Happy Birthday, Fracking!

Mark Green
Posted March 17, 2014

Happy Birthday, Fracking!

Happy birthday, fracking! What a fantastic, 65-year ride it has been – and here’s to another 65 years and more.

Advanced hydraulic fracturing and horizontal drilling launched an oil and natural gas renaissance in this country – bringing dynamic job creation, economic stimulus that radiates well beyond the oil and natural gas industry proper and greater energy security. Thanks to fracking, the United States is an energy superpower that, with the right policies, can harness its vast resources to ensure a significantly better future for its citizens while reducing energy-related tension across the globe.

More on the benefits of hydraulic fracturing below, but first let’s take a look at how we got here. We celebrate the first commercial use of hydraulic fracturing 65 years ago on March 17, 1949, conducted by Halliburton in Stephens County, Okla., and Archer County, Texas. But the roots of the fracking story stretch back to the 1860s. In a 2010 article for the Society of Petroleum Engineers’ Journal of Petroleum Technology (JPT), NSI Technologies’ Carl Montgomery and Michael Smith write that energy pioneers experimented with oil well “shooting” that would “rubblize” oil-bearing rock to increase flows. Various methodologies were used to fracture rock formations over the years until Stanolind Oil, a division of Standard Oil of Indiana, conducted the first experimental “hydrafrac” in 1947 in Kansas. It involved pumping fluid carrying “propping agents” at high pressure into a well to create fractures that could be held open to free oil and natural gas in the rock. JPT:

A patent was issued in 1949, with an exclusive license granted to the Halliburton Oil Well Cementing Company (Howco) to pump the new Hydrafrac process. Howco performed the first two commercial fracturing treatments—one, costing $900, in Stephens County, Oklahoma, and the other, costing $1,000, in Archer County, Texas—on March 17, 1949 … In the first year, 332 wells were treated, with an average production increase of 75%. Applications of the fracturing process grew rapidly and increased the supply of oil in the United States far beyond anything anticipated. Treatments reached more than 3,000 wells a month for stretches during the mid-1950s.

Halliburton took the investment risks, ventured forth and marked the opening of a new era in energy development. From “The Legend of Halliburton”:

The investment was risky for Howco, with hundreds of thousands of dollars at stake. Bob Diggs Brown, former vice president of sales and advertising, said Howco’s chief engineer, Bill Owsley, was convinced of the concept’s potential. “It wasn’t a cheap prospect at a point in time when the process hadn’t really been proved. But Bill Owsley, bless his heart, was just right for Halliburton. He convinced Mr. Halliburton.”

The onset of the modern shale revolution came with the marriage of advanced fracking and horizontal drilling, allowing operators to sink a well a mile or more deep before gradually turning it from vertical to horizontal – often stretching out another 6,000 feet or more and allowing a single well site on the surface to accommodate a number of wells. Today, according to the U.S. Energy Information Administration (EIA), fracking is responsible for 3.5 million barrels per day of oil production (45 percent of U.S. total) and 40 billion cubic feet per day of natural gas production (60 percent of total).

EIA’s Annual Energy Outlook 2014 Early Release shows how important hydraulic fracturing is to our energy present and future. So-called “tight oil” developed from shale and other tight-rock formations with hydraulic fracturing will play the major role in letting the U.S. near historic oil output levels over the next couple of years, EIA projects:

Similarly, EIA says natural gas from shale will lead overall U.S. growth:

When data for 2013 is complete, EIA estimates the U.S. will be the world leader in combined oil and natural gas production for the year. Thanks, fracking.

These numbers only suggest the impact that energy safely and responsibly developed with hydraulic fracturing is having and will have on the lives of individual Americans and our broader economy. Numbers from an IHS study help complete the picture:

• In 2012, unconventional oil and natural gas from fracking and energy-related chemicals activity supported more than 2.1 million jobs.

• By 2025 this activity will support nearly 3.9 million jobs.

• In 2012, energy from fracking and related chemicals activity contributed almost $284 billion to GDP. By 2025 the contribution could approach $533 billion.

Abundant, affordable energy from shale has helped fuel a U.S. manufacturing resurgence – as companies fill orders for materials and equipment used in energy development and as they and others realize energy savings in their operations. Overall, the U.S. manufacturing sector has added more than 500,000 jobs since 2009, IHS says.

For U.S. households, the energy surge made possible by fracking has produced household savings through lower natural gas prices. IHS estimates that in 2012 this meant an increase in real disposable income of more than $1,200 per household, which will grow to $2,000 per household in 2020 and more than $3,500 in 2025.

Hydraulic fracturing is safe and well-regulated by federal and state regimes. The technologies and processes continue to be improved, guided by industry standards developed from experiences in the field and which undergo rigorous review before adoption. Here’s what some say about fracking:

U.S. Interior Secretary Sally Jewell:

“Fracking as a technique has been around for decades. … I have performed the procedure myself very safely.”

Former Obama Interior Department Secretary Ken Salazar:

“From my opinion and from what I’ve seen … I believe hydraulic fracturing is, in fact, safe. … We know that, from everything we’ve seen, there’s not a single case where hydraulic fracturing has created an environmental problem for anyone.”

Former Obama Energy Department Secretary Steven Chu (Columbus Dispatch):

Drilling for shale gas can be done safely, and at least one prominent study about the risks is not credible, said Steven Chu, until recently the U.S. secretary of energy, speaking in Columbus yesterday. The availability of natural gas from shale, including from Ohio, likely will lead to decades of low gas prices, Chu said. He also thinks the energy can be extracted in an environmentally responsible way. “You can have your cake and eat it, too,” he said.

Colorado Gov. John Hickenlooper, a trained geologist with first-hand knowledge of fracking:

“I was personally involved with 50 or 60 (fracked) wells. There have been tens and thousands of wells in Colorado … and we can’t find anywhere in Colorado a single example of the process of fracing that has polluted groundwater.”

Finally, with another nod to fracking, increased use of natural gas has helped lower U.S. energy-related emissions of carbon dioxide to their lowest level in two decades, according to EIA.

So, add it all up – energy, energy security, economic growth, job creation, per-household savings, a cleaner environment – and there’s a lot to celebrate as commercial hydraulic fracturing turns 65. While birthday celebrations traditionally include giving gifts to the one having the birthday, in the case of fracking the presents are all ours.