Saudi America: The Truth About Fracking and How It’s Changing the World

105 Pages·2016·1.1 MB·English

by  Bethany McLean

Saudi America The Truth About Fracking and How It’s Changing the World Copyright © 2018 by Bethany
McLean All rights reserved
Published by Columbia Global Reports
91 Claremont Avenue, Suite 515
New York, NY 10027
globalreports.columbia.edu
facebook.com/columbiaglobalreports
@columbiaGR
Library of Congress Control Number: 2018949784
ISBN: 9780999745458
Book design by Strick&Williams Map design by Jeffrey L. Ward
Author photograph by Miranda Sita

CONTENTS
Introduction
PART ONE
SHALE REVOLUTION
Chapter One
America’s Most Reckless Billionaire
Chapter Two
The Brain Trust
Chapter Three
Debt
Chapter Four
Skeptics
Chapter Five
Bust
Chapter Six
It Changes the World, but It Ends in Tears
PART TWO
SAUDI AMERICA
Chapter Seven
America First
Chapter Eight
Permania
Chapter Nine
Game of Thrones
Chapter Ten
A New Era?
Chapter Eleven
Make America Great Again
Chapter Twelve
Losing the Race
Epilogue
Further Reading
Notes
Introduction
In the late afternoon on New Year’s Eve, 2015, the Theo T, a hulking, dark gray
Bahamian tanker, gingerly maneuvered in the light rain through a channel from
the North Beach Terminal at the port of Corpus Christi in southern Texas into the
open waters of the Atlantic Ocean. The Theo T was fully loaded with American
crude oil that had been drilled by Conoco Phillips in Texas’s Eagle Ford shale, a
rock formation deposited over sixty-five million years ago that became, in the
modern age of fracking, one of the most prolific oil fields in the United States.
The oil had traveled one hundred miles through pipeline owned by San Antonio-
based NuStar Energy. Twenty days after the Theo T disembarked from Corpus
Christi, the oil would arrive at Marseilles in the Mediterranean Sea, more than
five thousand miles away, where Vitol, a huge international energy trader, would
take ownership of it.
The Theo T’s seemingly routine journey was anything but. Two weeks earlier
President Barack Obama had lifted the ban that for some four decades had
essentially prohibited the export of American crude oil.
Ever since a series of 1970s era laws, all of which were passed during
crippling fears of oil shortages, the export ban existed as both a great rebuke and
a great contradiction. On one level, the ban flew in the face of the free market
ideals America holds so dear. But even as presidents from Ford to both Bushs
emphasized the importance of “energy independence,” the country had in fact
become more and more dependent, particularly on the Middle East, and more
and more embroiled in the region’s politics. By the spring of 2006, U.S. net
imports of crude oil and petroleum accounted for almost two-thirds of our
consumption.
By the time Theo T set sail, carrying the first American oil export of the
twenty-first century, the energy world had been entirely turned upside down by
an epic development few had foreseen. America was an oil powerhouse, ready to
eclipse both Saudi Arabia and Russia, and was the world’s largest producer of
natural gas.
Few people saw this coming. This remarkable transformation in the U.S. was
brought about by American entrepreneurs who figured out how to literally force
open rocks often more than a mile below the surface of the earth, to produce gas,
and then oil. Those rocks—called shale, or source rock, or tight rock, and once
thought to be impermeable—were opened by combining two technologies:
horizontal drilling, in which the drill bit can travel well over two miles
horizontally, and hydraulic fracturing, in which fluid is pumped into the earth at
a high enough pressure to crack open hydrocarbon bearing rocks, while a so-
called proppant, usually sand, holds the rocks open a sliver of an inch so the
hydrocarbons can flow. A fracking entrepreneur likens the process to creating
hallways in an office building that has none—and then calling a fire drill.
In November 2017, production topped the ten million barrel a day record set
in 1970, back in the last gasp of the legendary oil boom. This year, U.S. oil
production is expected to reach almost eleven million barrels a day, according to
the U.S. Energy Information Administration. The country’s newest hot spot,
Texas’s Permian Basin, now ranks second only to Saudi Arabia’s legendary
Ghawar oil field in production per day, according to oil company
ConocoPhillips. Stretching through northern Appalachia, the Marcellus Shale
could be the second largest natural gas field in the world, according to geologists
at Penn State. Shale gas now accounts for over half of total U.S. production,
according to the EIA, up from almost nothing a decade ago.
Last year, the U.S. imported less than one-third of its daily oil demand, and
the Energy Information Administration says it’s possible the U.S. will become a
“net petroleum exporter,” meaning that the amount of exports will more the
offset the amount of imports, by 2022. “It [shale] is monstrous,” says Will
Fleckenstein, who drilled his first horizontal well in 1990 and is now a professor
of petroleum engineering at the Colorado School of Mines. In part due to
ongoing improvements in technology, he says, “It is impossible to overstate the
hydrocarbons that it is technically and economically feasible to produce.”
The apparent new era of American energy abundance has already had a profound
impact around the world. Economies from Russia to Saudi Arabia to Venezuela