The controversy over hydraulic fracturing has just about run its course in the US as the wider economy wakes up to the fact that the technology is set to revolutionise the global energy industry, writes NIAMH SWEENEYin Houston, Texas

GEORGE MITCHELL IS almost 93 years old, but he’s still drilling for oil and gas.

A native of Galveston, Texas – next to the port city of Houston – Mitchell lives in a suite in one of his hotels on the Galveston sea front. He’s just had knee surgery (too much tennis, he concedes) and so gets about on a small, motorised vehicle. He has lived here since his wife, Cynthia, died after a long battle with Alzheimers last year. “A terrible disease,” he says, shaking his head.

The son of a Greek immigrant who shined shoes for a living, Mitchell is a billionaire several times over. But when he talks about how he made his fortune, the money itself appears to be of little interest to him. He could have made far more than he did, he admits, but he had already made enough. By the time he sold his company, Mitchell Energy and Development Corporation, for $3.5 billion in 2002, there were other achievements that mattered more to him.

Described by those who know him as “a visionary”, Mitchell is, in large part, responsible for the natural gas boom that has transformed the US energy industry over the past decade, after he spent several years honing the technique known as hydraulic fracturing (or simply “fracking”) to extract natural gas from shale rock.

A geologist by training, he and his brother set up a small company in Houston shortly after the second World War.

“Houston had to be the place to go,” he insists, “because they couldn’t get material to drill wells during the war.” Up until that point, all steel production had been directed toward the war effort, and Mitchell saw an opportunity open up as the war came to an end. They started small. He did the geology late at night (the logs he needed to determine where the oil and gas deposits were located were too expensive, so he borrowed them overnight for a small fee), they leased some land and set about drilling their first wells.

Forty years later, in the early 1980s, Mitchell’s company had become one of the biggest in Texas. But he had a problem. He figured he had about 10 years of gas supply left in his existing land leases and needed to find a new source. He knew there was gas locked in the Barnett Shale, an area around which he had been operating for several decades, but nobody knew how to release it. So he told his staff that they had to find a way.

“The industry didn’t give a damn about the Barnett,” says Dan Steward, another geologist who Mitchell drafted in to work with him on what, at that time, was seen as a lost cause. “George always pushed technology.”

And he pushed his people too. “He’s about as nice a man as you could meet, but if he disagrees with you he can cuss you out like he was a sailor,” Dan laughs.

It took seven years of experimenting and several million dollars, but Mitchell and his team figured out how to make it work. Unlike traditional deposits of gas and oil, shale gas is locked within the cells of the rock. In other words, it is highly dispersed throughout the rock, rather than bunched in a concentrated bubble. To release it, they had to break open the shale, thus allowing it to make its way to the atmosphere.

Hydraulic fracturing in and of itself was not new. It had first appeared in conventional drilling in the 1940s, where mud was pumped into oil wells at high pressure to release the deposits below. But what Mitchell’s team eventually figured out was that, by pumping a mix of water, sand and some chemicals into the shale-rock formations at high pressure, they could fracture the shale. The sand kept the fracture open enough to allow the gas to flow.

It took several modifications, but with every improvement they made, Mitchell and his team edged closer to the goal of making it economically viable to produce shale gas. By switching to fresh water from a gel substance they had initially started out using, they managed to slash the cost of each fracturing procedure from $365,000 to $80,000. They were also figuring out how to release more and more gas with each attempt.

By the time Mitchell sold his company to Devon Energy in 2002, the rest of industry was finally starting to take notice.

What Devon added to the mix was a technique known as horizontal drilling. Instead of just drilling a hole straight down into the ground for several thousand metres, once the drill got to a certain point, they turned it sideways, and continued to drill horizontally. Now, they could fracture the rock at several points along this new well bore, both along its horizontal stretch and its vertical stretch. And that’s when the shale gas boom really began to take off.

Between 2000 and 2010, shale gas production in the US increased from 0.39 trillion cubic feet to 4.8 trillion cubic feet. By then, America had overtaken Russia as the number-one gas producer in the world.

