:   |   |   |  
| Email Alerts | New! Mobile Apps

Meet the billionaire behind America's 'great renaissance of oil'

Harold Hamm, founder and CEO of Continental Resources, owns the rights to more oil in American ground than anyone. (Jim Seida, NBC News)
Harold Hamm, founder and CEO of Continental Resources, owns the rights to more oil in American ground than anyone. (Jim Seida, NBC News)
Set Text Size SmallSet Text Size MediumSet Text Size LargeSet Text Size X-Large
Share
Updated: 11/29/2013 3:51 am
OKLAHOMA CITY, OKLA. (NBC) - In the history of oil, this fall is a tipping point, the moment America gurgles past Saudi Arabia and Russia to become the world’s petroleum king.

The man most responsible is Harold Hamm, 67, a drawling, blue-eyed billionaire, a sharecropper’s son who grew to be the richest energy mogul in America. He was the first to profitably “frack” North Dakota oil wells, leading a revolution in the way the nation coaxes energy from the earth and draining momentum from the search for cleaner fuel sources. His company, Continental Resources, has quintupled in value in a matter of years, emerging as a swaggering promoter of eco-friendly, effectively infinite oil — along with all the supposed good that flows from it.

Now Hamm seems ready to fight anyone who says otherwise. “Anti-frackers are disingenuous,” he said. “They bow to the religion of environmentalism.”

In a series of interviews with NBC News, the self-described nature-lover crowed about “the great renaissance of oil” he helped create and ridiculed those who blame oil companies for warming the climate or poisoning the earth.

“Some of the extremists are calling it carbon pollution,” he joked between appreciative bites of cheeseburger. “I mean, all of us breathe out carbon dioxide. Are we going to quit breathing?”

'This is a new era'
You’ll find no better guide to the new world of energy than Hamm. He fell in love with oil as a gas-pumping teenager, borrowed money to become a wildcatter in his 20s, and spent the next four decades finding treasure where others failed or never tried.

Last month, when U.S. Department of Energy data projected that America had become the globe’s new fuel pump and fuse box, Texas remained the biggest producer of crude oil. North Dakota, however, showed the fastest growth, approaching a million barrels of oil a day, up from 10,000 barrels a day in 2003 — and powering the largest five-year petroleum increase in U.S. history.

“This is a new era,” the head of the U.S. Energy Information Administration said at the time, “that you wouldn’t in a million years have dreamed about.”

Hamm did more than just dream about it. He recognized the potential of North Dakota’s Bakken oil field, which now produces more crude than Alaska’s Prudhoe Bay, and his company remains the area’s largest lease holder. This month Continental Resources told investors that the region contains enough recoverable oil to double the official count of U.S. reserves and enough "oil in place" to meet the nation’s needs for hundreds of years. While those claims have not been verified by regulators, Hamm’s track record makes them hard to doubt.

“He is an expert at execution,” said Rudy Hokanson, an investment analyst for Barrington Research in Chicago, “someone who creates maximum wealth where others may think small.”

A geopolitical dream come true
On a recent cloudy day in central Oklahoma, a short drive from the shack Hamm slept in as a boy and the Merle Haggard song he lived picking cotton with his twelve siblings, Hamm showed NBC News around his newest oil patch, a promising seam of shale topped by endless prairie.

“I miss oil patches,” he said, stepping away from a crowd of handlers and a caravan of white Chevy Tahoes.

This patch is close to Hamm’s commanding new headquarters in Oklahoma City. From his office, seated in a leather-backed chair or striding across cow-skin rugs, he can see clear to the horizon line. Out here in a white hard hat and boot-cut jeans, the view is more profound.

“Oil is ancient wealth in the ground,” he said, as one of his rigs whined and mewled over his shoulder, boring through the shale beneath his feet.

It’s also part of a geopolitical dream come true. Less than a decade ago America seemed poised for a fifth straight decade of shrinking oil production, part of an alarming global dry-up. Experts warned of “peak oil,” an imminent time when demand for the world’s black oxygen would race ahead of supply.

“We’re addicted to oil,” declared President George W. Bush, who admitted that supplies of our drug were “limited.”

Today, to Hamm’s delight, the panic seems misplaced. “The peak oil people have all been wrong,” he said. “They completely missed the boat.” Since reaching a high of 60 percent in 2005, net oil imports have fallen by nearly half and domestic production is at a 25-year high and rising faster than ever.

By 2017, America is expected to be “all but self-sufficient,” according to a report by the International Energy Agency, which attributed this “profound” change to the Hamm-led rebound in oil and gas production. Yes, the nation still uses more crude than it pumps but when the IEA factors in liquid natural gas and biofuels, the balance swings in favor of energy independence.

“It’s tremendous,” said Hamm, who expects to more than triple his own production by 2017.

