Hydraulic fracturing, commonly known as fracking, has changed America’s energy profile and could potentially upend the global energy market. Just this week, the International Energy Agency said the U.S. will overtake Saudi Arabia and Russia as the world's largest oil producer by 2015. It’s a development with huge economic and geopolitical ramifications, as has been widely reported.
Less often discussed is why this revolution occurred in America – and not China, Russia, Canada or other countries with big shale deposits.
“This is a real American story,” says Greg Zuckerman, WSJ special reporter and author of, most recently, The Frackers. “Frankly, a lot of hard American perseverance did it.”
In the accompanying video, Zuckerman discusses the frackers at the center of his book -- men he calls “American dreamers” including:
George Mitchell: Often called “the father of fracking,” Mitchell was convinced there was a gusher of oil and gas trapped in shale rock. Mitchell spent about 15 years and nearly bankrupted his company before finally finding the right formula.
Harold Hamm: The son of cotton pickers, Hamm grew up “dirt poor,” Zuckerman reports, but is now one of the world’s wealthiest men, with an estimated net worth of $14.5 billion. “A real American rags to riches story,” Zuckerman notes.
Aubrey McClendon: McClendon and partner Tom Ward started Chesapeake Energy (CHK) with $10,000 and built it into the country’s second-largest energy producer. But McClendon’s aggressive style ultimately proved his undoing; the company took on too much leverage and didn’t realize its own increased production would drive down natural gas prices. Ultimately, McClendon was widely criticized for his lavish pay packages and for mixing personal business with corporate entities.
Charif Souki: A Lebanese immigrant, Souki originally built his company – Cheniere Energy (LNK) – to be a major processor of imported natural gas. Like many, Souki thought America was going to run out of natural gas but “turned on a dime” and literally and figuratively “figured out a way to turn things around,” Zuckerman says. Now Cheniere is going to be the first company to export natural gas from America.
In sum, the fracking revolution proves the 'American Dream' isn't dead yet, despite reports to the contrary.
- International Energy Agency