In Ancient China, the Emperor went out every spring and walked the fields to bless the harvest and encourage the crops to grow. Sure enough, when the peasants put the seeds in the ground, the crops appeared and the Emperor took credit.
The job of President of the United States is often much the same. According to the legend embraced by some, he is responsible for just about everything good that happens in the country. If a group of wildcatting oil geologists in North Dakota, for instance, use 3-D seismographic to discover a whole new strata of shale oil, and if “fracking” techniques developed in Texas should make these deposits accessible for the first time in history — well then, it must be the President who made it all happen.
This was the mantle, at least, that President Barack Obama was willing to assume last week when he declared in his State of the Union address:
Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my administration to open more than 75 percent of our potential offshore oil and gas resources. Right now — right now — American oil production is the highest that it’s been in eight years. That’s right — eight years. Not only that — last year, we relied less on foreign oil than in any of the past 16 years.
Now those with long memories might be wondering at this point from whence this new enthusiasm for fossil fuels. They might remember the President’s Inaugural Address three years ago when he proclaimed:
We will harness the sun and the winds and the soil to fuel our cars and run our factories.
They remember that the words “oil” or “gas” or “fossil fuels” were never mentioned on that January afternoon.
Then there was the Deepwater Horizon Oil Spill after which the President suspended all new drilling in the Gulf of Mexico and then after the ban was lifted made it so difficult to secure new permits that most drilling rigs have long left the Gulf for Brazil, the coast of Africa, and other more hospitable places around the globe.
Most curious of all, however, is the President’s claim to have opened up “millions of new acres for oil and gas exploration,” implying that this is why “American oil production is the highest it has been in eight years” so that “we relied less on foreign oil than in any of the past 16 years.” As more than one wag suggested, once you’ve run an economy into the ground with 9 percent unemployment, you’re bound to get a little decreased oil consumption.
The Institute for Energy Research is one of those Washington think tanks that runs around trying to keep track of such proclamations. Before the newspapers were on the stands the next day, IER had put out a report casting a little light on the President’s claims. One of its graphs shows the number of permits for oil and gas exploration issued by the Bureau of Land Management. As IER notes, the Obama Administration has auctioned off less than half the number of leases annually as the Clinton Administration.
Then there were graphs illustrating the production of oil and gas on federal lands as opposed to private and state lands: As the numbers show, the obvious trend has been reduced production on federal lands and increased production from the private and state sector:
Now this is not necessarily a bad thing. When Theodore Roosevelt and Gifford Pinchot conceived the Conservation Movement, they cast the federal government in the role of an aristocratic landholder who is not troubled by an immediate need for money but is able to hold resources off the market in anticipation that they will later become more valuable. This speculative venture is the way the market conserves resources. It is not the government alone that follows this practice. Last week Chesapeake Energy, the nation’s second largest developer of natural gas, announced it will drill no more wells in the Marcellus Shale for the time being because the price of gas has dropped so low. It will save the resources for another day. President Obama is doing the same thing with federal resources. He can certainly take credit as the nation’s Chief Conserver. But Oil-and-Gas-Developer-in-Chief? Best save that for the wildcatters out in the Marcellus and the Bakken.
Most curious of all was the President’s claim that if there has been a boom in natural gas production over the past decade, government research was responsible:
The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy. And by the way, it was public research dollars, over the course of thirty years, that helped develop the technologies to extract all this natural gas out of shale rock — reminding us that Government support is critical in helping businesses get new energy ideas off the ground.
This is a claim put forth in December by the Breakthrough Institute in a paper entitled “Decades of Government Funding Behind Sale Revolution.” Breakthrough is the brainchild of Ted Nordhaus and Michael Shellenberger, authors of the 2003 essay, “The Death of Environmentalism” (and subsequent book), in which they argued that environmentalism had become too “timid” and “complaint-based” and should leverage global warming to become grandiose and ambitious once again. “The Era of Small Thinking is Over” is their slogan. Naturally such a group needs a bigger government to fulfill its plans and so it spends time trying to show government is responsible for all good things.
Most people who know the history of fracking technology give credit to George P. Mitchell, the Texas wildcatter who spent twenty lonely years trying to pry gas out of the Barnett Shale with his pioneering technology. Breakthrough corrals Dan Stewart, however, a former vice president at Mitchell Energy who is willing to give the federal government some credit. “They did a hell of a lot of work, and I can’t give them enough credit for that,” says Stewart, obviously with an eye on the next Department of Energy grant. “DOE started it, and other people took the ball and ran with it. You cannot diminish DOE’s involvement.”
DOE’s involvement, it turns out, consisted mainly of research done in the 1970s by the Carter Administration during the “Energy Crisis.” The 1976 Eastern Gas Shale Project mapped fields in Appalachia and made some early estimates of the potential of shale gas deposits. Mitchell later drew on this research in tackling the Barnett.
We got the DOE and GRI involved in the Barnett in the early 1990s. [The GRI is the Gas Research Institute, the private research arm of the gas industry.] Mitchell hadn’t wanted to get them involved because we were trying to understand it and didn’t want competition for the Barnett until we had a handle on what we were doing.
By the early 1990s, we had a good position, acceptable but lacking knowledge base, and then Mitchell said, “Okay, I’m open to bringing in DOE and GRI” in 1991.
DOE participation involved paying one-third the cost of the first horizontal well and contributing to the development of microseismic mapping techniques at the Sandia National Laboratory. “The DOE gave money to the GRI, and the GRI kept DOE updated,” Stewart recalls. But while the DOE was putting up money here and there, it was Mitchell who bore the brunt of the risks:
Mitchell had the money to invest in R&D. And he had the vision. He had people in the company saying this is bulls–t, this is wasting our money, you’re using our retirement money on something that’s no good. They’d say, “Dan, if Barnett is the best thing we have, then we don’t have s–t.”
Breakthrough did not interview Mitchell, although he might have shed a little more light on the situation.
So does all this mean that President Obama can claim credit for the shale boom as well? Or is this just a case of victory having a thousand fathers?
CNN unleashed a “truth squad” after the President’s speech and came to the following conclusion:
Federal research helped boost shale research in the last decades of the 20th century, particularly in the 1970s. But private industry originated the technology and picked up the slack as federal investments in research waned.
Most fascinating of all, however, is a single bland sentence in the Breakthrough report that describes one of the federal government’s earliest attempts to unlock gas from shale deposits:
The U.S. for years funded radically experimental efforts, including large explosions underground, that were too expensive and risky for private firms to do.
As CNN discovered, it’s a little more interesting than that. These early experiments were nuclear explosions:
[O]ne series of tests in the late 1960s and early 1970s raises eyebrows today. In the ultimate “fracking,” the U.S. government attempted three times to use nuclear bombs to open up subterranean gas formations in the Rocky Mountains — two in western Colorado and one in New Mexico. The tests produced less gas than predicted, and what was freed was radioactive.
I say let’s let Obama take credit for that one.
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