised eyebrows. Water tends to swell rock, shrinking the valuable fractures. But Mitchell Energy gave it a shot.

"Conventional wisdom was wrong," says company alum and Houston-area geologist Kent Bowker. "We want low viscosity fluid. We want water and that was an eye opener."

Turned out, water saved money. And in a surprise finding, it yielded more gas.

Luck has played a starring role in many innovation stories. The discovery of penicillin. And the development of a drug originally meant for heart disease, until researchers stumbled upon a different use: the drug Viagra.

Kent Bowker played a key role in a second Eureka moment. In the late 90s, he had a hunch the Barnett held more gas than the company assumed. Bowker just needed money to test it out. Company president Bill Stevens said no.

"He physically stuck his hand in my face and said, 'stop right there. We have enough of that stuff,'" Bowker says. "Bill Stevens never believed in it. He would go on CNBC and call it black tombstone."

But founder and CEO George Mitchell blessed Kent Bowker's science experiment. Its finding: the ground below held four times the gas they figured. Meeting time.

"And Mitchell got a big smile on his face," Bowker says. "He leans forward and says, 'This is huge! This is the biggest thing that's ever happened at this company. It's also the biggest secret, no one can say anything about this.'"

"I remember the meeting," Mitchell says. "Of course I didn't want him to tell anyone. The Barnett was a very big reservoir. And therefore if we could make it work, it could be very profitable.

Mitchell Energy poured money into drilling wells much more closely together than before. With the new information, they'd discovered the keys to making Barnett Shale wells moneymaking and commercial. They'd cracked the code.

Of course it did take 17 years to get there, not exactly your overnight wonder. Breakthroughs often take time.

"That's true with almost every major commercially viable innovation I can think of," says Harvard Business professor Teresa Amabile. She cites the example of the Kindle Reader.

"The initial insight for electronic ink occurred to a scientist named Joe Jacobson in 1995," Amabile says. "While he was lying on a beach in California. Look how many years it took to come up with a good color electronic ink that is commercially viable and useful."

The lesson she draws is, keep persisting. And keep ... failing.

"There are more and more failures than there are successes in most innovation journeys. What you need to do is figure out how to extract failure value. Figure out what you can learn from what went wrong.

Today, shale fracking technology is widespread, and still evolving. Another company, Devon Energy, paired fracking with horizontal sideways drilling, another breakthrough that yields even more gas. There's fracking for shale oil, variations known as simul-fracking and zipper fracking.

The point is, additional innovations keep coming. To many, shale is still at a nascent state of development: think initial, chunky, $800 cell phone.

"The level of the intelligence is very low," says Nansen Saleri of Quantum Reservoir Impact, a former top manager at the Saudi national oil company. He thinks the level of shale IQ will double or triple in the coming decades, at which point people will look back at today as "the initial dinosaurish phase of shale and unconventional resource development."

Of course, innovation is one thing. Whether it's good for society is quite another. And, like nuclear energy and genetic engineering, fracking draws critics, fearful of the drilling effects on drinking water, and the carbon emissions implications.

"That's going to prolong our dependence on the fossil fuel industry," Emily Wurth at Food and Water Watch. "Which is in their best interest, at a time when we need to be aggressively moving away from using fossil fuels."

Mitchell's view on that is a bit of a twist. He supports fossil fuel taxes, which could phase out his discovery. And his foundation has given millions to research clean energy.

And Mitchell wants stiff regulation of drillers, especially small, independent players.

"I've had too much experience running independents," Mitchell says. "They're wild people. You just can't control them. And if it doesn't do it right, penalize the oil and gas people. Get tough with them."

The words of a Texas oilman, talking out of school. It's not the first time George Mitchell has turned an idea upside down. And now, his breakthrough has turned America's fossil fuel debate on its head -- from one of scarcity to one of abundance.

About the author

Scott Tong is a correspondent for Marketplace’s sustainability desk, with a focus on energy, environment, resources, climate, supply chain and the global economy.
Log in to post11 Comments

Pages

Interesting story and comments. My fracking problem is of a different nature. I've survived fracking bullying by a NE Montana group that includes own siblings who hi-jacked parents oil almost 50 years ago. Am alone at the end and about to be pushed over the cliff. Anyone have suggestions for survival? WA state resident 46 years. 360 485 2200

Interesting story and comments. My fracking problem is of a different nature. I've survived fracking bullying by a NE Montana group that includes own siblings who hi-jacked parents oil almost 50 years ago. Am alone at the end and about to be pushed over the cliff. Anyone have suggestions for survival? WA state resident 46 years. 360 485 2200

It's true that fracking is controversial, has caused some environmental damage, may have caused earthquakes, etc. etc. But that's not news; I'd bet that almost everyone who listens to Marketplace is already acquainted with those issues.

The point of this story is a rare interview with a hard-driving entrepreneur about his quest for a difficult goal. That's the "news" here. (If the story had one sentence acknowledging the risks of fracking, would you all have posted those comments? Or would it take two sentences? Two paragraphs? Ten minutes?)

Arguing that APM is a tool of the petroleum industry -- based on the fact that they didn't mention environmental effects of Mr. Mitchell's discovery -- seems pretty farfetched to me.

I guess the story of how fracking was developed was interesting BUT I bet it will come back to bite us big time in the @$$ with contaminated water but by then it will be too late

awesome story Marketplace! a very big and important story. esp when you tied it in to the very nature and foundation of what being human is, to improve by trial and error

yah, curious how you, a liberal media, did not give the environmental angle but then you did not play up natural gas's distraction from green energy either or, i'll just stop whining now

good job, where do i send my financial support for public radio?

The only adverse effect of fracking that I heard mentioned (and I was driving at the time, so my attention may have been elsewhere) was the danger to drinking water. True, some residents near fracking-sites have been able to set afire the water from their taps. But it's not "just" that -- fracking takes inordinate amounts of water, thus shrinking the supply for household and agricultural use. And the heavy trucks that traverse local roads to get to the frack-sites are destroying local infrastructure and adding noise and dust to formerly more peaceful and clean environments.

The Marketplace Sustainability desk? Fracking is at least as dirty as coal. We are turning our country into an industrial wasteland for short-term oil industry profits. And Marketplace has sold out to Big Oil.

What the Frack? I guess Marketplace was too busy portraying George Mitchell as a "maverick innovator" to conduct any kind of critical inquiry into the environmental and health consequences of fracking. THIS for the "sustainability" desk ,no less. Yet another example of how "independent", "public" radio has been hijacked by corporate multi-nationals APM= "American Petroleum Radio"

I was very disturbed that the only "opposing view" presented in this story was the comment, "That's going to prolong our dependence on the fossil fuel industry." Why did Marketplace not include such important facts as those presented in the NPR Special Series, "The Fracking Boom: Missing Answers" which can be located here:
http://www.npr.org/series/151930969/science-and-the-fracking-boom-missin...

Was this broadcast intended to be a homage to "The oil man who figured out fracking," or to the fracking process, itself? Why not point out how the so-called studies defending the safety of fracking have now been rejected, "Positive Fracking Study Was Funded By Gas Company."
http://www.npr.org/2012/12/07/166755886/positive-fracking-study-was-fund...

I have trusted NPR to provide its listeners with all the facts needed to be an informed consumer. Should I be concerned about what "Marketplace" decides to present?

Pages

With Generous Support From...