Part One: What Is Fracking? - A. A conventional Oil Well

Name: ____________________

Part One: What Is Fracking?
A. A conventional Oil Well:

A hole is drilled into the earth until it hits a pool of oil underground. That oil
is forced pumped to the surface. However, once the initial pressure from
underground declines, less and less oil is able to be pumped up.
Eventually, the well is abandoned, even though most of the oil is still
in the ground.

B. A Fracked Well

In a fracked well, the bit bends to reach horizontally, and then fracking fluid
is injected into the well. This builds pressure, thereby increasing both the

amount of oil that can be pumped out of a regular well, and making it
economical to drill in places where oil and gas could not be pumped before.

In turn, this is leading to a huge boom in U.S. oil production, which is right
now changing both our country and the world.

Who led this boom? Who was the innovator that changed oil and gas
production?

PART TWO: George Mitchell
George P. Mitchell, Texas Oilman And
'Father Of Fracking,' Dies At 94
   | By MICHAEL GRACZYK and JONATHAN FAHEY
Posted: 07/27/2013 12:37 am EDT Updated: 07/27/2013 12:38 am EDT

Former Mitchell Energy & Development Corporation chairman George P. Mitchell Wednesday,
March 9, 2011, in Houston. (AP Photo/Pat Sullivan)

HOUSTON -- George P. Mitchell leveraged a penchant for hard work, an appetite for risk and
dogged persistence in the face of futility into a technological breakthrough that reshaped the
global energy industry and made the wildcat oilman a billionaire.

Mitchell, the developer and philanthropist who also is considered the father of fracking,
doggedly pursued natural gas he and others knew were trapped in wide, thin layers of rock deep
underground. Fracking brought an entirely new – and enormous – trove of oil and gas within
reach.

Mitchell died Friday at age 94 his home in Galveston, his family said.

The son of a Greek immigrant who ran a cleaning and shoeshine business in Galveston, Mitchell
became one of the wealthiest men in the U.S. While his technological breakthrough transformed
economies in states like North Dakota, Texas and Pennsylvania and is expected to migrate
around the world, many environmentalists have attacked the practice over concerns about air and
water pollution.

For the entire oil and gas age, drillers had searched for hydrocarbons that had seeped out of
layers of sedimentary rock over millions of years and collected into large pools. Once found,
they were easy to produce. Engineers merely had to drill into the pools and the natural pressure
of the earth would send huge volumes of oil and gas up to the surface.

These pools are exceedingly rare, though, and they were quickly being tapped out as the world's
consumption grew, raising fears that the end of the oil and gas age would soon be at hand and
raising prices to alarming levels.

Mitchell's idea: Go directly to the sedimentary rock holding the oil and gas, essentially speeding
up geological processes by thousands of millennia.

He figured out how to drill into and then along layers of gas-laden rock, then force a slurry of
water, sand and chemicals under high pressure into the rock to crack it open and release the

hydrocarbons. This process, horizontal drilling and hydraulic fracturing, is the now-common
industry practice known generally as fracking.

Engineers after Mitchell learned to adapt the process to oil-bearing rock. The U.S. is now the
world's largest producer of natural gas and is on track to overtake Saudi Arabia as the world's
biggest oil producer by the end of the decade, according to the International Energy Agency.

Daniel Yergin, the energy historian and author of "The Quest: Energy, Security and the
Remaking of the Modern World" said in a statement that Mitchell "Changed the world energy
outlook in the 21st century and set in motion the global rebalancing of oil and gas that is now
occurring."

The fracking boom sent natural gas prices plummeting, reducing energy costs for U.S.
consumers and businesses. And by boosting U.S. oil production, it has sharply reduced oil
imports.

Electric utilities used more natural gas to generate power because of its low price, while reducing
the use of coal. This has led to a substantial reduction in emissions of carbon dioxide and toxic
chemicals such as mercury by U.S. utilities.

But the practice has also sparked powerful antagonism, especially in the Northeast, from
residents and environmentalists opposed to increased industrial activity in rural areas and
concerned that the fracking process or the wastewater it generates can contaminate drinking
water supplies.

