National News

July 26, 2013

Mitchell’s tenacity led to US energy boom

NEW YORK — The technological breakthrough pioneered by George P. Mitchell, the billionaire Texas oilman and philanthropist who died Friday at age 94, reversed the fortunes of the U.S. energy industry and reshaped the global energy landscape.

As Mitchell was doggedly pursuing the natural gas he and others knew was trapped in thin layers of sedimentary rock under several U.S. states, it appeared to most that the world was running out of oil and gas and what was left was found mostly in the Middle East.

U.S. natural gas production had peaked in 1972 and prices were rising to alarming new levels in the middle of the 2000s, raising heating and electricity bills and sending U.S. manufacturers of plastics, fertilizer and countless other natural gas-dependent goods overseas.

U.S. oil production, meanwhile, had peaked in 1970, and fell every year but one between 1985 and 2008.

But after 20 years of trying, Mitchell finally learned how to combine horizontal drilling with hydraulic fracturing, a process together known now generally as fracking, to release natural gas at a rate fast enough to turn a profit. But the practice has also sparked powerful antagonism, especially in the Northeast, from residents and environmentalists opposed to increased industrial activity in rural areas and concerned that the fracking process or the wastewater it generates can contaminate drinking water.

By the mid-2000s, fracking had spread across the industry and the country, and natural gas production in the U.S. began to soar in such places as Pennsylvania, Arkansas, Louisiana and Texas. In 2005, the U.S. produced 19 million cubic feet of gas, about the same amount produced in 1968. Last year, the U.S. produced 25 million cubic feet, a U.S. record and more gas than any other nation. And all this while drillers held back: They would have produced more if prices hadn’t fallen to 20-year lows.

But this cheap gas lowered energy bills for consumers and inspired plans for new chemical plants, steel plants and fertilizer plants around the nation from manufacturers looking to capitalize on some of the lowest natural gas prices in the world. Electric utilities drastically increased the use of natural gas to generate power, and cut back on the use of coal, helping the U.S. power industry substantially reduce its emissions of carbon dioxide.

The U.S. now has the potential to produce so much gas that companies are looking to export it to Europe and Asia, just five years after regulators were approving plans to import natural gas in hopes of avoiding an energy crisis.

In some areas fracking has been blamed for air pollution and gas leaks that have ruined well water, but the Obama administration and many state regulators say the practice is safe when done properly. New York, which is thought to have considerable natural gas resources, has imposed a moratorium on high-volume hydraulic fracturing and star-studded activist groups have staged countless rallies and events to generate opposition to the practice.

As natural gas drillers were perfecting fracking, oil engineers learned to adapt the process to squeeze crude out of oil-bearing rock. By 2008, they had learned to tap oil deposits in formations in North Dakota and South Texas, and U.S. oil production started to creep up. It soon boomed.

Last year U.S. crude production rose to 6.5 million barrels per day the U.S. after posting the largest single-year rise in oil production since 1951, and production is on track to rise to 7.3 million barrels per day this year. That’s an increase of 46 percent since 2008. The increase of 2.3 million barrels per day is about as much oil as Venezuela produces. The International Energy Agency says the U.S. is on track to be the world’s biggest crude producer by the end of the decade.

 

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