Don’t miss the latest developments in business and finance.

Patient pioneer

Shale trailblazer leaves a world awash with crude

Image
Christopher SwannKevin Allison
Last Updated : Jul 30 2013 | 10:39 PM IST
George Mitchell, who died at 94, left a deeper mark on the global energy business than any entrepreneur of his generation. The technique he pioneered to extract oil and gas from difficult rock unleashed a torrent of US oil and gas output and an environmental backlash to match. Controversy aside, Mitchell's 17-year struggle to develop hydraulic fracturing also offers a lesson in escaping the tyranny of quarterly reporting.

Before Mitchell's drilling methods were more widely adopted around 2007, the United States appeared to be running out of both oil and gas - the first signs of a global shortage, many pessimists thought. Mitchell nearly single-handedly helped reverse this trend.

His technique - which uses high-pressure fluids to crack open energy-rich rocks - was so successful that it ended up creating a glut of US gas that sent prices plunging to decade lows. American production of oil has also climbed 44 per cent since Mitchell's method started being commonly used to extract oil around 2008. For the first time in a generation the country can aspire to liberate itself from reliance on foreign producers. The innovation has since gone global, with companies seeking shale reserves everywhere from Britain and Poland to Argentina and China.

More From This Section

Many environmentalists believe this comes with a high ecological price tag. Protesters claim that the technique pollutes ground water - though there is evidence this is the case only when drillers fail to adhere to best practices. More worrying for environmentalists, is the idea that the vast energy trove that Mitchell helped uncover will make it harder for the globe to wean itself off fossil fuels and stabilise the climate.

In addition to its global impact, fracking enabled Mitchell, the son of a poor Greek goat-herder, to amass a fortune of around $2 billion. That didn't come without a struggle. Mitchell spent almost two decades trying to perfect hydraulic fracturing against the protests of skeptical engineers and board directors. A host of others, including a deep-pocketed major oil firm, gave up on the technique as a waste of money, according to Daniel Yergin's "The Quest," a history of modern energy. Only a high level of personal control of his company, Mitchell Energy and Development, enabled him to follow through on his costly mission.

In a world where investors resist delayed gratification, Mitchell showed what can be achieved with patience and determination.

Also Read

First Published: Jul 30 2013 | 9:32 PM IST

Next Story