Now, the US Energy Information Administration (EIA) estimates there are 860 trillion cubic feet of “technically recoverable” shale gas in the US, against just 273 trillion cubic feet in today’s “proved reserves”. That’s the equivalent of 40 years of gas consumption from shale gas alone.

Even more promising, the same technique used to extract gas from shale can also be applied to unlock previously unreachable oil deposits.

These developments have prompted talk of achieving the long sought-after goal of US energy independence (earlier this year, British Petroleum recently published a report saying it believes North America will become almost totally self-sufficient in energy in two decades).

If that seems overly ambitious, at the very least, the shale gas discovery will slash US dependence on foreign energy sources.

In a recent report, the International Energy Agency (IEA) wrote about a scenario it’s calling “the golden age of gas”, which veteran energy economist Philip Verleger believes will be the foundation for a resurgence in the US economy.

And in a US economy still struggling to recover from the Great Recession, oil and gas production is one of the few bright spots. In 2010, the industry supported more than 600,000 jobs in the US, according to a report that consultants IHS Global Insight prepared for America’s Natural Gas Alliance. Stories abound of thousands of workers flocking to remote parts of North Dakota where the Bakken Shale is booming with oil production. It’s happened so quickly, they’re sleeping in camper vans – some in their cars – because there’s no accommodation available.

In the Eagle Ford in Texas – a part so remote, even most Texans have never heard of it – hundreds of workers are now working to extract oil, and it’s rumoured that the only La Quinta hotel in the area is booked out for the next five years.

Gas has now become so plentiful (just four years after the US government warned that supplies were worryingly low) prices fell 36 per cent in 2011, hitting a 10-year low of $2.20 (per million British thermal units) last week.

“People talk about this being a game changer and a paradigm shift. At a minimum it’s those. At a maximum, it saved this country and Europe,” says Dan Steward. “Europe was this close to being controlled by Russian gas.”

BUT DESPITE THIS radical change in the energy and economic outlook for the US and elsewhere, media coverage of fracking has been decidedly negative, as accusations of everything from water contamination to causing earthquakes have been levelled at the industry.

In New York and Pennsylvania, where companies began tapping the Marcellus Shale with gusto just a few years ago, residents have proved most resistant to the new wave of hydraulic fracturing, and regulators have been slow to keep up with the pace of development. In places such as Texas, where the oil and gas industry has a long history and people are generally more comfortable with it, the transition has been somewhat easier.

Crucially, your view of the dangers represented by hydraulic fracturing may depend on what you take hydraulic fracturing to mean. Some have taken it to mean the entire process of shale gas development, which includes well over a hundred procedures, including preparation of the site, drilling of the well, the fracturing process itself and the treatment and handling of the flow-back water. The industry itself takes issue with this interpretation, as it does with the name fracking (insiders would never spell it with a k) an epithet they say was created to make fracking the new “f-word”.

“That’s shale-gas development, not fracking,” says Dr Charles Groat of the Energy Institute at the University of Texas in Austin, who co-authored a recent report that examined the effects of hydraulic fracturing on water quality.

The study, which looked into reports of water contamination in the Barnett and Haynesville shale areas in Texas and the Marcellus shale in Pennsylvania, found that, while there was scientific and regulatory evidence pointing to some problems with groundwater, they were the sorts of problems normally associated with conventional gas and oil production.

“In the areas that we studied, there was no evidence in scientific literature or the regulatory records that hydraulic fracturing had any effect on groundwater,” said Groat.

“In the whole spectrum of what you do to get shale gas out of the ground, there were some violations; they just didn’t happen to be hydraulic fracturing. They were more likely to be with well casing (flow-back water), pits leaking, emissions . . . Leaks in part of the well bore could mean gas getting into water wells nearby. But the same thing happens in conventional gas production.”

Groat says those who are worried about shale-gas development should focus on what happens at or near the surface level and “not spend a lot of time, energy and passion worrying about things that happen deep in the subsurface because that’s not where the focus needs to be.

