The Birth of the U.S. Shale Gas Boom-Part I

Modern hydraulic fracturing technology can trace its roots to 1865 and the Civil War era, while horizontal directional drilling technology received its first U.S. patent in 1891.

Gustavo Coronel | February 7, 2013

Pioneers of hydraulic fracturing

Roberts historical marker Pennsylvania Erle Halliburton statue Oklahoma George P. Mitchell/Photo-Mitchell Foundation


According to the American Oil & Gas Historical Society (AOGHS), “Modern hydraulic fracturing technology can trace its roots to April 25, 1865, when Civil War veteran Col. Edward A.L. Roberts received the first of his many patents for an “exploding torpedo.” From black gunpowder to nitroglycerin to modern explosives to the pumping of high pressure water and sand, it is reported that 90 percent of today’s oil and gas wells have resulted from the process of hydraulic fracturing giving the industry access to “30 percent of U.S. recoverable oil and natural gas reserves” amounting to nearly “seven billion barrels of oil and 600 trillion cubic feet of natural gas.” JPT Online, the “Official Publication of Petroleum Engineers,” recounts that Stanolind Oil performed the first experimental fracturing operation in 1947 at “Hugoton field located in southwestern Kansas.” The first commercial use of fracking took place in 1949 near Duncan, Oklahoma and by 1988 the technology had been applied “nearly one million times.” By 1953, the exclusive license that had been issued to Halliburton was extended to qualified service companies.

The horizontal directional drilling technology that is so widely used in today’s successful hydraulic gas fracturing production received its first U.S. patent in September 1891 but it wasn’t until 1929 when the first private horizontal oil well was drilled near Texon, Texas and then again in 1944 in Venango County, Pennsylvania. Early commercialization of horizontal wells was achieved in the early 1980s by France’s Elf Acquitaine, a government owned oil company. Horizontal well technology was applied in 1987 by BP at Prudhoe Bay, Alaska, with horizontal drilling technology up to that time being applied nearly entirely to crude oil production. EIA, the Energy Information Agency’s 1993 report” entitled, Drilling Sideways – A Review of Horizontal Well Technology and its Domestic Applications stated, “a horizontal well can be anywhere from 25 percent to 300 percent more costly to drill and complete for production than would be a vertical well directed to the same target horizon.”


The oil embargo imposed on consuming countries by Arab producers in 1973 triggered not only a dramatic increase in the price of this commodity but brought urgent attention to the issue of U.S. energy dependence on foreign oil imports, placing it at the top of the list of national priorities. In January 1974, President Richard Nixon confidently predicted: “At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need.” However, by 1980 the country was importing twice the amount of oil as in 1974, when President Nixon made his pledge.

In 1977, a newly elected President Carter warned that the U.S. was running out of natural gas. When he said this he probably did not realize that the Department of Energy had already started an investigation of the natural gas prospects in the Marcellus shale of Devonian age formation located in the eastern United States and that significant amounts of natural gas had been located thanks to this investigation. The problem encountered by the Department of Energy was how to produce it. At the time there was no known technology to do the job. Therefore, the decision was made to develop a joint public and private research project involving the Department of Energy, the industry’s non-profit Gas Research Institute and a team led by the persistent Texas petroleum engineer and entrepreneur George P. Mitchell, who focused on improving a known technology and creating those innovative techniques that he applied to the Barnett shale formation.

George Mitchell had long been convinced that commercial natural gas, primarily methane, could be produced from the impermeable shale reservoirs of his native state of Texas and he contributed much confidence and perseverance to the project.

A detailed report written in May 2012 by the Breakthrough Institute presents a chronological sequence of the efforts that ultimately led to the application of new technologies to the economic production of shale gas. As natural gas production declined in the 1970s the Morgantown Energy Research Center, MERC, one of three energy research centers owned and operated by the U.S. Department of Energy, initiated the Eastern Gas Shale project. They built upon knowledge obtained as early as 1947 and 1949 when hydraulic fracturing was first used to commercially extract natural gas from very dense limestone reservoirs. By 1976 two members of the center were able to patent an early technique to drill directionally in shale. One year later, in 1977, MERC demonstrated that massive hydraulic fracturing could be done in shale. In the mid-1980s the Department of Energy, working closely together with the private sector, drilled its first successful horizontal well, in Wayne County, West Virginia. In 1991, the Gas Research Institute subsidized the first successful horizontal well drilled in the Barnett Shale formation in Texas. This breakthrough was helped by the use of new techniques such as three dimensional micro seismic imaging, originally developed for application in coal mines by Sandia National laboratories, a wholly owned subsidiary of Lockheed Martin Corp. acting as a contractor to the federal government. From 1980 and up to 2002 a tax incentive was offered to producers of unconventional natural gas, a move which contributed significantly to its development.

