Authors: Lawrence Wright
Five thousand energy-related companies make their home in Houston, the world’s energy capital, and the effect of the crash in prices caused by the shale oil boom was evident in the slowdown in home sales, empty office buildings, and diminished traffic on the freeways. One Houston restaurant in the storied River Oaks neighborhood, Ouisie’s Table, began offering a three-course meal each Wednesday night pegged to the price of a barrel of oil—when I visited in the spring of 2016, it was about $38. At oil’s peak in June 2014, that meal might have cost $115. Between January 2015 and December 2016, more than a hundred U.S. oil and gas producers declared bankruptcy, half of them in Texas. That doesn’t count the financial impact on the pipeline, storage, servicing, and shipping companies that depend on the energy business, and the colossal debt—$74 billion so far, much of it unsecured—that these failures leave behind.
Recently, I drove to North Texas to visit the well that started the revolution, the S. H. Griffin No. 4. It stands amid a little community of prefab homes and tidy brick bungalows, marking the extended reach of the Fort Worth suburbs. The town used to be called Clark, but a decade ago the mayor made a deal with a satellite network to provide ten years of free basic service to the two hundred residents in return for renaming the town after the company, using all capital letters, as in the company logo. Satellite dishes still sit atop many houses there, and even though the agreement has expired, the town’s name remains—DISH.
This part of Texas is flat grassland dotted with scrubby mesquite. You see a lot of heavy industry associated with pipelines and drilling. Tanker trucks, which carry the millions of gallons of water required to frack a well, and tractor trailers known as SandCans, which haul silica to the site, have worn down the roads. Each drilling rig is huge and arrives disassembled, in a dozen truckloads of parts. There’s also the four-inch metal pipe for the hole, which comes in thirty-foot lengths weighing six hundred pounds apiece; the concrete to encase the pipe; and the carbon-steel transmission pipes, between two and three feet in diameter, that transport the gas to storage containers. About 1,200 truck deliveries are needed for every well that is fracked.
Before the fracking comes the drilling. In the Barnett, holes go down about six thousand to eight thousand feet, substantially below the water table. Once the desired depth is reached, the drill slowly bends until it becomes horizontal, for as much as another ten thousand feet.
There is a science-fiction quality to the fracking process. Several tubes, called perforating guns, are snaked to the end of the well bore. The guns contain explosives that rupture the surrounding strata. Meanwhile, on the surface, twenty or so trucks line up on either side of the well. Pipes and hoses emanating from the trucks connect to a metal apparatus known as a manifold, which looks like a giant alien insect. A mighty sound suddenly erupts as the trucks begin pumping eight hundred gallons of fluid and proppant a minute into the manifold and down the well, opening up fresh microfractures in the shale. The process is repeated again and again until the entire horizontal plane of the well has been blasted open. It takes about a month to bring a well into production.
The S. H. Griffin No. 4 is in a grassy field inside a cage of chain-link fencing. It looks small and inert on the surface, and few neighbors seem to appreciate its historic significance. Unlike an oil well, there is no pump jack. Instead, the well is capped by what is known in the industry as a “Christmas tree”—a bunch of pipes and valves that control the flow of gas and direct the emissions into olive-green condensate tanks.
On the northern horizon, there was a cloud of black smoke, perhaps from an oil fire or a gas flare.
Fracking is a dark bounty. It has created enormous wealth for some. The flood of natural gas has lowered world energy costs and blunted the influence of traditional oil economies, such as Saudi Arabia and Russia. It has also despoiled communities and created enduring environmental hazards. As in many Texas towns where fracked wells have become commonplace, the citizens of DISH were anxious. In 2010, the little town paid $15,000 for an air-quality study. It found elevated amounts of benzene, a carcinogen, and other harmful chemicals, but not at levels that are known to endanger health. “If you drew a circle of a mile around my house, there were probably two hundred wells inside it,” the former mayor, Calvin Tillman, told me. His children started getting nosebleeds when gassy odors were present. “One of my boys got a nosebleed that was all over his hands,” Tillman recalled. “There was blood dripping down the walls. It looked like a murder scene. The next morning my wife said, ‘That’s it.’ ” They sold their house at a loss and moved to a community that is not on the Barnett Shale. The nosebleeds went away. (Since then, additional emission controls have been installed on the wells around DISH.)