“The tendency is to paint the most dramatic picture, ie, that injecting fluids at high pressure and fracturing the rock is creating pathways for fluids to get into groundwater. That’s been used to portray hydraulic fracturing as a catastrophic process, but we found no basis for that in areas we’ve studied.”

Key to staying on top of whats happening to water quality as companies tap shale formations for their hydrocarbons, he says, is gathering baseline information before the gas production starts, and continuing to take samples as the development goes along.

“It’s known for certain that there is natural gas in some water up in Pennsylvania. For years, people who’ve drilled wells up there have had to vent the natural gas before they could use it so they didn’t have explosive gases in their homes,” says Groat.

But some claim those gases have shown up in the groundwater since shale-gas development started in the Marcellus, and the absence of baseline information has made it next to impossible to establish which came first.

Unfortunately, Groat says, there’s no poster child for best practice.

“We haven’t found any community where inspection practices, pre-development conditions, monitoring of development and post-development assessment has been done according to best practices” – something Groat blames in part on the fact that shale development took off so quickly, which left federal regulators and state agencies playing catch-up.

BACK IN THE Barnett region, which encompasses the cities of Dallas and Fort Worth, one company that specialises in hydraulic fracturing has come into its own in the past few years. Started by two brothers who wanted to test out George Mitchell’s fracturing techniques on their own wells (but couldn’t get any of the existing service companies to do it for them because their operation was too small), Frac Tech was born in the early 2000s. By 2004, the company employed 12 people. Today, Frac Tech has close to 4,500 employees, and operates all over the US.

Located on the outskirts of Fort Worth, Frac Tech’s maintenance plant is something of an Aladdin’s cave for those who would like to get a close-up look at the mechanics of the hydraulic fracturing – or pressure pumping, as they prefer to call it – process.

This is where they rebuild and maintain the huge pumps that can each move roughly 420 gallons of water a minute for the four to five hours it takes to complete a frack, using up to eight million gallons of water at a time. It’s also where they keep huge vats of the chemicals that get mixed with water and sand to create the “frack fluid”. The industry downplays the significance of the chemical content (one of them, they’re keen to mention, is a key ingredient of ice-cream) which, in most cases, constitutes less than one per cent of the mix, but does also include some known carcinogens such as benzene.

Towards the back of the site is a brand-new mobile data-control centre, from which engineers can monitor the progress of a frack job on site. From the outside, it looks like a huge Portaloo. Inside, it’s more like the Starship Enterprise. Several screens of varying sizes display pressure gauges as the procedure is taking place. There’s also a portable lab to test the make-up of frack water.

“People think this is a bunch of cowboys poking holes in the ground and hoping for the best. That’s not the case. It’s a highly developed science,” says Ed Ireland, an economist who heads up the industry-backed Barnett Shale Energy Education Council in Fort Worth. Pre-2006, the pressure pumping process was computer monitored. Now it’s computer-controlled, he says, with automatic shut-offs that kick in if any part of it doesn’t go as planned.

“And aside from the environmental concerns, there’s a huge economic incentive for companies to do it right. Fracking into a water table is bad because it kills the oil or gas well,” Ireland insists.

But back in Galveston, George Mitchell says he’s upset about the mistakes that have been made (which, for the most part, he blames on smaller, independent companies).

“You have to be careful how you complete the wells and how you drill them,” he says, earnestly. “Some independents, they’re just too damn wild. You can’t imagine what they’re like – they’re like a herd of cats. I’m upset because we’ve gotta control ’em. It’s a tremendous asset to the nation – to the world, really.”

Meanwhile, Mitchell is still investing, and confirms a recent Wall Street Journal report that he has teamed up with a venture capital company to go prospecting a few hundred miles from where he lives “in the valley” (“beside where the Chinese are making their play”, he says).

He may be almost 93, but he’s not done yet.

“I’m not gonna quit until I quit thinking,” he says.

People talk about this being a game changer and a paradigm shift. At a minimum it’s those. At a maximum, it saved this country [the United States] and Europe . . . Europe was ‘this’ close to being controlled by Russian gas