New York, which is thought to have considerable natural gas resources, has imposed a
moratorium on high-volume hydraulic fracturing and star-studded activist groups have staged
countless rallies and events to generate opposition to the practice.

In some areas fracking has been blamed for air pollution and gas leaks that have ruined well
water, but the Obama administration and many state regulators say the practice is safe when done
properly.

Mitchell's family, on the family foundation website, said he died of natural causes while
surrounded by relatives.

"His story was quintessentially American," the family statement said. "George P. Mitchell was
raised as a child of meager means who, throughout his life, believed in giving back to the
community that made his success possible and lending a hand to the less fortunate struggling to
reach their potential."

George Phydias Mitchell and his wife, Cynthia, who died in 2009, had 10 children. Their work
together was "dedicated to making the world a more hospitable and sustainable place," the family
said.

Mitchell graduated first in his class of 1940 at Texas A&M University with degrees in
petrochemical engineering and geology. He helped pay for his school costs by running a tailoring
and laundry business in College Station and selling candy and stationery to his fellow student
Aggies, then in later years became the school's largest benefactor with donations topping $95
million.

This year, the annual Forbes list of wealthiest Americans ranked him 239th with a net worth of
$2 billion.

Mitchell spent four years in the Army Corps of Engineers during World War II. Afterward, he
struck out on his own with a brother and a partner as a wildcatter operation.

Over his career, he participated in drilling some 10,000 wells, including more than 1,000
wildcats – wells drilled away from known fields. His company, Mitchell Energy &
Development, was credited with more than 200 oil and 350 natural gas discoveries.

The firm spent nearly two decades developing horizontal drilling and hydraulic fracturing,
finally finding success in North Texas' Barnett Shale formation in the 1990s.

"There's no point in mincing words. Some people thought it was stupid," Dan Steward, a
geologist who began working with the Texas natural gas firm Mitchell Energy in 1981 told The
Associated Press in an interview last year. Steward estimated in the early years, "probably 90
percent of the people" in the firm didn't believe shale gas would be profitable, and that Mitchell's
company didn't even cover the cost of fracking on shale tests until the 36th well was drilled.

But he credited the company namesake as a tenacious visionary.

"There's not a lot of companies that would stay with something this long," he said. "Most
companies would have given up."

"Because of Mitchell's persistence ... we are today witnessing an unprecedented boom in
domestic energy production and the associated economic benefits in Texas and nationwide,"
Texas Railroad Commission Chairman Barry Smitherman agreed Friday.

Mitchell sold his energy company in 2002 for $3.1 billion.

Over the years, he spent tens of millions rebuilding his hometown of Galveston, resurrecting a
long-dormant annual Mardi Gras celebration and providing money to restore the city's historic
downtown Strand District.

He donated the land for Texas A&M University at Galveston.

"To say he was a great man with foresight and generosity isn't enough," Adm. Robert Smith III,
the school's president, said. "His contributions to this university literally made this institution
possible."

His Cynthia and George Mitchell Foundation, founded in 1979, has made more than $400
million in gifts.

In the early 1970s, Mitchell began developing The Woodlands, a suburban Houston master-
planned community designed as a place for mixed-income residential development with jobs and
amenities nearby while preserving the East Texas forest and other natural resources that covered
the 27,000 acres. He later would call it his most satisfying achievement.

The Woodlands is now home to about 100,000 people, and one of the nation's busiest outdoor
performing arts and entertainment venues there carries his wife's name, the Cynthia Woods
Mitchell Pavilion.

"His ambition and success have transformed our region," Houston Mayor Annise Parker said.
"He was a visionary, and showed his love for Houston through his work and hometown pride."

Funeral arrangements were not immediately released.

PART THREE: The Results

The Economy

Indicators are positive for U.S. energy outlook

MARK ZANDI
POSTED: Sunday, November 2, 2014, 1:09 AM

Seemingly overnight, gasoline prices have plunged. Regular unleaded is approaching $3 a gallon at my
local Wawa. That's the lowest price since just after the recession ended.

