Mitchell Energy's first horizontal well was subsidized by the federal government, according to former geologist and Vice President for Mitchell. "They did a hell of a lot of work," said Steward, "and I can't give them enough credit for that. DOE started it, and other people took the ball and ran with it. You cannot diminish DOE's involvement."
The federal government's work on shale gas began in the 1970s. As Steward recalls, "The DOE's  Eastern Gas Shales Project [in the Appalachia basin] determined there was a hell of a lot of gas in shales. It was the biggest accumulation of data and knowledge to date." From there, Mitchell and his team experimented to find the best and most economical way to fracture the Barnett Shale. Variations of fracking techniques through the 1980s led George Mitchell to bring the Department of Energy and the Gas Research Institute in in 1991. "By the early 1990s," said Steward, "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."
Mitchell Energy's blockbuster contribution to the modern natural gas boom is not discredited by a partnership with federal agencies. Steward is the first to point out the pivotal long-term role the government must play in technological innovation: "Government has to be looking down the road. We really cannot wait to develop those other energies. Industry doesn't look as far down the road as the government should."
For more, see the Breakthrough Institute's "History of the Shale Gas Revolution" and "A boom in shale gas? Credit the feds" by Ted Nordhaus and Michael Shellenberger in the Washington Post.
The Breakthrough Institute: How would you describe the government's role in the shale gas revolution?
Dan Steward: In the seventies we started looking at running out of gas, and that's when the DOE started looking for more.
The DOE's  Eastern Gas Shales Project [in the Appalachia basin] determined there was a hell of a lot of gas in shales. It was the biggest accumulation of data and knowledge to date. It set the stage for people to have the basic background and caused people to start asking questions, and that's always important.
They did a hell of a lot of work, and I can't give them enough credit for that. DOE started it, and other people took the ball and ran with it. You cannot diminish DOE's involvement.
BTI: Did Reagan cut the R&D money for unconventional gas research?
I know I'm conservative as hell, but the truth is that Reagan did a world of good for the gas business. When Carter was in, he put a moratorium on gas fired electrical plants. He was worried we were running out of gas. But with the moratorium on new plants the demand for developing more gas started going away. That is no fault of anybody, and I'm not throwing stones, I'm just telling you what happened. When Reagan came back, Reagan said we need those plants. This is where Mitchell came in. Mitchell felt like there was a lot of gas, and it wasn't until he could get the Barnett [shale gas] work that he felt he could prove he get it.
BTI: What was Mitchell doing?
DS: Mitchell got involved in the Cotton Valley limestone looking for gas, but it was tight rock, and George said, "I want to frack it." But he had a hard time to get his people to go along.
Mitchell was interested in Barnett and his geophysicist said, "It looks similar to the Devonian, and the government's already done all this work on the Devonian."
BTI: What help did you get from the government?
DS: In the 1990s they helped us to evaluate how much gas was there, and evaluate the critical properties as compared to Devoninan shale of Appalachia basin. They helped us with our first horizontal well. They helped us with pressure build-ups. And we worked with them on crack mapping. In 1999 we started working with GTI (formerly GRI) on re-fracks of shale wells.