On balance, it’s more good news than bad news. Whether we like it or not, fracking seems like it’s here to stay. So it’s worth asking how this good fortune came about. Was it just dumb luck, or was there a method to the madness that produced such a startling turnaround? In particular, is this revolution the consequence of healthy market forces, good policies, disruptive technologies, or something else?
Market triumphalists like to note that capital-intensive energy markets are highly evolved and operate efficiently. When oil and gas prices were very high in the late 2000s, the markets responded by unleashing investment and expertise to bring value from what had been considered an uneconomic resource just a few years prior. This production is taking place almost entirely on private lands with private companies using private investment that was triggered by high prices.
Good government supporters point out that a steady stream of R&D investments from the Department of Energy in partnership with George Mitchell for field-scale experiments in the Barnett Shale from the 1970s to the 1990s kick-started the whole trend. The Energy Policy Act of 2005 clarified the regulatory framework for hydraulic fracturing by excluding the process from the rules that govern underground wastewater injection. That regulatory clarity and patience of government research program managers were critical ingredients that allowed fracking to take off.
Technocrats cheer the fact that disruptive technologies are changing the face of global energy production. Industry’s investment in technology evolved over decades. Field-scale shale production started in the 1920s in Kentucky, horizontal drilling was first demonstrated in the 1930s, and hydraulic fracturing was first used as a well-completion process in the 1950s. Integrating all three with advanced chemical additives was a 21st-century idea whose time had come.
In fact, it is the convergence of all three—highly functioning markets, effective government actions, and disruptive technologies—that enabled the entire revolution. For the first time since the 1960s, our energy markets, policies, and technologies are all pointing in the same direction—up.
Webber, BA, BS ’95, Life Member, is an associate professor of mechanical engineering and deputy director of UT’s Energy Institute.