The Boom (15 page)

By 1915, the value of protecting the new oil industry from careless operators was clear to California officials. A few sloppy operators could gunk up an entire oil field. To protect the oil reservoir, all wells needed to be cased adequately. The state legislature passed laws to require oil companies to set surface casing to isolate water from oil. The California State Mining Bureau created a division of oil and gas operations “for the purpose of supervising oil-field operations, with special reference to the matter of shutting off water in the oil fields and conserving the state’s oil and gas resources.” Oil companies were assessed a fee to pay for the new division. The rules required that “casing be set and cemented and, after a prescribed interval, be tested in the presence of a representative of the division to prove that all upper waters were definitely excluded.” Failure to do so resulted in a long delay in obtaining a permit to drill.

Royal Dutch Shell was the first in California to organize its subsurface geologists into a new working group. Other companies followed. Names for these new workers varied: exploitation engineer, petroleum production engineer, drilling engineer, and production engineer. Eventually the industry settled on petroleum engineer. Universities started to offer classes to train people to work in the oil fields, figuring out how deep to set the surface casing. Engineers began to study the reservoirs themselves, to determine where to drill wells to get as much oil and gas out of the ground as possible. The University of California at Berkeley and Stanford were among the first schools to offer classes. The new discipline spread to the University of Tulsa, West Virginia University, and the Missouri School of Mines and Metallurgy. The University of Pittsburgh conferred the first petroleum engineering degrees in 1915. Four students initially selected the degree; then one switched over to become a mining engineer. The three remaining recipients are notable because two of them were Chinese. One is listed as coming from what is now called Guangdong Province, and the other from Sichuan Province. The third hailed from New Castle, Pennsylvania.

Several decades later, by the time Texas investigators were looking into Mitchell’s wells near Darwin White’s house, the importance of keeping water separate from oil and gas was well established. State investigators proposed that Mitchell and every other company with a gas well in southern Wise County should add more cement. Mitchell Energy did not like the proposal at all. If there is contamination, its executives responded, the problem was probably some old wells that were leaking. The state had required surface casing down to 300 feet until a few years earlier. If the state wanted aquifers protected down to 450 feet, that wasn’t Mitchell’s problem. It had followed the rules.

Government investigators held their ground. The wells needed cement down to 450 feet. They proposed firing holes in the pipes and squeezing in new cement that would be forced upward, creating a new barrier keeping the gas and water apart. Mitchell Energy executives argued against this suggestion strenuously. The proposal, covering only a small section of the entire Boonsville Bend field, would require remedial cementing of seventy wells. Even if fixing every well went smoothly, it would cost $665,000, they argued. Moreover, at the end of the well’s useful life, Mitchell couldn’t fish out the steel pipe and resell it. Another $560,000 loss. “If the Commission proposal was later expanded to include the entire Boonsville field, Mitchell would be obligated to a loss of several million dollars!” Mitchell officials argued in a written response. “This is too severe when considering that the operators in this field would be penalized for following the very rules set up by the Commission.” Mitchell proposed checking on its wells weekly. If gas was leaking behind the pipes, it would see a buildup of pressure at the surface. The state relented. Mitchell wasn’t required to pay a fine or fix its wells.

Darwin White still lives in the same house. He was unaware there had ever been an investigation by the state. “I thought it went to naught. We didn’t ever pursue it. You can’t tell what is going on underground, and we couldn’t get anyone to investigate it,” he said. He still gets his water from a local public water system. His 1977 letter to the state was the first of many complaints. Other accounts of gassy water wells followed. Eventually a water treatment plant was built on the western edge of the county to provide municipal water from a nearby lake. The system would later be expanded to serve an even larger area. In 1997 a seventy-mile pipeline was built to move lake water to more of Wise County. Mitchell Energy, to settle a lawsuit, paid for most of it.

Mitchell acquired so much acreage in Wise County that for two decades his company kept drilling and growing. But by the 1980s, Mitchell began to wonder how much more gas was left in the Boonsville Bend field—and whether it was enough to fulfill his contractual obligation to deliver one hundred million cubic feet daily of gas into the Chicago-bound pipeline. The giant geological trap he had found was being depleted by thousands of wells. He needed to find more gas to feed into the pipeline. For years this contract had been a godsend. It offered good prices for the gas, keeping Mitchell Energy profitable and comfortable. But the contract was starting to look like a millstone around the company’s neck. Contractually obliged to supply gas for several more years, Mitchell wasn’t clear where that gas would come from. If his company couldn’t find enough gas, it would have to buy the gas itself.

Mitchell Energy began looking at buying some wells and acreage held by other companies in the general vicinity. One possibility was a well drilled by tiny Argonaut Energy. It was 7,700 feet deep, about a thousand feet below the rocks where the natural gas in the area was typically found. As Argonaut had drilled deeper, its drill bits had also traveled backward in time. The geologic trap that Mitchell had discovered in the 1950s was deposited millions of years ago. As Argonaut went farther into the earth, it had penetrated rocks deposited even earlier. Argonaut had found the source rock. Over millions of years, leaking gas had migrated upward until it encountered the geologic trap that had made Mitchell so excited and so rich. Argonaut ran a gas detector. As the drill bit churned through a layer of shale rock, the device’s readout jumped, but no gas flowed out. Argonaut plugged the well as a dry hole. Mitchell’s people, reviewing the data, recognized that a similar 250-foot wedge of shale existed a few dozen miles away in a well it had drilled. It too had registered gas.

