The Frackers – the Outrageous Inside Story of the New Billionaire Wildcatters

I recently completed a very interesting book written by Gregory Zuckerman, a Wall Street Journal reporter called “The Frackers – the Outrageous Inside Story of the New Billionaire Wildcatters,” published by Portfolio/ Penguin Press in 2013. Zuckerman is also author of “The Greatest Trade Ever.” I highly recommend this book as it is as entertaining as it is informative, in multiple ways. It gives you a clearer picture of the risks and rewards of fracking, but also shows how hard it is to both glean the fossil fuel you are seeking and to be so highly leveraged in debt as you do.

The successful fracking companies, usually bucked the odds and the more measured risk takers in the larger companies who had much more capital to withstand some of the risk. As a result, even the ones who had success, usually failed before, after and sometimes during their success, due to the need to be land rich which came at a highly collaterized cost of debt. When some went public, they also had to contend with impatient shareholders. These wildcat developers made and lost huge sums of money, oftentimes with their egos getting in the way of knowing when to stop.

Zuckerman does an excellent job of telling the story of people like George Mitchell, who has been called the “father of shale fracking,” Aubrey McClendon, Tom Ward, Harold Hamm, Charif Souki, Robert Hauptfurher and Mark Papa, among countless others who were key to the success of gleaning natural gas and oil from places that were perceived too difficult to crack. He also defines why methods and strategies are so secretive, as companies will follow suit to leverage off your success. These men and their companies, Mitchell Energy, Oryx Energy, Chesapeake Energy, Continental Resources, Chenier Energy and EOG Resources, were truly the path finders in this process called fracking. They led the US to become more energy independent, yet in so doing, understated or overlooked the risks that came with those rewards.

As I read this entertaining book, I found myself convinced of a preconceived notion, that the main mission of these guys was to make a lot of money, as well as proving others wrong. Some even took delight that their hypothesis was true, even if they had not benefitted as greatly as the company that bought out their rights. Yet, what I also found this lust for money also was an Achilles Heel, and there seemed to be less consideration of what fracking was doing to the environment. They were more content to let the problems be handled by someone else and often belittled the complaints and complainers.

Zuckerman addresses these concerns from the frackers viewpoint earlier in the book, yet does devote an Afterword to the environmental risks that are real. But, before doing so, he notes that George Mitchell, late in life continued to buck convention. Per Zuckerman, Mitchell “gave millions to research clean energy even as he, along with his son and Joe Greenberg, invested in a new shale formation in Canada.” But the quote that interests me most, is by Mitchell who responds to those who contend how safe fracking is:

“Fracking can be handled if they watch and patrol the wildcat guys. They don’t give a damn about anything; the industry has to band together to stop isolated incidents.”

This dovetails nicely with a well-worn phrase I gleaned early on. Even if fracking were safe, it is only as safe as its worst operator. Mitchell, the father of fracking is more than acknowledging the bad operators. His son Todd, who was also in business with his father, said “his father’s work will have had a negative impact on the world if it forestalls progress on renewable energy, instead of giving innovators time to improve wind, solar and other cleaner energy sources.”

Let me close with an even-handed quote from Zuckerman, which frames the issue, yet also notes a caution. He answers the question “Is fracking as bad as activists say, and what will its impact be as drillers continue to pursue energy from shale and other rock formations?” His conclusion is as follows:

“The short answer: Fracking has created less harm than the most vociferous critics claim, but more damage than the energy industry contends. And, it may be years before the full consequences of the drilling and fracking are clear.”

With my reading I would agree with both of these sentences, yet not place the fulcrum in the middle of the scale. I would be more on the side of vociferous critics as the evidence continues to mount and as non-industry scientists are revealing issues. The massive water usage, the seepage of the poisonous slickwater fracking fluid into the environment, the particles that are blasted into the atmosphere which are causing breathing difficulty, and the degradation to the surrounding environment just to get vehicles and equipment into frack are compelling arguments by themselves.

