The Boom (13 page)

One of the few in the industry who paid attention was George Mitchell. Yost collaborated with the Gas Research Institute, a private nonprofit funded by a government-sanctioned surcharge on interstate pipelines. Mitchell sat on the institute’s board of directors and helped steer its research budget and priorities. He was interested in developing new technologies to characterize the shale and create fractures. Yost and his colleagues published much of their work, some jointly conducted with the Gas Research Institute and some partnering with Mitchell Energy.

His small research allotment frustrated Yost. One large-scale fracked well pretty much drained the program’s budget for a year. By 1993, the program had been shut down. The surcharge on interstate pipelines didn’t fare well when pipelines were deregulated in 1992, and it was slowly phased out.

By then, however, the UGR had produced a large number of scientific papers that were printed in leading petroleum engineering journals. This blue-sky research, supported by government grants and through the Gas Research Institute, left hints of what might be possible. There was a lot of natural gas left in the United States, trapped in dense shale. There were ways to break open this rock and extract this gas. It was possible to drill wells that started off vertically and then turned slowly underground until they ran through the layers of shale. Sure, the tools needed refining and the technology hadn’t gelled. But the ideas were out there.

5

WISE COUNTY

George Mitchell sat alone, poring over well logs on folded sheets of paper on the top floor of a rundown three-story building. The sun had set long ago. Outside the windows, Milam Street in downtown Houston was deserted. The room had so many filing cabinets that Mitchell worried if the floor could hold all the weight. As midnight came and went, he studied the logs, blue squiggles on thick paper, searching for secrets hidden in the lines like a Talmudic scholar might try to find messages from God.

Mitchell was determined to work harder than any other wildcatter in Houston. During the day, petroleum geologists would go to the Cambe Blueprint Library on Milam Street to search through logs and try to find overlooked signs of oil and gas. In the early 1950s, Mitchell spent his days rounding up investors and listening to deals. At six o’clock in the evening, he walked over to Cambe. The owner, John Todd, was a friend and had given Mitchell a key. He let himself in and walked up the stairs to the library. Todd had left a stack of newly acquired logs out on a table for his friend to peruse before anyone else. Mitchell worked late into the night, unfolding logs that could stretch for dozens of feet. He worked until three o’clock some nights and then would head home to sleep for a few hours.

Each log was like a single piece of a giant jigsaw puzzle. Gather enough pieces—a couple from here and a few from over there—and Mitchell hoped to grasp the picture obscured in the tessellated puzzle. Analyzing a well log is two parts science and one part artistry. Two petroleum engineers who took the same classes and attended the same lectures could look at a well log and reach opposing conclusions. One would see the potential for oil and gas; the other wouldn’t. Some wildcatters had
it,
an ability to see what others didn’t. One night Mitchell stared at the ammonia-based ink describing a new well drilled north of Fort Worth. He saw a hint in the squiggles that sent him to the filing cabinets, pulling out older logs from nearby wells. He thought he saw something: a layer of impermeable rocks. It showed up in the new log and also, at the same depth, in nearby wells. He unfolded more logs, gathering more pieces of the puzzle. Had he found something that others had overlooked? he wondered. Was it possible? It looked like an enormous underground container where the layers of rock had settled just so. If he was right and there was a geologic trap, then over the millennia, gas would have accumulated there underneath the stone awning. And it was just waiting to be tapped by a drilling rig.

Mitchell refolded the logs, filing some back in the cabinets and leaving the new ones on the table for John Todd to sell copies of in the morning. Mitchell had a hunch, but the only way to know if he was right was to drill. And that meant he needed to acquire mineral leases to the north of Fort Worth. He didn’t have to wait long.

During the day, Mitchell and Houston’s other independent oilmen gathered on the ground floor of the Niels Esperson Building, a peculiar prewar edifice topped with what looks like a stone gazebo. For those with the right combination of money, ambition, risk tolerance, and luck, the Esperson was the first stop on the way to a midcentury career as a wildcatter. There was a bank of pay telephones at the back of the ground floor that functioned as a makeshift office for aspiring oilmen. There was a drugstore that served coffee and sandwiches. Bar stools surrounded several zinc-topped tables. And the Esperson was one of the first buildings in swampy Houston to offer air-conditioning. Oilmen would congregate in the drugstore, plop down at tables, unfurl maps, and hash out deals.

Around the time that Mitchell saw the geologic trap during his late-night sessions at Cambe in the 1950s, a Thoroughbred racing bookie from Chicago had become a regular fixture at the Esperson drugstore. He was shopping around some leases and wanted to find a driller. Mitchell met the bookie and looked at the acreage he was offering. It was the rights to drill on a three-thousand-acre ranch in Wise County, immediately north of Fort Worth and in the neighborhood of his puzzle pieces. Mitchell said he was interested and struck a deal with the bookie. This deal would make Mitchell a billionaire. There was a geologic trap there. Decades later, he would figure out where the trapped gas was coming from. It was from the Barnett Shale.

