His engineers kept telling him the shale venture was nothing but a waste of money.
It's a good thing George Mitchell wasn't listening as he drilled the first wells in the Barnett Shale formation in Fort Worth, Texas, in 1981...
Their pessimism toward developing the Barnett Shale didn't deter him.
Even back then, he knew he was sitting on a wealth of natural gas.
The only problem was figuring out how to tap into the shale rock, which is not very permeable.
Over the next twenty years, Mitchell sunk a lot money into research and methods for how to drill the shale.
He finally sold his company to Devon for $3.5 billion back in 2002, and is still considered "the Father of Shale Gas" to this day.
Thanks to a recent study conducted by the Perryman Group, we can see just how wrong Mitchell's engineers were.
Since 2001, the play has created over 100,000 new jobs and more than $65.4 billion has been injected into the economy.
Over 14,000 Barnett wells produced about 1.8 trillion cubic feet of natural gas last year, bringing the total output from the play to more than 9 trillion cubic feet of natural gas.
In 2011 alone, activity in the Barnett has generated more than $11 billion — with 70 rigs currently operating in the area.
But this isn't some anomaly, considering we've seen this same prosperity happen time and again since the Barnett rush began, especially in cases like the Bakken.
Trust me, we're not the only ones hoping for continued shale success in the States...
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All Eyes on Us
The world is waiting with bated breath for the outcome of the U.S. shale boom.
Some countries can't wait any longer.
Poland's shale development is gaining traction after one drilling venture proved successful. Last spring, the EIA estimated that Poland held more than 187 trillion cubic feet of technically recoverable reserves.
Anything that might help the country ease its dependence on Russian gas is worth the effort. (Imagine having to rely on Russia for 70% of total natural gas demand!)
It's the same story wherever shale gas is found.
In Mexico, where the once-prominent Cantarell oil field is now a shell of its former glory, PEMEX expects to try its luck in shale gas.
Over the next three years, the Mexican state oil company plans to drill 175 wells to evaluate its shale gas potential, spending nearly a billion dollars per year on the program.
This development will take some time...
In five decades, PEMEX expects to have more than 6,500 wells producing 8 billion cubic feet per day — or about 14% of its total gas consumption.
Mexico is already investing $10.4 billion building almost 3,000 miles of natural gas pipelines in anticipation for future gas production.
Unfortunately, there's a slight hitch in their plans.
As you know, the use of hydraulic fracturing is a critical part of the production process. Several million gallons of water are needed for each well.
The shale gas deposits found in Mexico are located in areas with no water. The development of this region alone could make waterless fracking technology invaluable to future production.
Meanwhile, Russia is practically bribing Exxon for the technology used to tap into shale rock.
A deal inked with Rosneft has given Exxon access to oil exploration in the Arctic Sea, but it comes with a different kind of price tag...
In exchange, Exxon will offer Rosneft the chance to invest in several of its tight oil drilling projects in Texas.
Of course, Exxon themselves would also be in the dark if it weren't for the $41 billion the company spent buying XTO Energy.
And there's one country watching Uncle Sam's shale boom closer than anyone else.
The Chinese have nearly 50% more recoverable shale gas than the United States, with more than 1.2 quadrillion cubic feet available.
Make no mistake; that's one of the main reasons the Middle Kingdom's national oil companies have been pouring billions of dollars into U.S. shale ventures.
Very soon, China will be looking for a shale revolution of its own...
Until next time,
Editor, Energy and Capital