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The Frackers, by Gregory Zuckerman. New York: Portfolio, 2013. 404 pp. $29.95 (hardcover).
The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters, the second book by Wall Street Journal reporter Gregory Zuckerman, tells the story of the development, over the past several decades, of the amazing technology by which oil and gas have been made to flow from previously unyielding stone, in quantities tallied in the hundreds of billions of barrels and trillions of cubic feet. Zuckerman’s complex narrative crisscrosses the country to Texas, Oklahoma, Pennsylvania, and the badlands of Montana and the Dakotas. The book is the result of (among other things) more than a hundred hours of interviews with those whose story it tells; Zuckerman often uses the perspective gained from these firsthand accounts to give the story a fly-on-the-boardroom-wall feel.
The Frackers, as the title suggests, is as much about the stories of the men who developed fracking as it is about the technology itself. Some of these men were children of poor immigrants; others grew up in hardscrabble rural western towns. Zuckerman paints detailed portraits of their upbringings and backgrounds. What they all had in common is that these men were focused and driven, verging on obsessed, with making the earth yield its oil and gas riches. They built and risked vast fortunes, sometimes succeeding wildly, sometimes losing everything, only to pull themselves up by their bootstraps and start again.
Zuckerman explains the approach of these “wildcatter” energy explorers:
A wildcatter is an independent operator who searches for oil or natural gas in areas that can be miles from the closest producing well. These men—and they almost always are men—are equal parts gamblers, salesmen, and geologists. Supremely confident, wildcatters drum up financing from banks or investors by describing how they will tap a gusher in a spot others have dismissed, ignored, or misunderstood. They repeat the pitch, no matter how poor their chances of success, until they have the funds to acquire acreage, drill a well, and wait for oil and gas to flow. Wildcatters are responsible for discovering the majority of the nation’s oil and gas. (p. 39)
He later elaborates:
In many ways, the wildcat profession is quintessentially American. It takes a heavy dose of self-assurance and comfort with risk to bet on what might or might not be far below the surface, well out of sight, as well as an unbridled optimism that Americans seem to have in abundance. At the same time, U.S. homeowners usually own the land under their property, unlike citizens in most other countries. As a result, wildcatters can directly negotiate with landowners to buy their drilling rights, rather than go through government officials. The word “wildcat” itself comes from an early-nineteenth-century American slang for a risky business venture. (p. 164)
In other words, America’s fracking revolution is deeply intertwined with America’s capitalist heritage. So-called big oil aside, the discovery of new oil and gas resources in the United States is largely an entrepreneurial activity led by individuals and small independent energy companies.
The wildcatters in Zuckerman’s story repeatedly demonstrate uncanny skill employing local surveys and historical maps, seismic studies, and, more recently, computer models to locate areas with possible hidden oil or gas reserves. The discovery in the early 1990s of a particular oil-rich formation deep underground, in a previously unknown ancient meteor crater, is a good example:
One day, Rex Olson, an exploration manager, showed a map to [Harold] Hamm [of Continental Resources], pointing to an unusual structure two miles below the surface that looked like a giant hoofprint of a cow. “You know, that kind of looks like an astrobleme” Olson told his boss, referring to an ancient meteorite crater.
“You’re kind of right, it does,” Hamm replied.
They drilled down nine thousand feet and discovered an ancient crater, eight miles in diameter, created by a meteor that had pummeled the earth hundreds of millions of years earlier. . . . The crater, later nicknamed Ames Hole, was brimming with oil. Continental tapped a series of prolific wells that over time yielded more than eighteen million barrels of oil and a gusher of profits. (pp. 157–58)
Another recurring theme in the book is how the wildcatters were by necessity extremely competitive and secretive—a major discovery could prove essentially worthless if the competition got wind of it and bought up the adjacent land rights. The story of an early success by Sun Energy, using horizontal drilling in the Austin Chalk formation in Texas, illustrates this well:
The Sun production team . . . agreed to test horizontal drilling on one old, tired well in the Austin Chalk area. Almost immediately, the loser well turned into a huge winner, as production soared.
