Sernovitz - The green and the black : the complete story of the shale revolution, the fight over fracking, and the future of energy

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To Molly,
Every word is ours

I had never been to Northeast Harbor, Maine, before, but I felt like I was home. The July weather was obscenely perfect. My lungs and mind had been liberated from a strangling Manhattan summer by days in the spruce and pine of Acadia National Park. I was there for the wedding of an old friend. The gathered were people I had known for fifteen years. Or they were people who felt wonderfully, immediately knowable: they were from the same colleges, from the same opinions, from everywhere but now living in the same neighborhoods of San Francisco, Washington, Boston, New York.

I hugged the mother of the groom, both of us giddy with the privilege of the salt air, the absorbing greens, most of all the occasion itself. Eventuallyone can hug for only so longwe had to make small talk. She asked me if I was still writing. I am expert at handling that awkwardness. I mumbled something nonsensical and sort of untrue: Always. It had been nine years since my second novel had been published.

Then she asked me if I was still working in investments and oil and whatnot.

That was easier to answer, I thought. Yes.

Well, she said, I hope you dont frack.

I would not bring clouds into Northeast Harbor, into that celebration of love. I smiled too widely and asked too loudly, But tell me, Jean, how are you ?

* * *

I WORK IN THE OIL INDUSTRY. I live in New York. For many years, without much problem, I kept those worlds separate, body and mind. But in 2010, the hydraulic fracturingfrackingof gas wells infiltrated that hypothalamus of the metropolitan brain: it appeared on HBO. And ten months after the anti-fracking documentary Gasland debuted, a New York Times investigative reporting series attacked shale gas development, impact by impact. At the same time, inside the oil and gas business, we were beginning to understand that the advances in fracking and horizontal drilling techniques were swelling into something more than just ways to extract oil and gas from disconnected plays in Texas or North Dakota. The technological improvements, the volume of drilling, and the well-to-well leaps in productivity were aggregating into a gusher of American oil and gas production and an unforeseen energy renaissance. Looking back, the more stunning absurdity of the mother of the grooms question was not that amid the canaps we were discussing seventy-year-old, once obscure oil and gas well stimulation techniques. It was that the question in 2011 was only about the local impact of fracking. For as we talked, unknown to us both, fracking and related technologies had already begun to reshape the economy, environment, energy, and balance of power of the world.

Now the questions on the shale revolutionand all of its effectsfrom friends, family, investors, and strangers are constant. I am often their most proximate oilman. Doesnt fracking cause taps to light on fire? Doesnt it cause earthquakes? Isnt the boom just about gas? Isnt the boom hype? Hasnt the boom busted? Isnt it increasing carbon emissions? Isnt it decreasing carbon emissions? Arent we now energy independent? Isnt Russia toast?

The people grilling me sense that fracking is important. But the shale revolution has erupted so quickly and has changed so continuously that the questions often seem to refer to issues inhabiting different timescales. Some are about problems, like Gasland s lit faucets, that have been addressed, or were never exactly problems to begin with. The answers to other questions, such as the shales long-term impact on commodity prices or greenhouse gas emissions, demand forecasts that weve only started to develop.

The questions also tend to be narrow. They focus on frackings threat to water wells, or gas prices influence on Americas competitiveness, or the value of oil company bonds. But people rarely seem to wonder how all the questions interact. To meat bottom, this is the reason for this bookthe understanding of the shale revolution, one of the most unexpected and consequential changes of the last decade, resembles the classic blind men and the elephant problem. In the Indian fable, each blind man touches only part of an elephant and extrapolates from the part he feels what the whole elephant must be: a snake, a fan, a wall, the trunk of a tree.

When the U.S. oil industry was just beginning to adapt long-standing horizontal drilling and fracking techniques to unlock previously inaccessible reservoirs of gas and then oil, Americans couldnt have been expected to see the whole elephant. Seeing it was hard enough for us who worked in the energy sector. But too much has changed, the effects are too pervasive, and the elephant has stormed into the room. For the first time in forty years, we now live in a country of abundantmaybe too abundantoil and gas. As a result, executives are trying to anticipate whether cheaper American energy will persist when deciding whether to build a factory in Shenzhen or South Carolina. College trustees are weighing the morality of investing in fossil fuels, and their investment offices are fretting over how to do so in an upended world. Commuters are anxiously hoping that the lower gasoline prices that came for Christmas 2014 will last forever. Communities are debating whether fracking is a danger to their groundwater or a savior to their hometowns. And policymakers outside the United States are contemplating their own national direction: to run away from or copy, if they can, the American boom.

Seeing the whole elephant doesnt make any of those decisions simple. The future is not linear; cause bumps into effect and knocks into cause. The boom puts valuesabout neighborliness, property rights, sacrifice, our responsibility to the planets inhabitants today and to generations to cometo the test and in conflict. But too many people, Ive found, are trying to answer the thorny questions sprouting from the boom with limited information. They hear only from people whose livelihoods depend on advocating or opposing the shale revolution. They hear only from the green or the black, environmentalists or the oil industry, lining up on the usual sides.

* * *

I WAS NOT BORN the son of a wildcatter in the West Texas scrub. For twenty-two years, I couldnt tell you what a wildcatter was or what Texas was like, save my unshakable knowledge that everyone there still wore cowboy hats. Maybe I also knew it was hot. In college I studied European history and was gripped by a dream of an academic career, until a summer of silence in the British Library previewed a lifetime of the same. In my first job out of college, at Goldman Sachs, I was assigned to the oil industry team in the equity research department because, well, thats where an opening was. Three years later, I announced that I was completely and irreversibly done with Wall Street and quit to write novels. For six years I lived in the East Village, stretched a jar of pasta sauce over as many noodles as it could go, and tried to will myself to be F. Scott Fitzgerald. Two novels were published. I was not declared the new Fitzgerald. And then, fettuccine money dwindling, I found out that I was apparently neither completely nor irreversibly done with Wall Street. Since 2004, I have worked at an oil-and-gas-industry-focused private equity firm, for much of that time as a managing director. We invest in small oil and gas producing and oilfield service companies. We also directly buy, operateand, yes, frackoil and gas fields.