But, the great caution in his last sentence is where we need to focus. “And, it may be years before the full consequences of the drilling and fracking are clear.” This is the bane of any environmental group fighting for people and the environment. Oftentimes, it takes years for the true damage to be seen and felt. Some show up in shorter order, yet when the companies making the money do not want to stop a mission, they can afford to fight people who cannot clearly make a connection. The developers want to settle with each complaint at minimal outlay and move on. Unfortunately, the people exposed to the problem, remain in harm’s way.

8 thoughts on “The Frackers – the Outrageous Inside Story of the New Billionaire Wildcatters

  1. As I’ve said before, I believe Fracking will prove to be the most disastrous man-made issue in history. The world is facing a critical water shortage, and some have forecasted an international crisis within a few decades. yet we are allowing millions of gallons of water DAILY to be poisoned in this process. And this doesn’t even take into account the ancillary damages to our land, air and water resources.

    Thanks for a great post. I’m going to look into this book.

    • Thanks Barney. I think you will like the book. What troubles me is the industry has known of the safety issues and has consistently told the public the process is safe. Then, when people start saying collectively there is a problem and the data and scientists start shining a light on things, there is an admission that yes the process has some flaws and there a few bad apples, but the process is still safe. I feel we are being lied to, so I have a high sense of skepticism of people with a huge vested interest in something telling me that something won’t hurt anyone. There is a great example of this kind of behavior there in CA with the flame retardant industry, where it took years to show the industry was lying to people, even with impressive data against them.

  2. I view fracking much as I do genetic modification. The risks involved are just not worth the short term gains to be had. In fracking, the wasteful use of a precious commodity (water) makes the process even more risky. Good review.

    • Thanks Linda. There was one more op-ed article in our paper the other day from an industry person, who said how safe it was and we should begin fracking in NC. The quotes from this book indicate that it is not safe, so it is misleading to say it is.

      • Sigh. Like with “Global Warming,” we have “scientists supporting both sides of theses issues. This confuses people. Confusion allows the pillagers to reap their benefits before we realize what we’ve lost.

      • The trouble is similar to expert testimony. When the jury only sees two talking heads, they assume it is a 50/50 even money game. Just Sunday, Bill Nye debated a Senator who felt she was on equal footing with him on the issue and even called Bill Nye only an actor and an engineer.

        Yet, if this was a sporting event, the global warming scientists would be winning in a rout 96 to 4. Just yesterday, the Union for Concerned Scientists released another study with their climate change concerns. The debate is over and people need to be told that. We now must talk about what to do about it.

        The line I find myself using is the GOP needs to join the rest of the world to discuss what we need to do about climate change. I sometimes add you are only harming your own party by non believing what others see to be true. Thanks for your thoughts. BTG

  3. Note to Readers: As of January, 2015, I wanted to revisit the above quote from the author regarding the dangers of fracking. Zuckerman notes it is likely less than the environmentalists believe and worse than the industry proclaims. I noted above that I agreed with the comment, but said the danger is likely closer to the environmentalists prognostication. Almost one year later after studies, reports, lawsuits and data continue to show the dangerous impact of fracking, I firmly believe it is as bad if not worse than predicted by environmentalists.

    Since that time more study has shown links between contamination with water and air with indirect leakage, but also directly with the purposeful venting of surplus methane (these plumes can be seen from space). Since that time, not only has there been more definitive evidence linking deep underground disposal of the toxic water with earthquakes, there is now evidence that indicates the fracking process is causing earthquakes. Since that time, we have seen more environmental degradation to roads and other infrastructures. Since that time, we have had more droughts in fracking areas, where fracking needed to be curtailed. Since that time, the state of New York has banned fracking under the precautionary principle for health reasons. And, since that time, there have been more lawsuits against the industry and several votes where towns said no to fracking, fighting a heavily funded industry effort.

    And, while all of this is going, there has been rampant growth in solar energy investment, deployment and jobs as the price of solar has fallen dramatically. At this point, there are almost twice as many solar jobs than coal industry jobs. Clean energy is growing, it is smart and it is creating jobs. What is interesting is the free market is painting this picture with a glut in oil/ gas and reducing demand with fewer drivers, more mass transit users and better mpg cars. The answer is solar, wind and other renewables.

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