Obama misleads about government role in fracking

Nicholas Loris:

President Obama has been on a kick to promote natural gas production. He said in his State of the Union address, “And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock—reminding us that government support is critical in helping businesses get new energy ideas off the ground.”

There are two very big problems with this statement. First, it makes it sound as if the government invented the technology, commercialized it, and handed it over to private companies. Second, it assumes that if the government hadn’t invested in natural gas technologies, we wouldn’t be where we are today in terms of natural gas production. Both are far from the truth.

Well before the government invested in natural gas technologies, it was the private sector that established and developed hydraulic fracturing (or “fracking”), a process by which producers inject a fluid, composed of 99 percent water, and sand into wells to free oil and gas trapped in rock formations. Its roots go as far back as the 1860s, and in the 1940s, Stanolind Oil and Gas Corporation began studying and testing the method, with a patent issued in 1949 and a license granted to Halliburton to frack on two commercial wells. In an overview of the history of fracking, Carl T. Montgomery and Michael B. Smith of NSI Technologies write:

In the first year, 332 wells were treated, with an average production increase of 75%. Applications of the fracturing process grew rapidly and increased the supply of oil in the United States far beyond anything anticipated. Treatments reached more than 3,000 wells a month for stretches during the mid-1950s. The first one-half million-pound fracturing job in the free world was performed in October 1968, by Pan American Petroleum Corporation (later Amoco, now BP) in Stephens County, Oklahoma.

Government involvement came years later. The Department of Energy partially funded data accumulation, microseismic mapping, the first horizontal well, and tax credits to extract unconventional gas. But in the driver’s seat was George Mitchell, who invested millions of his own money in research and development for fracking and horizontal drilling. His company’s geologist, Jim Henry, first identified Barnett shale as a possibility for more energy. Mitchell spent between $7 million and $8 million of his own money trying to successfully extract shale gas and eventually made it economically viable. He is behind the shale gas revolution, not the government.

...

I first learned about fracking in my oil and gas law school course in the early 1970s.   It was not a new technology.  I also learned about horizontal drilling which was not associated with fracking, but with stealing a neighbors oil.  It was Mitchell's genius to combine the two for extracting larger amounts of oil and gas.