February 28, 2013
US Government Role in Shale Gas Fracking History: An Overview and Response to Our Critics
Below is an overview of our investigation into the history of government support for shale gas fracking. This support included investments in R&D, pilot demonstration, and key mapping techniques that developed horizontal drilling in shale, microseismic imaging, and modern hydraulic fracturing techniques.
Click here to read our FAQ and responses to critics of the investigation.
Click here to download our fact sheet "Where the Shale Gas Revolution Came From" (PDF).
The history behind the shale gas boom remained relatively unknown until late 2011, when researchers at the Breakthrough Institute conducted an extensive investigation revealing the role that federal agencies like the Department of Energy and the National Laboratories played in supporting gas industry experimentation with shale fracking.
Featured in the Washington Post and the President's 2012 State of the Union, this Breakthrough investigation enunciates - again - the crucial role that the federal government has always played in technological innovation.
For more, here's a round-up of Breakthrough's coverage of the shale gas history, and the example it provides for future public investment in clean energy.
- "Where the Shale Gas Revolution Came From: Government's Role in the Development of Hydraulic Fracturing in Shale" by Alex Trembath, Jesse Jenkins, Ted Nordhaus, and Michael Shellenberger
- New Investigation Finds Decades of Government Funding Behind Shale Revolution
- "A boom in shale gas? Credit the feds." Michael Shellenberger and Ted Nordhaus in the Washington Post
- Obama's Energy Revolution: The President references the Breakthrough Institute's shale gas investigation in his 2012 State of the Union
- Interview with Dan Steward, Former Vice President of Mitchell Energy
- Interview with Gas Resources Expert Terry Engelder
- Interview with Alex Crawley, Former Program Director for the Energy Research and Development Administration
- "Beyond Cap and Trade: A New Path to Clean Energy." Michael Shellenberger and Ted Nordhaus at Yale360 on the implications of the shale revolution on clean energy development
- "Shale Revolution Challenges Left and Right." Michael Shellenberger and Ted Nordhaus in the American Enterprise Institute's The American on the lessons of the shale gas revolution
- CNN Blows Obama State of the Union Fact-Check
Frequently Asked Questions and Responses to Our Critics on the History of Shale Gas
CNN reported that hydraulic fracturing was first used in 1947 and that "the technology has led to a boom in gas exploration in states like Pennsylvania and Ohio, which sit atop extensive shale rock formations." In a recent TED session, T. Boone Pickens related his experience with fracking: "I witnessed my first frack job in 1953. I hear the President say the DOE invented it 30 years ago and I don't know what he's talking about." If fracking has been around since the 1940s, then why did the government invest in it in the 1970s and 1980s?
It's true that hydraulic fracturing was utilized before the federal government began research on shale gas in the 1970s, but for entirely different applications. Fracking was first applied to limestone deposits in 1947. But drilling in limestone is fundamentally different from drilling in shale. Key innovations were needed to effectively and commercially tap shale deposits, including the use of diamond-studded drill bits, microseismic imaging, and horizontal drilling. Until these and other crucial innovations were developed, gas industry experts remember drilling through shale to get to limestone deposits, unable to successfully permeate the porous shale rock.
Domestic natural gas production was declining in the 1970s. The gas industry collaborated with the Federal Power Commission (now the Federal Energy Regulatory Commission) to open the Gas Research Institute to develop new drilling and extraction methods, but more work was needed. The Eastern Gas Shales Project, an initiative of the federal Energy Research and Development Administration, began in 1976. The Project set up dozens of pilot demonstration projects with universities and private gas companies testing drilling and fracturing methods to commercially extract natural gas from shale. Massive hydraulic fracturing (MHF) was developed by the nascent Department of Energy in the late 1970s, a technique that would be improved upon later to spark the modern gas boom.
The combination of high porosity, low permeability, and natural fractures in large shale formations made imaging and drilling extremely difficult. Microseismic imaging, originally developed by Sandia National Laboratory for application in coalbeds, proved absolutely essential for drillers to navigate and site their boreholes. The optimal combination of water, sand, propants and other chemical lubricants took several decades to calibrate, up until 1998 when Nick Steinsberger and other engineers at Mitchell Energy developed a technique called "slickwater fracking." Federal researchers and private industry engineers had been trying for decades to access the hundreds of trillions of cubic feet of natural gas beneath their feet in shale; the fact that it took over 25 years to successfully and economically extract gas out of shale is a testament to the ingenuity and innovation of public and private engineers, and an indication of the difficulty of the projects.
William O'Keefe at FuelFix says it is "unclear" the extent to which government investment "displaced private funding." Was it simply a matter of the government introducing early iterations of shale fracking technology and then private companies perfecting them?
Yes and no. It's true that private gas companies, particularly Mitchell Energy in Texas, performed substantial in-house R&D to successfully drill in shale. But the federal government supported shale innovations well beyond the 1970s. The Section 29 tax credit for unconventional gas incentivized shale gas drilling from 1980 until 2000, right after George Mitchell successfully cracked the Barnett in Texas. The first successful multi-fracture directional drill was completed by a joint DOE-private venture in 1986. The Gas Research Institute, funded partially by a FERC-approved surcharge on gas prices and overseen by federal regulators, subsidized Mitchell Energy's first horizontal well in 1991. George Mitchell himself spent the 1980s lobbying on behalf of federal fossil energy research in an era of low energy prices and suppressed appetite in Congress for R&D.
William Tucker asked at the American Spectator if the shale gas revolution is "a case of victory having a thousand fathers." Michael Giberson wrote that "possibly the whole of the federal government's involvement in the industry...could reasonably be counted as delaying technological advancement when compared against what would have happened under some more rational regime." Who's to say that the private sector wouldn't have developed the tools it needed faster and at lower cost than federal researchers?
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Breakthrough In the News
"My colleagues often criticize government support for renewables. They believe it is only the marketplace that determines which technologies will become relevant. The history of fracking tells a very different story. The Breakthrough Institute has looked extensively into this." - Senator Al Franken, February 12, 2013