Mitchell was the son of an illiterate Greek goatherd named Savvas Paraskevopoulus, who traded the Peloponnesian Peninsula for the Gulf Coast of Texas. Mitchell was born in Galveston in 1919, a seaside city that was leveled nearly twenty years earlier by one of the deadliest hurricanes in US history. The Mitchells (the name was changed by the father) lived above the laundry and shoeshine parlor run by the family. The two-story brick building is still there. It has been a grocery store, an Italian restaurant, and is now a popular gay bar. After decades in Houston, Mitchell moved back to Galveston not long after his wife of sixty-six years, Cynthia Woods, died in 2009. He lived not far away from his childhood home, in a suite in the Tremont House Hotel, a four-story nineteenth-century building in Galveston’s old commercial district. He lived alone, but the staff doted on him. In the corner of the ground floor, there was a table marked Reserved, where he ate his breakfast. Across the polished marble floor, near a grand piano underneath two towering palm trees in a courtyard that reaches up to a roof full of skylights, was another small round table with wicker chairs pulled tight. It also had a Reserved sign that ensured it was available to him at all hours, every day of the year.

Businessmen and tourists checking into the hotel might have caught sight of the nonagenarian motoring about on a four-wheeled scooter, until he died in July 2013 at the age of ninety-four. A lifetime as an avid tennis player had left him with shot knees. A bumper sticker on his scooter read, “I’m an Aggies Guy,” a nod to Texas A&M University, where he graduated in 1939. As a distinguished petroleum engineering student, he received a gold pocket watch from the university upon graduation. It is a tradition that continues. Every year, Mitchell would purchase two gold watches for the school. One was awarded to an outstanding senior, and the other to the most improved senior.

Over his long life, Mitchell made an enormous fortune pumping fossil fuels from the ground. He was celebrated as a visionary, an engineering genius, and the man who set off the shale revolution. But he also lived long enough to see his legacy tarnished and his signature accomplishment criticized around the world. The jowly man who ate many of his meals at one of his reserved tables, hands dotted with age spots, holding a cane, remained a jumble of contradictions. In the midst of a successful oil career, after fathering ten children, he grew fixated on the dangers of population growth. He worried about using up global energy reserves, yet made his fortune drilling for nonrenewable natural gas. He gambled his energy fortune building a new type of green city outside Houston, but never tried to make Mitchell Energy into a particularly green company. For all his interest in sustainability, Mitchell Energy never invested in renewable energy. It was the “Mitchell paradox,” said his son Todd. “He had one life spending time with global thinkers, thinking about population and resource constraints, but he never took that thread and made it a part of his business life.”

Growing up in Texas before World War II, Mitchell was drawn to engineering. He was a born dreamer. One year during his childhood, he built a sled in hopes of using it in the snow. But Galveston, located on a flat sand-barrier island in the bathtub-warm Gulf of Mexico, was not an ideal place for sledding. He followed his brother Johnny to Texas A&M. During a summer break from college, the brother got Mitchell a job working in the oil patch. Hooked by the excitement, he returned to college in the fall with the goal of entering the oil business. He graduated with a degree in petroleum engineering but also took as many courses as possible in geology. It was an odd combination. Geology tends to appeal to optimists convinced there’s oil just a few turns of the drill bit away. Engineers tend to be more hard-nosed realists, not dreamers. Improbably, Mitchell embodied both.

In college, he studied with Harold Vance, a midcentury giant in the trade for whom Texas A&M’s petroleum engineering department is named. Years later, Mitchell recalled a bit of advice from Vance. Referring to Humble Oil and Refining, a well-known company that later became part of Exxon Mobil, the professor said, “If you want to go to work for Humble, fine, then you can drive around in a pretty good Chevrolet, but if you want to drive around in a Cadillac, you’d better go out on your own.” That advice suited Mitchell’s personality. He didn’t want to work inside a large company. He wanted to work for himself, taking the risk and capturing the reward. A bit of a throwback to the vanishing era of Houston wildcatters, he was different in other ways from the other oilmen who gathered in the Esperson Building. His liberal streak set him apart from a city of oilmen who embraced ultraconservative causes and candidates. While his fellow oilmen built trophy mansions in Houston’s exclusive tree-lined neighborhoods, Mitchell dreamed of building a new community that would become a showcase of racial harmony and pioneer the new idea of sustainable development. He eventually built the community in the 1970s and 1980s and named it the Woodlands, in honor of his wife.

By 1946, Mitchell had settled in Houston after having graduated from Texas A&M and a brief stint in the US Army Corps of Engineers. He teamed up with his brother Johnny to create an oil exploration company. Johnny was a bit of a playboy, and his charisma helped him woo financial backers. He signed up Barbara Hutton, the Woolworth heiress. Together the brothers enlisted many of the prominent Jewish families in Houston. While Johnny was the promoter, George was the geologist. He found places to drill. In 1951 he drilled on the lease bought from the bookie, which had first caught his interest in his late nights on Milam Street. The first well—the D. J. Hughes #1—struck natural gas. (Sixty years later, gas still was coming out of it.) The next ten wells also found gas. Mitchell was ecstatic. He had discovered a geological gas trap. He was convinced that this trap extended for quite some distance. Mitchell and his partners began to lease up as much of Wise County as they could afford. Within three months, they had acquired leases to nearly five hundred square miles.

Other oil companies had sniffed at Wise County in search of oil and had drilled dry holes. At least, they thought they were dry. If the geologist in Mitchell led him to see that the area had the right rocks and geological qualities, it was the engineer in him that helped him realize that getting out the oil and gas would require a new approach. Mitchell was fortunate to have acquired this acreage at the dawn of hydraulic fracturing. The D. J. Hughes well was drilled in late 1951. Bob Fast and his colleagues at Stanolind had only just begun to introduce their new hydrafrac to the world. The first paper was presented at a small gathering of engineers in Dallas in 1948. Many of the Esperson oilmen still played hunches in deciding where to drill. Mitchell made it a point to read all of the new petroleum engineering literature. This new technique intrigued him.