10 things I learned from “The Frackers” by Gregory Zuckerman released in 2013
It is interesting to read a book from the past about a topic that is currently in the news. (plus an amazing AI image with no additional prompts!)
1. Shale Fracking let the US become a net exporter of natural gas
2. Natural gas was ignored and even burned as waste as recently as the 1950s
3. The drilling technologies developed in the last 30 years have enabled companies to extract 4x the gas of previous years.
Estimates of viable resources keep going up as the technology continuously improves.
4. The legal structure of land in the US where citizens own the mineral rights on their land instead of the government led to wildcatters and the structure of the industry
Things are different in other parts of the world where the government owns mineral rights.
5. The Chesapeake company made enormous bets on control of land: billions of dollars
6. The wildcatters would frequently follow the major oil companies any buy abandoned drilling sites and then use newer technologies like horizontal drilling and fracking to get more gas out of the ground
7. The scale of natural gas production is hard to fathom
"by 2005, the Barnett Shale was producing almost half a trillion cubic feet (Tcf) of natural gas per year" fairly conservative estimates say that there is at least 100 year's supply of natural gas at these rates! There is shale gas on every continent.
8. I started learning about this because a pundit said in 2023 that there will soon be a massive burst in US production leading up to the 2024 presidential election to create cheap energy and (temporary?) prosperity
Time will tell...
9. The environmental impact of fracking is complex
While Fracking seems "dirty" and celebrities cry out against it is is a lot cleaner than burning coal. So if you compare pollution per watt fracking is cleaner than many alternatives. However, because the pollution is dramatic and can affect water supplies it is not perfect. A common sight was to show someone setting their tap water on fire, but there are anecdotes in the book of people doing this in the 1960s before fracking was invented. The flaming tap water is probably due to methane gas.
10. The maveric wildcatters built the industry: just a few people drove the whole thing
11. Prices of fuel cause energy fortunes to swoon
People go from billionaire to bankrupt and back again based on the price swings. Chesapeake Energy, the hero of this book, went bankrupt in 2020.
"Founded in 1989 by Aubrey McClendon and Tom Ward with an initial $50,000 investment, Chesapeake focused on drilling in underdeveloped areas of Oklahoma and Texas. It largely abandoned traditional vertical well drilling, employing instead lateral drilling techniques to free natural gas from unconventional shale formations.
It became a colossus in the energy markets, eventually reaching a market valuation of more than $37bn. Then, the first in a series of financial shocks hit Chesapeake as the fallout from the global financial crisis of 2008 sent energy prices into the basement."
No comments.