The frackers advanced fifteen miles northeast, to the city of Denton. It is now thought to be the most heavily fracked city in the country. Wells have been drilled near schools and hospitals, and on the campus of the University of North Texas. In 2008, multiple earthquakes were recorded in the area, and according to a study conducted at Southern Methodist University, in Dallas, more than two hundred quakes have followed. The study concluded that the quakes have most likely been caused by the 1.7 billion barrels of wastewater that have been pumped into the region’s 167 “injection” wells, which are used to dispose of fracking fluids. Even after environmental activists recorded twelve earthquakes over a twenty-four-hour period in and around Irving, where ExxonMobil is headquartered, in January 2015, energy executives and state regulators maintained that the earthquakes were a natural phenomenon.
“I started sounding the alarm pretty early,” Sharon Wilson, who once worked in the energy industry, told me. In 2008, she sold the mineral rights on a small horse ranch that she owned in Wise County. “My air turned brown and my water turned black,” she said. “I moved to Denton, thinking that my family would have some level of safety there.” As she was unpacking, she noticed a well being drilled across the street from a nearby city park.
George Mitchell had been reluctant to admit that the fracking revolution that he unleashed had damaging consequences for the environment. “He was caught off guard by the backlash,” his son Todd, a geologist, recalls. Todd informed his father that, although natural gas caused less air pollution than coal, industrial leakages of natural gas—especially of methane, a potent greenhouse gas—could render it no better than coal in terms of global warming. Mitchell also came to appreciate the damage caused by the industrialization of the landscape in communities subjected to intensive drilling. In 2012, the year before he died, he and New York City mayor Michael Bloomberg coauthored an op-ed for
The Washington Post,
arguing for increased regulation. “The rapid expansion of fracking has invited legitimate concerns about its impact on water, air and climate—concerns that the industry has attempted to gloss over,” they wrote. “Safely fracking natural gas can mean healthier communities, a cleaner environment and a reliable domestic energy supply.” Mitchell expressed himself more succinctly to his son-in-law Perry Lorenz, an Austin developer. “These damn cowboys will wreck the world to get an extra one percent” of profit, Mitchell said. “You got to sit on them.” Unfortunately, Mitchell’s plea has gone largely unheeded in Texas.
Sharon Wilson began volunteering in Denton for Earthworks, a national environmental organization with a focus on accountability in the oil and gas industry. Earthworks joined forces with a local organization, the Denton Drilling Awareness Group. Their campaign led, in November 2014, to a ban on fracking in the city limits. “It should send a signal to the industry that if the people in Texas—where fracking was invented—can’t live with it nobody can,” Wilson said at the time.
In short order, the state legislature, which is slavishly devoted to the oil-and-gas industry, passed a law prohibiting any such ban. Now cities in Texas have almost no recourse when frackers move in. There are three hundred wells in Denton already, and a third of the landmass of the city has been platted for future wells, now that the legislature has given the green light. “People think there are health consequences,” Ed Soph, who used to teach jazz studies at the university, told me. “Kids were getting asthma. There were nosebleeds and headaches. The silica coated the neighborhood in dust. There was the odor, the noise. The kids couldn’t play outside—they would get sick. It’s that simple.”
In October 2015, unable to stop fracking in the city, the Denton Municipal Electric utility announced its intention to derive 70 percent of its electricity from renewable resources by 2019, making it one of the cleanest energy providers in the state.
