“I don't want to take anything away from Mitchell,” wrote Clyde Prestowitz, president of the Economic Strategy Institute, in Foreign Policy after famed Texas gas innovator George Mitchell passed away in late July. “He was a great investor, philanthropist, and entrepreneur who doggedly pursued the idea that shale could be made to yield its vast oil and gas content. But contrary to the classic picture of the lone wolf inventor who persists alone in the face of indifference, ridicule, disappointment, and even contempt, Mitchell had a partner -- the American taxpayer and the federal government.”
Just two years ago, a eulogy pointing to the role of the government would have seemed contrary to the archetype of the entrepreneur. The illusion that innovation originates from the private sector alone — variously termed the lone innovator or the Silicon Valley Garage myth — remained dominant in 2011, particularly in the oil and gas industry. In his book The Quest oil and gas industry analyst Daniel Yergin painted a picture where the gas revolution emerged entirely from George Mitchell’s backyard. “It is because of George that we can talk seriously about energy independence,” wrote Yergin in his reflection on Mitchell’s impact at Dot Earth.
In reality, as the Breakthrough Institute unearthed in a series of investigations and interviews, the federal government not only initiated the essential demonstration and research on shale fracking, but also worked closely with George Mitchell to make fracking profitable for the first time. Our findings found a home with further independent investigations from the New York Times, the Associated Press, and the American Energy Innovation Council. As Breakthrough President Michael Shellenberger and Chairman Ted Nordhaus noted in their address to the Colorado Oil and Gas Association last year:
In these intensely polarized times, when it seems that almost everyone imagines that either government or corporations are the enemy, and it seems impossible to imagine that the two might actually work together to further the public interest, there are important lessons here too.
Prestowitz isn’t the only commentator who acknowledged the fruitful partnership between Mitchell and the state. Among the many eulogizers who have written about Mitchell, widespread credit is given to government research and technology investments — a testament to him as a collaborative pioneer and a sign of the changing discourse around technological innovation in the United States. The presence of the government does not detracts from his legacy as a visionary who spent 20 years doggedly pursuing commercial shale fracking operations in an industry not known for chasing dreams and taking risks.
The Economist captured the lessons of the shale revolution in an obituary for Mitchell:
Yet Mr. Mitchell’s story is more complicated than just a fable of hard work rewarded and a vision vindicated. It also shows how governments can help along the entrepreneurial spirit. His company counted on support from various government agencies, including those that mapped the shale reserves (demonstrating that they were plentiful) and promoted the development of technologies such as diamond-studded drill bits. Jimmy Carter’s 1980 law to tax “windfall profits” at oil firms also included a tax credit for drilling for unconventional natural gas.
In Quartz, Steve LeVine noted that “in an industry that scorns government, Mitchell relied on federal funding to crack open shale, a type of rock that the smart money said was impenetrable.”
Harvard Economist Edward Glaeser memorialized Mitchell in the Boston Globe, writing that “Mitchell’s successes still hint at some role for government,” and citing federal support for Mitchell’s experiments in Texan shale formations.
In their official obituary, the New York Times correctly pointed to the different types of federal involvement with George Mitchell’s fracking endeavors. “Both the Gas Technology Institute, a nonprofit research organization, and the federal Energy Department worked with Mr. Mitchell, giving him technical help and some financing. He also received federal tax credits." The Times also published a Breakthrough Institute obituary for Mitchell, which detailed the role of the federal government and insisted that George Mitchell’s “vision and persistence are not to be understated.”
At FuelFix, Jim Marston of the Environmental Defense Fund pushed back against “how some anti-government leaders in Washington think industry works” by celebrating the collaboration between Mitchell Energy and public sector innovators:
The nation’s innovators know that persistence is the only way to overcome the challenges facing the nation. I think George Mitchell would agree that government should be an ally to America’s fledgling energy innovators. It took decades of investment and perseverance to transform shale drilling from “alternative energy” to a game changer in the international energy landscape. If we don’t invest in clean energy now, we risk falling behind for good.
The history of public-private partnership so evident in the shale gas revolution has not actually escaped many of those whose anti-government tendencies could not deny the role of the state. At RedState, Steve Maley wrote that, “While the federal government played a role, the shale boom would not have happened without insightful entrepreneurs, led by George Mitchell.” Federal investments “helped,” wrote Robert Samuelson in the Washington Post, but “the same information and technologies were available to other oil companies, including better-financed ‘majors’ (ExxonMobil, Chevron and the like).”
While Daniel Yergin may continue to ignore the history (his own obituary to Mitchell made no mention of federal investments), it’s clear that the full story behind that shale revolution has punctured the ideological aversion to government technology investments. George Mitchell, a champion of government investments and smart environmental regulation, is best remembered for all his successes and virtues: a servant of the public good, a collaborator, and persistent and visionary entrepreneur.
Photo Credit: The George P. Mitchell Foundation