Because nothing makes American consumers happier than lower gasoline prices, they should be
cheering now. The American energy story is entirely good news.

Pulling gasoline lower is a surprisingly sharp decline in global oil prices. Just a couple of months
ago, a barrel of oil traded for well over $100 on global markets. Today, the price is closer to $80.

Slower economic growth in Europe, China, and elsewhere has crimped global demand for oil.
More important, however, is that global supply is surging. American production is booming,
making the United States once again the world's largest oil producer.

Production is also up in some war-torn countries such as Libya and Iraq. Saudi Arabia, which has
historically curtailed output when global prices slumped, is pumping lots of oil, fueling much speculation
about the Saudi leaders' motives.

Rumors suggest that they might be trying to hurt the Muslim-extremist group ISIS, which is
selling oil to finance its rampage across the Middle East. The Saudis might also be trying to
pressure Russia to curb its aggression in Ukraine. A more far-fetched theory is that Saudi Arabia
wants to short-circuit the U.S. fracking boom by making it unprofitable.

More likely the Saudis want to reestablish discipline in OPEC. The cartel has effectively
fractured; most of its member states, especially those run by despots, are cheating on their
production quotas. Bringing OPEC into line won't be easy, however, and at best will take time.
Oil prices are thus likely to remain low for the foreseeable future.

This is a boon to U.S. consumers. Every time the price of a gallon drops by a penny, consumers
save $1.25 billion over the following year. Assuming that prices stabilize near $3 a gallon,
consumers will save $62.5 billion in 2015 - as much as Americans spent on movies, sporting
events, and other live entertainment this year.

Consumers are already feeling much better. Confidence gauges have surged in recent weeks to
levels last seen before the Great Recession. With unemployment falling quickly, debt burdens

about as light as they have been in decades, and the stock market close to record highs,
everything is lining up for a robust Christmas buying season.

The good energy news isn't just about lower prices, moreover. America is again a global energy
powerhouse. Shale-oil and natural-gas production are booming, helping make the nation energy
independent.

Oil imports are at 20-year lows and falling quickly. Most of what we import comes from Canada.
So much natural gas is being produced that we are trying to export it. Doing so will be difficult,
however. The infrastructure needed to ship natural gas overseas is expensive, and laws written
when there were lines at gas stations still restrict energy exports.

U.S. natural-gas prices are as low as anywhere in the world. Because natural gas fuels a growing
share of the nation's electric power plants, the cost of electricity is also low. Americans pay
about half as much for natural gas and electricity as do the Chinese, and about one-fourth as
much as consumers in Japan.

The prospect of cheaper energy is attracting global manufacturing back to the United States. This
is especially true for the petrochemical and plastics industries that use energy intensively, but
energy is important for almost all manufacturing activities.

Low natural-gas prices will provide an even bigger kick to the U.S. economy when we begin to
use natural gas for transportation, particularly for trucking. Natural gas-powered trucks are
common in other parts of the world. Holding back progress here is a lack of appropriate fueling
stations. But smart, enterprising people are working on this problem, and likely to solve it.

Energy independence may also mean we can ask other nations to share the cost of keeping global
energy supplies flowing. A large share of the U.S. defense budget now goes to securing those
supplies. It stands to reason that countries such as China, India, and Japan, which also rely on
this global network, should pay more to safeguard it.

To be sure, we can't take our energy future for granted. Just one environmental calamity - an oil-
laden train being derailed, fracking mistakes polluting large swaths of groundwater, or even
fracking-related earth tremors - could muck things up badly.

We also need to rethink how we tax energy producers. Their effective tax rate, after various tax
breaks and loopholes, is among the lowest of any industry. This makes little sense, given the
potential environmental costs of oil and gas production.

These caveats aside, the U.S. energy outlook is bright. Given how important energy is to our
economy, so, too, is the economic outlook.

Read more at
http://www.philly.com/philly/opinion/20141102_Indicators_are_positive_for_U_S__energy_outlook.ht
ml#ufqfVxpAbP8vjq2W.99

The Environment:

George Mitchell, Innovator of Fracking, Study Guide

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