In September 2016, Apache Corporation, a Houston-based oil and gas exploration company, announced the discovery of an entirely new field in the Permian Basin, called Alpine High, estimated to contain 75 trillion cubic feet of gas and 3 billion barrels of oil. That was followed in November by an announcement from the U.S. Geological Survey that the Wolfcamp formation within the Permian Basin contains an estimated 20 billion barrels of oil—“the largest continuous oil accumulation that USGS has assessed in the United States to date,” according to the agency—plus an additional 16 trillion cubic feet of natural gas. Within a decade, the assessment of newly discovered recoverable oil in the Permian Basin alone has increased by more than 800 percent. Moreover, productivity per well has shot up; according to Robert Bryce, the amount of oil produced by a new well in the Permian stayed flat from 2007 to 2013, at about one hundred barrels per day. But from 2013 to 2016—while the rig count was falling dramatically—the productivity of a new well rose to five hundred barrels a day, a fivefold increase in three years. Multiply that rate of productivity by the newly discovered oil, and factor in the declining cost of recovery, and you will have a rough calculation of the future of energy.
The little town of Balmorhea lies within the vast Apache field, as does one of the most glorious spring-fed swimming holes in the state, an oasis more than an acre in size, which attracts tourists from all over the world. Aside from the natural beauty, the pool is home to two endangered species of fish. Locals are concerned that the water table will be contaminated by leakage from a disposal well, or an earthquake (the town happens to sit on a geological fault line). Apache, which maintains that its methods are “safe and proven,” promises not to drill within the town limits or beneath the state park that contains the swimming hole, but it’s hard to imagine that there won’t be considerable environmental consequences from the five thousand wells envisioned to extract all that oil.
Those costs have to be measured by other benefits—the decent jobs that will come to the region, for instance, and the taxable income that will support city services. There are also undeniable geopolitical advantages in reducing American dependence on foreign oil and lowering the cost of energy. Because of fracking, there is an abundance of natural gas, which is killing demand for coal, a trend that the Trump regime is unlikely to be able to stop. Gas burns far cleaner than coal, and as a result, greenhouse gas emissions in the United States are at their lowest point in a quarter century.
Texas is the only state to have its own electrical grid, which was created largely to avoid federal regulations. The state invested $7 billion in high-voltage transmission lines to carry wind power through the shrub-covered plains eastward toward the cities. Because of the intense energy needs of the oil and gas business involving oil refineries and petrochemical plants, Texas uses far more electricity than any other state—67 percent more than second-place California. And yet electricity in Texas is cheaper than the national average, in some places actually free at night. That’s because Texas gets about 17 percent of its electricity from wind power, and wind generally blows more at night, when demand is lower. The plains and caprock mesas of West Texas, as well as the coastal region south of Galveston, are lined with regiments of wind turbines. They are so heavily subsidized by the federal government that the wind-energy producers sometimes pay companies to take the energy off their hands in order to receive their federal tax credits. On some days, wind satisfies half of the state’s electricity demand. In the first quarter of 2017, wind generation accounted for 23 percent of the power generated in the state. In October, Jeff Bezos, the founder of Amazon, broke a bottle of Champagne atop a three-hundred-foot turbine to inaugurate a vast new wind farm in Scurry County, in northwest Texas, which will provide another million megawatt hours a year to the grid. Solar energy is also growing, but has been slower to catch on, despite abundant and intense sunshine. Austin gets nearly a fourth of its power from renewable sources and aims to double that in ten years. Georgetown, just north of Austin and one of the most conservative suburbs in the state, already gets all of its electricity from renewable sources.