In 1998, Mitchell Energy achieved commercial shale gas production. By 2002, George Mitchell had sold his company to Devon Energy for $3.1 billion, at a time when production of shale gas had become productive without the need for the Section 29 tax credit, which helped start shale gas production on a large scale. And, as they say, “The rest is history.”


A detailed document of the Department of Energy provides an excellent summary of the mechanics of shale gas production. As described in this document “wells are drilled vertically to intersect the shale formations at depths that can range from 6,000 to more than 14,000 feet. Above the target depth, this is where the shale gas reservoir is located, the well is deviated to achieve a horizontal wellbore within the shale formation. The thickness of these rocks can amount to several hundred feet. This drilling is done in such a way as to maximize the number of natural fractures present in the shale. These natural fractures can provide pathways for the gas contained in the rock matrix and allows it to flow into the wellbore. Horizontal wellbore sections of 5,000 feet or more may be drilled and lined with metal casing before the well is ready to be hydraulically fractured.”


Beginning at the toe of the long horizontal section of the well, segments of the wellbore are isolated, the casing is perforated, and water is pumped under high pressure (thousands of pounds per square inch) through the perforations, cracking the shale and creating one or more fractures that extend out into the surrounding rock. These fractures continue to propagate, for hundreds of feet or more, until the pumping ceases. Sand carried along in the water props enlarges the fracture after pumping stops and the pressure is relieved. The propped fracture is only a fraction of an inch wide, held open by these sand grains. Each of these fracturing stages can involve as much as 10,000 barrels (420,000 gallons) of water with a pound per gallon of sand. Shale wells have as many as 12-100 fracture stages, meaning that more than 5-10 million gallons of water may be pumped into a single well during the completion process. A portion of this water is flowed back immediately when the fracturing process is completed and can be reused. Additional volumes of water return over time as the well is produced. Perhaps one of the best primers on hydraulic fracturing is presented by one of the pioneers in the business, Halliburton, in its interactive ‘Hydraulic Fracturing 101’ presentation.


One of the most formidable hurdles shale gas production has had to overcome is the perceived threat to the environment. The Department of Energy has worked with the U.S. Environmental Protection Agency (EPA) to evaluate the environmental impact of hydraulic fracturing to underground sources of drinking water. In general, however, fresh water reservoirs and the subsurface horizons, where production of shale gas is derived, are separated vertically by thousands of feet.

Spokesmen for Pinnacle, a Halliburton service company, have pointed out that over their 60 years of operation in the area of hydraulic fracturing there has not been one “documented case of any treatment polluting an aquifer – not one.”

Best practices regulating shale gas production and the use and handling of water used in hydraulic fracturing are the object of constant monitoring and improvement by government agencies and private companies. Shale gas production is a highly water-intensive process, with a typical well requiring several million gallons of water to drill and fracture, depending on the basin and geological formation. The vast majority of this water is used during the fracturing process, with large volumes of water pumped into the well with sand and chemicals to facilitate the extraction of the gas; the remainder is used at the drilling stage, with water being the major component of the drilling fluids.

The Department of Energy works with state governments through the Ground Water Protection Council (GWPC) to develop and maintain the Risk-Based Data Management System (RBDMS). Nationwide, 20 states and one Indian Nation now use the RBDMS to help operators comply with regulations. The department has recently enhanced the RBDMS to track and record data related to hydraulic fracturing treatments. DOE has also funded, in part, a Hydraulic Fracturing Chemical Registry to be hosted by the GWPC and the Interstate Oil and Gas Compact Commission (IOGCC). This website, FracFocus: Chemical Disclosure Registry, will be a means for the industry to voluntarily supply hydraulic fracturing chemical data in a consistent and centralized location. In 2009, DOE teamed with IOGCC to form a Shale Gas Directors Task Force to serve as a forum for states to share insights on issues and innovations related to shale gas development at the local, state and federal levels.

In 2010, EPA started a four year study on the impact of shale gas hydraulic fracturing and in 2011 the Department of Energy received a report by the Secretary of Energy Advisory Board providing recommendations to reduce the environmental impact of shale gas production. Temporary suspension of shale gas production has been imposed in the past on several states, New York and Maryland and New Jersey, among others, while environmental concerns are addressed. Other states such as Wyoming, Pennsylvania, Colorado, Arkansas, Louisiana and Texas have applied revised legislation and regulations to the activity. Currently shale gas production in the U.S. seems well established and is poised for expansion.

In Part II of this four part series of shale gas we will examine the current state of U.S. shale gas production and the short-to-medium term prospects of this relative newcomer to the U.S. energy equation.

Gustavo Coronel, who served on the board of directors of Petróleos de Venezuela (PdVSA), has had a long and distinguished career in the international petroleum industry, including in the USA, Europe, Venezuela and Indonesia. He is an author, public policy expert and contributor to

SFPPR News & Analysis.