In 1978 the federal government set price controls on natural gas. Gas was in short supply, and the government wanted to encourage more exploration. Gas from existing wells received the lowest price. But gas from new wells got a higher price, and gas from wells in “unconventional” reservoirs that required fracking got a much higher price. In 1982 Mitchell Energy applied to the state for designation of a new field that would qualify for the highest prices. The new field was named after a town in Wise County. It was called the Newark East (Barnett Shale) gas field.

In June 1982, at Mitchell’s personal insistence, the company fracked the Barnett Shale for the first time. A few years earlier, a government-funded project had tried a massive water frack in Wise County, right in Mitchell’s backyard. The experiment mixed water and crude oil into a gelled emulsion called a “Super K-Frac.” The pressure had ruptured the piping, leaving a hole about a mile deep. It took a month to locate and cement the hole. “It appears that this technique is probably not economically feasible,” noted a government report on the effort. Mitchell opted to use 1.5 million cubic feet of nitrogen to frack his well. Then in 1983 he tried again with foamed carbon dioxide and water. The result was that the shale flowed at 240,000 cubic feet a day. Considering all the time and expense, it was a terrible well and wasn’t profitable. (A good modern Barnett well can begin flowing at 5 million cubic feet a day.)

But that didn’t stop Mitchell. The company had managed to frack the Barnett Shale, and gas had dribbled out. Mitchell directed a study of how much gas was in the Barnett Shale. The answer was billions or possibly trillions of cubic feet. “It was a substantial amount of gas if we could break it away from the rock,” he recalled. With government price support and the driving need to produce more gas, Mitchell unleashed his engineers on the Barnett Shale. For the next few years, Mitchell deepened about ten wells a year into the Barnett Shale, testing different types and sizes of fracks. He was persistent because, in his view, the company’s survival was on the line. If an employee balked and said he wasn’t sure if it was possible to frack the Barnett Shale, he was told that this type of thinking would lead to a new job at a different company. Many people thought the project was a money sink, but Mitchell owned more than 50 percent of the stock in the company. His staff could disagree, but it was pointless.

Slide rules were still commonplace, but by 1982, every company engineer received an IBM desktop computer. Mitchell didn’t want wells drilled on hunches. Data were collected and interpreted. Mitchell Energy started crunching numbers for insight and advantage a decade before this became normal practice in many industries. Wearing shirtsleeves and a tie—Mitchell’s seldom-worn sports coats, one former executive said, made him look like a used-car salesman—he would check in with his engineering and geological staff on Mondays. He wanted to know about what wells had been drilled over the past week. What did the logs run to get a better sense of the rocks look like? If he heard something that interested him, he would go right to the source. It was not at all unusual for midlevel engineers to pick up the phone and hear the boss’s voice bombarding them with questions about a new well. One weekend, a well was drilled, determined to be unsuccessful, and plugged. When Mitchell heard about it on Monday, he ordered that the plug be drilled out before the rig moved on. The well could come in handy, he said.

“He has a mind that people often refer to as persistent,” said his son, Todd. “To me it is different than persistence. It was a form of obsession. He has a theme, and he would stick with it and stick with it.” And during the 1980s and into the 1990s, he was convinced that the Barnett Shale held an enormous volume of gas. The only question was whether the company could develop an economical way to get it out.

In 1964 Randy Miller’s family moved to Glenpool, Oklahoma, a city that shares a name with one of the largest oil discoveries ever made in the United States. He was thirteen years old and lived on a hog farm in the middle of the giant Glenn Pool oil field. Farmers drove their tractors around leftover oil well detritus.

A year after the move, he worked in the oil field for the first time. His job was to haul beat-up drill bits to a forge where they were reheated and reshaped. Old cable-tool rigs were in use, and the repeated dropping of the bits onto the rock would deform them. These cable-tool bits are now obsolete, replaced by bits that turn and chew up the rock. As Miller got older, he graduated to working with sledgehammers, pounding the bits after they were heated. By the time he got to college, he had started driving trucks. It was a job he would keep for eight years as he worked his way through college and then law school.

Miller’s background helped him connect with jurors. He came across as a regular guy, with a theatrical flair. He once opened a Mason jar filled with hydrogen sulfide to give the courtroom a whiff of the noxious rotten-egg smell to which his clients had been exposed. A juror vomited, and the court had to recess, with the courtroom windows opened to clear out the air.

In 1994 Miller joined a lawsuit against Mitchell Energy. Not long before, Carrie Baran, a Wise County resident, had called up Gardere & Wynne, a sizable Texas-based law firm that typically represented companies charged with oil-field pollution. Her call made its way to a firm attorney named Bill Keffer. A former in-house lawyer for oil giant Atlantic Richfield, commonly known as Arco, who would later serve as a Republican member of the state legislature, Keffer was intrigued by what he heard from Baran. Gas in her water. Rotten-egg smells. Keffer roped in Miller, and together they started looking into the matter and gathering more plaintiffs.