Nick Fowler, the younger brother of Mack Fowler, the oilman I met in Houston, operates a petrochemical plant in Odessa. Nick is a ruddy man whose strikingly white hair and moustache look like a disguise. He is what is known as a “downstream” oilman. Upstream are the people who find the oil and the money to drill. Midstream are the pipeline operators and people who move the product to refineries and to market. At the end of the stream, Nick makes a kind of plastic that is a by-product of the refining of gasoline. “We take a hydrocarbon and turn it into a polymer,” he explained, as he showed me around the plant, with its inscrutable towers and a maze of pipes and gangplanks. I remembered as a child seeing plants like this lit up at night on the flat horizon like some kind of
Nick handed me a sample of his end product, a malleable glob, which in the trade is called a “potato,” although it more closely resembles a pregnant ravioli. “It’s a form of polypropylene used for hot-melt adhesives,” he told me. I recognized it then as the same substance I use in a hot-glue gun. When melted, the potato becomes spreadable. “The biggest use is in the assembly of non-woven materials, like in feminine hygiene products, disposable diapers, panty liners, adult incontinence,” Nick said. “Our adhesives hold the layers together. Diapers are a very complicated structure.”
Unfortunately, on the day I visited, the plant was on the blink. As he drove me through the facility, Nick rolled down the window and stopped to talk to his three engineers. A train car was waiting to take the next shipment of polymer to market, and who knows how many fortunes were being lost, but the engineers were unfazed. Actually, they all seemed a little amused and excited. They had an interesting problem to work on. The lead engineer, J. J. DeCair, speculated about what might be wrong, possibly a water leak in a condenser. Nick drove on, praising his crew. J.J. was self-taught, “an American genius of the same ilk as Wilbur and Orville Wright.” It takes a lot of ingenuity to run a petrochemical plant. Here they were, in one of the most desolate parts of Texas, on a hundred-degree day, having a pretty great time.
Later that afternoon, Nick drove me to the Odessa Country Club for dinner. On the highway next to a strip club there was a large lot where unused oil rigs were stored. Every Friday at noon, Baker Hughes, a giant oil-field-services company in Houston, releases a “rig count”: a measure of how many new wells are being drilled in the U.S. It is the most closely watched barometer of the drilling industry’s health. On that Friday evening in June 2016, when Nick and I went to dinner, only 421 rigs were being put to use in the U.S., less than a tenth of the 4,500 rigs that were at work in December 1981, the highest count since records began to be kept. In the lot that Fowler and I passed, there were 47 unused rigs lined up in parallel ranks. “They cost fifteen to eighteen million dollars apiece,” Nick observed. He estimated the total investment of the idle rigs to be as much as $850 million.
We sat in the empty dining room watching a storm blow in across the flayed landscape. Golfers raced into the clubhouse as lightning lit up the giant black sky like war. The rain itself was paltry, typical of the noisy, uncharitable storms of this part of Texas.
Through the picture window, the idle rigs on the horizon, illuminated by the blinding flashes, looked like ideal lightning attractors. There have long been dreams of harvesting the electrical power of Texas’s many lightning strikes. In 2006, a company called Alternative Energy Holdings announced its intent to create lightning farms, and it actually set up an experimental lightning-capture tower in Houston, where there are lots of electrical storms and a huge demand for power. Nothing came of it, but I was reminded of the scene in
Back to the Future
where Marty McFly has to capture energy from a lightning bolt on the clock tower in order to power his DeLorean back to present time.
I asked Nick if he ever thought of leaving Odessa. “Only on mornings when the sun rises in the east,” he admitted. “When the weather’s nice, it’s delightful, although it’s still not very attractive.” On the other hand, he liked being in a place where “the people at the laundry know your name.” Mainly, he was comforted by the 210 good jobs he provided.
Fracking saved the economy of the Permian Basin, Nick observed, but it wasn’t going to last forever. When he and Mack were boys, their parents took them on vacation to Colorado, and they stopped in Leadville, headquarters of the great silver boom in the 1880s. Leadville then sported a dozen theaters, including the grand Tabor Opera House, where Oscar Wilde and Harry Houdini performed. The lobby floor of a hotel was paved with silver dollars. After Denver, it was the largest city in the state. Only a few thousand people live there now. It’s a meager tourist stop, gateway to the gold-mining ghost towns in the mountains. At best, Nick said, the Permian Basin has another twenty-five years before it follows the same path. “Fortunes change. People move on. How can it be any different in Odessa?”