Persistence

I read an article in November edition of Texas Monthly on the history of the development of hydraulic fracturing, or fracking as it is known around these parts of South Texas. Thirty-two years ago George Mitchell, the “father of fracking,” was looking for a way to get a little more production out of a marginal gas well and ended up changing the world. The article provides a pretty powerful counterpoint to those that subscribe the “eureka moment” method of innovation.

I will skip the environmental and political issues associated with the fracking process. I am more interested in the results and the story of how the process was developed. In 2005, the US imported 65 percent of its oil. Today, that number is closer to 40 percent and falling. The geopolitical implications are staggering as we move toward complete energy independence as a result of the fracking-enabled shale boom.

Fracking did not appear out of nowhere. It was first used in 1947, but the process was inefficient and cost-prohibitive. Mitchell took the idea and began experimenting with ways to improve it. It took Mitchell Energy and Development seventeen years to fully develop the process and produce meaningful results. The organization could take a long-term view and sustain the investment because George Mitchell controlled the company. Even his board referred to the on-going fracking experiments as “Mitchell’s Hobby.”

George Mitchell had something that his counterparts running the major oil companies did not. He had persistence. There is a reason why earth shattering innovations often come from smaller players in an industry. They have the vision, the drive, and the flexibility to sustain investment over time that some innovations require. Seventeen years is a long time to experiment on a hobby. This one paid off.

Real disposable income in the US grew by $1200 last year because utility bills and the price of consumer goods decreased thanks to plentiful and inexpensive energy. We have George Mitchell’s persistence to thank for that.