The Boom

The New Energy Order

The owners of undeveloped land in Pennsylvania were surprised to receive an energy company’s unsolicited offer of $400,000, plus royalties, to drill on their land for natural gas. They had never heard of the company, Oklahoma’s Chesapeake Energy, and the area where it wanted to drill was useless to local farmers. Unbeknownst to the landowners, their farmland sat on the Marcellus Shale formation, running from New York to Pennsylvania, Ohio and West Virginia.

The owners discovered that Chesapeake was the largest well driller in the world, with a 2002 annual budget of more than $20 billion. Every year, Chesapeake drills upward of 1,000 wells, using fracking to unleash trapped natural gas from inside rock – mostly shale – formations, some of which are a mile deep.

Chesapeake and the other entrepreneurial frackers that first exploited such untapped reserves were independent firms, not global energy giants, such as Exxon or Mobil. Chesapeake took risks to make its wells profitable. The gas lay beneath suburban housing developments and remote, rocky farms. Once discovered, its abundance upset expectations about available energy from nuclear and...