Author discusses oil, gas shale revolution leaders in Friday talk
Innovative efforts that sparked the oil and gas industry’s shale revolution share some commonalities that also show up in the nation’s technological and medical sectors, a best-selling author who wrote the book about fracking pioneers says.
Greg Zuckerman, author of “The Frackers,” shared those insights and others during an hour-long talk Friday morning to about 200 people attending the National Association of Royalty Owners of Oklahoma’s annual convention in Oklahoma City.
Zuckerman also discussed the book’s cast of characters, their backgrounds, the ideas they successfully developed and how their successes and failures shaped their fortunes going forward.
They include oil and gas industry leaders many Oklahomans commonly know, like Aubrey McClendon and Tom Ward, two landmen who initially were competitors but decided to join forces to grow Chesapeake Energy into a natural gas-producing giant.
Another is Harold Hamm, who built his business from scratch in northwest Oklahoma into what today is one of the most successful shale oil producers in the nation.
Others are George Mitchell, a hydraulic fracturing pioneer from Texas who sold his company to Devon Energy after a team at his company, Mitchell Energy, “accidentally” discovered that increasing the amount of water used to complete wells boosts their production.
“It was really trial and error. They started in 1982, and it took them until 1998 to finally figure out how to get lots of natural gas from shale in the Barnett,” Zuckerman said.
Then there was Charif Souki, a one-time investment banker who created Cheniere Energy and raised money to build a natural gas import terminal, only to have to raise additional dollars later to convert it to an export terminal after the shale revolution drove natural gas market prices dramatically lower.
As for McClendon and Ward, Zuckerman said they took Mitchell Energy’s early successes and exported them to other parts of the nation, especially Pennsylvania, while Hamm did the same by introducing the technology into North Dakota’s Bakken Shale field.
Zuckerman said he was struck time and time again while researching and writing the book about how interesting ideas, optimism, a little bit of luck and some hard work ultimately can change the world.
“In 2006, we as a nation were scared about where we were going to get our gas from and the people we going to have to depend upon,” Zuckerman said. “Today, we are producing close to 12 million barrels (of oil) a day. It is a crazy shift that has changed everything.
“Think about how much more we would have had to pay for natural gas … how much more we would have had to pay for electricity” if the shale revolution hadn’t happened, Zuckerman said. “That has helped all kinds of industries.”
He noted the shale revolution a decade ago that brought the U.S. an abundance of oil and natural gas now was sparked by independent entrepreneurs after major integrated oil and gas producers had written off the continental U.S., believing its economically producible reserves had been tapped out.
Zuckerman said that scenario isn’t too dissimilar from what happened in technology when Microsoft explored and abandoned an idea to combine advertising with search results, opening the door for Google to become the dominant player it is today.
Plus, some of the most promising cancer treatments being developed today were created by independent entrepreneurs — not major drug companies.
“Individuals who create these types of revolutions aren’t whom you would expect,” Zuckerman said.
The National Association of Royalty Owners of Oklahoma was established 39 years ago to assist people who own mineral rights with business and regulatory issues.
Grant E. Black, executive director of the National Association of Royalty Owners, said Friday there’s always been interest in owning, buying and selling minerals.
Black added, however, that managing minerals has become more challenging the past decade as geologic, drilling and completion technologies have advanced, opening additional areas to drilling and production activities.
The National Association of Royalty Owners providesinformation, educational conferences and other resources to help members manage their minerals and cope with changes in the regulatory realm.
“It can be a challenge for someone who owns minerals and isn’t familiar with the process,” he said. “The important thing is, they seek advice from someone who is knowledgeable to make the best decisions they can.”