George P. Mitchell is not a name that occupies too many households in Pennsylvania, or elsewhere, but it should, because he has had more to do with drilling in the Marcellus shale than any person or company. The irony, he has not tapped one well in an area geologists describe as the worlds second largest play, In fact, Mitchell has no presence in the Marcellus.
However, His methods and legendary persistence permeate the discovery of shale gas all over the world.
Mitchell first started drilling in Texas during the 1940’s; some 40 years and 20,000 wells later, natural gas was in short supply, and by the 1980’s, many thought the resource in the confines of the United States, was dead. The easy, shallow, gas reserves that Mitchell and others became accustomed to discovering were exhausted.
Mitchell, however, had too much invested to walk away, and he had a lucrative offer on the table to sell gas to the Midwest. He put up millions of dollars to drill deep below the surface. Geologists conveyed to Mitchell many times that he was wasting his fortune, the gas; sealed rock tight was not recoverable.
He told them to keep drilling, while it did not happen overnight, Mitchell eventually discovered that he could split open the shale with water and in time he discovered that sand could keep the pores of the shale open long enough to recover his prize.
Mitchell’s fracking technique rejuvenated the dying industry and is now leading to something as sizable as a gold rush. Experts believe there is enough natural gas in the Marcellus play to power up the East Coast for 50 years, and produce a cash flow of one trillion dollars.
Mitchell sold his company in 2002 for more than $3 billion dollars, but retirement for the billionaire tycoon is not in his stack of cards. RocktheCapital reached the 91-year-old Mitchell at his office in Chase Tower, near Houston, for an exclusive interview.
RTC: Lawmakers in Pennsylvania are about to start debating the merits of placing a severance tax on companies that drill in the Marcellus play, in your mind is it a fair exchange.
Mitchell: “A good size tax would hurt independent operators. To break even, companies need to earn about $4.00 a cubic foot and it has been selling for below that.”
RTC: You are a stubborn person and that has paid off handsomely for you, but at any time did you presume the geologists were right about shale gas, it would never pay off?
Mitchell: “No, engineers kept telling me you are wasting your money Mitchell.”
RTC: What is the current state of the industry?
Mitchell: “Shale gas is up to about four trillion feet and its made gas available everywhere. Our gas reserves are 30% higher than what they were two years ago. It’s a big boon for the country.”
RTC: Fracking is extremely controversial and many believe chemicals used in the process are polluting sources of water.
Mitchell: “If they do a proper job, there is no risk of contamination.”
RTC: Then why are so many drillers reticent to divulge what they use to break open the shale, claiming its proprietary?
Mitchell: “I don’t think that holds water. They are just saying that (it is) their thinking, but I don’t think that is the case. Most responsible companies will tell you what they use, and they should.”
RTC: What are your thoughts on the long-term future of shale?
Mitchell: “Shale gas will solve the gas problem for the next 40 or 50 years and will help reduce some of the dependence on foreign oil.”
RTC: Has anyone ever confused you with Senator George Mitchell?
Mitchell: “He is a nice person, but no, nobody has ever called me up thinking I was Senator Mitchell.”
Besides, being a geologist and engineer, Mitchell is also an environmentalist, yes a full-fledged environmentalist. He developed the Woodlands, a town outside Houston in the 1970’s. The more than 40 square mile town with its nearly 100,000 residents incorporates cutting-edge green technology. Mitchell was profoundly influenced by Buckminister Fuller, an inventor, author, and futurist.
Mitchell: “I had the privlege to know Buckminister Fuller in the 1960’s, and he is the one that led me to believe that Planet Earth will be overcrowded and I have been working on that for 35 years. Sustainability is very important to consider. If you can’t make things work now in the world with six billion people, what are you going to do in 2020, when you have 9 billion people?”
RTC: You are now 91, when do you plan to retire?
Mitchell: “I am still working at it.”
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