It seemed great news, at least for a day or so. But the glee of the crew quickly turned to panic—they realized that if Sun’s rivals found out how much oil they were producing and how easily it was coming up, they’d do their own sideways drilling and Sun wouldn’t be able to buy nearby wells at reasonable prices. They had to do something to mask their success or they’d be known for blowing a major opportunity.
“Shut it down!” a production executive screamed to several well hands.
When the company reported its production to the state at the end of the month, the well’s results didn’t seem out of the ordinary. The well relying on horizontal drilling had given up the same amount of oil that nine of Sun’s old, tired vertical wells produced. The big difference was that the horizontal well generated all that oil in just two days! Hardly anyone knew about their breakthrough, though, because the well was shuttered so quickly. (pp. 51–52)
Zuckerman describes how, time and again, an oil or gas well—or even a whole region—once written off and abandoned as worthless, could be compelled anew to produce prodigious amounts of fossil fuels, by employing some new, untried drilling technique, or by implementing a variation on drilling technology that had proven successful in a different locale with similar geology. We see the industry go from drilling straight down into easily accessible underground pools of oil, to drilling at an angle, to eventually perfecting the technology of drilling horizontally, and finally to add fracking, which was originally developed separately, to the horizontally drilled wells. These methods have become so precise that geological layers can now be tapped that are miles below the surface, yet only tens of feet thick.
A pattern emerges: energy prices spike; new, expensive drilling methods become viable, allowing previously unrecoverable oil and gas to flow from the ground; the new technology becomes more affordable as it is perfected and adopted more widely; prices eventually stabilize. Yet, every time businessmen try a new technology, they risk failure. Readers learn who takes such risks, what motivates and inspires them, where they make their discoveries, and how they develop or adapt technologies to seek a profit.
Zuckerman describes epic struggles to control leasing rights to areas in the hundreds of thousands of acres, with armies of thousands of agents, called landmen, combing the countryside and buying up mineral rights before word of a discovery leaks out. He also describes the battles within companies’ leadership teams over which fields to pursue and how heavily to leverage a company’s finances to buy land or acquire mineral rights. Wildcatters and their companies often would take on debt amounting to hundreds of millions or billions of dollars, to buy up acreage and lock the competition out of an area. At times, this massive debt leveraging paid off richly; at other times, it spelled disaster.
The book also clarifies for the lay reader aspects of fracking and oil and gas exploration. For example, in North Dakota, most energy development today is going on in the Williston Basin, a large geographic area in western North Dakota that also spreads into South Dakota, Montana, and southern Saskatchewan to the north. The Bakken is a particular subterranean layer tapped for oil and gas, as is the Three Forks layer below it. The understanding that multiple, separate strata can be tapped at different depths below the ground, within the same geographical area, helps explain how horizontal drilling and fracking have unlocked such vast amounts of new oil and gas resources.
One problem with the book is that its narrative is at times disjointed and choppy. Odd tangents of questionable relevance, such as quirky behaviors and personal foibles of the wildcatters, frequently intrude, especially in the earlier parts of the book.
Another problem is that Zuckerman, despite his positive portrayal of wildcatters and their work, gives too much credence to the anti-fracking propaganda of environmentalists. For example, the book mentions Josh Fox and his anti-fracking smear film Gasland but does not mention Phelim McAleer’s well-documented rebuttal, Fracknation. And Zuckerman sees fracking, not as an unqualified good, but merely as something that will “buy time” for so-called alternative energy to take off.
These criticisms notwithstanding, The Frackers is an enjoyable read about an exciting, transformative period in our nation’s industrial history. As the energy revolution made possible by fracking continues to unfold, The Frackers gives readers a good understanding of the inner workings of the discovery and development of the energy industry. More importantly, it tells the inspiring story of individuals who embody the American spirit of initiative and entrepreneurship, and who make the oil flow.
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