Richard Hamilton Smith/Gallery StockEast Texas between Houston and Galveston is a low flatland of cayenne pepper heat coming off the tepid waters of Galveston Bay. The cries of laughing gulls and great-tailed grackles fill the salty air. Donkey-head wells and offshore rigs are moored opposite shrimp boats.
I’m here to check out an oil well I own. And I’ve come to answer a question: Should I hang on to its mineral rights and keep getting my small royalty check each month? Or sell them to a wildcat suitor who wants to “frack” the well?
This could be my J. R. Ewing moment.
Like many Americans, I’ve followed the debate over fracking from a distance. The technology, which uses prodigious amounts of pressurized water laced with chemicals to break shale rock and liberate entombed oil or natural gas, is either going to help the United States achieve an elusive goal—to become energy independent—or unleash a host of problems.
As a science writer from a famously liberal state, Massachusetts, I’m keenly aware of how my values clash with famously conservative Texas. In Massachusetts, we post “frog crossing” signs at every vernal pool. In Texas, they post “pipeline crossing” signs at almost every intersection.
Yes, Everyday Folks Own Oil Wells
I became an oil well owner in 1968, at the age of 22. My father was running for governor, and he had to divest himself of many holdings to avoid conflicts of interest. He gave my sisters and me part ownership of a well that he had bought from an old Army buddy. That might sound pretty grand, but the well had been in operation for years and was producing a trickle, enough to pay each of us $28 a month.
It wasn’t that unusual at the time to own an oil well. In many countries, the government owns the rights to oil, gas, and other underground resources and controls development. Here, oil companies deal directly with the people who own the booty, which tends to encourage entrepreneurialism and development, for better or worse.
In 1973, I started receiving letters from Exxon explaining that the company planned to “unitize” our oil field, so we’d be paid a percentage of what the entire field produced rather than what came from our individual well. There was a risk: We could earn less. The company offered to buy me and my siblings out for $5,000 each.
My sisters were elated. One bought a horse with the money; the other put an addition on her house. I figured that if Exxon wanted our well so badly, they had to know something I didn’t, so I hung on to my share. The royalties plunged to about $10 a month.
I was beginning to feel a little less like J. R. Ewing and a lot more like Cliff Barnes, the dupe who was always getting outfoxed by the Ewings. But time passed and technology progressed until, last year, I started receiving letters and phone calls again. They were from wildcatters who wanted to use newer techniques to siphon the remaining oil out of the field, now called the Webster tract. In some cases, they were sending $6,000 checks to buy my share.
The Fracking Debate Gets Personal
As the oilmen explained it, primary production had drawn about 80 percent of the oil out of the field. But the remaining 20 percent was still lying below, and they believed they could recover it. I had read most of the literature about the negative effects of fracking: how it could contaminate groundwater, contribute to air pollution, create wastewater issues, and, according to some anecdotes, even cause tap water to become flammable.
But I had also noticed what fracking had done for the economy. For example, by tapping previously locked natural gas, it had enabled gas prices—and home heating and electric bills—to remain low for several years. I watched as Salem, Massachusetts, replaced its old coal-fired power plant
with a new gas-fired one, thanks to fracking. But did I really think that my well was going to help usher in energy independence—or just more environmental problems?
I needed to do more sleuthing. I clicked on Google Earth to locate the Webster tract. It consisted of about a dozen wells just north of the town of Webster, an aerospace hub of 10,500 people 20 miles southeast of Houston.
I went online to do research and discovered that Texas has a 100-year history of derricks and drill rigs coexisting beside homes and farms. Cities like Fort Worth, Dallas, and Houston boomed because of the black gold sitting in subterranean vaults. As a result, I thought I might find unconditional support for oil and gas extraction, but instead I found that Texas is having many of the same debates as the rest of the country.
A North Texas family was awarded $3 million last year in a landmark suit against a company whose fracking operations, they argued, had made them sick and killed some of their ranch animals. In November, Denton, north of Dallas, became the first city in Texas to ban fracking altogether, although legal challenges remain.
Other articles gave me important historical context. What we know today as fracking began in 1981 when Mitchell Energy was the first to drill horizontally to reach the Barnett shale formation beneath Fort Worth. It used a “slick-water frack”—which involves adding chemicals to well water to allow it to flow at a higher rate—and dramatically increased the amount of retrievable natural gas.
In the late 1990s, these technologies, coupled with other innovations, helped trigger a nationwide fracking boom. Today, the Newark East Field underlying the Barnett formation continues to be the largest producer in Texas, accounting for 30 percent of all the natural gas extracted in the state. Because it is so big and was the first field to be exploited, the early frackers made mistakes and garnered their share of critics.
Newer players do not want to repeat that history. I found an online forum for land and royalty owners above the Haynesville shale formation, which covers 9,000 square miles in East Texas, northwestern Louisiana, and southwestern Arkansas. The website demonstrates a determination to get things right. Its introduction reads, “As exciting as this shale is, we know that we have a responsibility to do this thing correctly.”
Then I called the owners of the Webster tract: Denbury Resources in Plano, Texas. I asked Jack Collins, head of owner relations, when the company planned to start fracking my well. He replied, by e-mail, “We have no plans to frack Webster field, but we do plan to commence a CO2 flood of the field next year.”
With fracking, fluids are forced into a wellhead to break up the shale and free the oil or natural gas. With CO2 flooding, carbon dioxide is pumped into a well and adheres to the droplets of oil in the shale. It’s a little like mixing turpentine with paint: The oil droplets swell and become thinner so they can be pumped out. (CO2 is also used to boost natural gas extraction, but this practice is less frequent.)
In 2015, Denbury plans to pump human-made CO2 emissions—via pipeline from a new power plant being built in Mississippi—into the Webster field. After the oil is extracted from Webster, the company intends to leave the remaining carbon dioxide underground, where it cannot contribute to global warming. The federal government will provide the plant with a grant to participate in the project.
I wondered: Had I become an investor in an energy company that is doing carbon sequestration and oil extraction right? I decided to go to Texas to find out more.