“We have more oil than the Saudis,” he said. “So we need to develop it.”

Energy independence: Just a slogan?
More than eight in 10 people support developing domestic oil if it helps cut our reliance on the Middle East, according to a recent Esquire/NBC News poll.

Forty years ago this fall, an Arab oil embargo pricked American confidence, tripling gas prices and crippling the economy for most of a year. Eight consecutive presidents have since pledged to move the nation toward self-reliance, arguing that it could mean jobs, lower gas prices and fewer military quagmires.

Hamm couldn’t agree more. “I remember the gas lines,” he said. “I also remember all the lives lost trying to stabilize the regions with oil in them.”

But oil is priced on a global market, shackling American prices to the health of wells worldwide and making “energy independence” more of a slogan than a genuine difference-maker, experts say. Ironically, said Chris Knittel, who co-directs the center for Energy and Environmental Policy Research at MIT, the closest thing to “independence” may be an oil alternative — since the sun and wind will always be more reliable than anything humanity can promise.

That’s the shakiest pillar beneath Hamm’s work: his ability to pursue it. Forget the classic Beverly Hillbillies character who found black gold with an errant shotgun blast. Forget big underground caverns of black sludge. That kind of “free oil” is gone, Hamm admitted, and so are the days of simply dropping a straw and drinking up money. As a result he and his industry are rushing to mint new skeleton keys for reservoirs once thought to be locked, outraging environmentalists and leading to fracking bans in Europe and the American Northeast.

Most wells today begin in the shape of a giant “L,” with the lower leg expanding contact with the “tight oil” trapped in underground shale. That leg is then “fracked” with high-pressure bursts of water, sand and chemicals, freeing the remnants of dead plants and animals, the fossils in “fossil fuel,” which are in turn refined and squirted around America.

As Hamm and his competitors have gotten better, however, the process has gotten more complex, the goals more ambitious. The rigs he showed off in Oklahoma and his big dippers in North Dakota can bore down through two miles of earth, turn two miles sideways, and pierce the mouth of a reservoir the size of a basketball hoop — a process Hamm likened to “sinking a jump shot four miles away.”

And not just one jump shot. More wells today are drilled at different depths and angles, all off the same initial “L.” A rig team can sit in place and frack each leg up to 30 times before moving its lance to a new location. The product that follows isn’t thick and black but light and green, almost like wheat grass.

“Look at that,” said Hamm, handing off a Gatorade bottle filled with his product, “the finest premium crude” in the world. He smiles at the sight of it, and no wonder. “It’s the color of money,” he said.

Hamm vs. environmentalists
To a growing number of others, however, it’s an environmental nightmare.

Comparisons to Steve Jobs and the Apple-led tech revolution are the cliche of our time. In the oil business, the comparison is unavoidable, in a backwards way. While Jobs and Apple pushed the world into a sci-fi future, Hamm and Continental have invented a way to extend the past. It’s as though Apple had built a better desktop and prolonged the life of the pager — only with oil, environmentalists say, the health of the planet is in the balance.

Environmentalists fear that Hamm’s oil boom siphons political will and urgency needed to create green alternatives. Unless there is a “complete phase out of carbon emissions” in the next half-century, according to a widely cited paper by researchers in China and America, the globe will suffer the apocalyptic worst of global warming — a fate that activists worry Hamm’s work helps guarantee.

They also say that fracking may poison water supplies, create earthquakes, disrupt wildlife and lead inevitably to deadly spills. The practice has been banned in France and Bulgaria, and the European Parliament recently voted to force all would-be frackers through an onerous environmental review process. The opposition has been fiercest in the Northeast, where opponents have attempted to block trains carrying North Dakota oil and inspired a Hollywood film, “The Promised Land,” which dramatizes the worries of anti-frackers.

"Here again we have some environmental zealots making outlandish and unsubstantiated claims,” said Hamm, who points out that fracking has not been shown to taint ground water, although some researchers have linked new gas wells to spikes in arsenic levels. He notes that similar protests have yet to take off in oil-rich lands like North Dakota and Oklahoma, where there are fewer people and more of them getting rich on the boom.

That’s given Hamm almost unlimited running room, and a cocky attitude toward his environmental foes. He waves off their every concern, adding that what Continental does is actually “in sync with nature.” He drills numerous wells off a single pad, for example, leaving more habitat undisturbed. He admits that there are spills — Continental itself has spilled more than 200,000 gallons of oil since 2009, according to documents acquired by ProPublica — but says the industry cleans them up, taking an assist from bacteria that “eat up the oil.”

“I love nature,” says Hamm. “I’m not going to do anything to detract from it.”

After the well tour, Hamm drove to Chickasha for lunch, finding a counter seat at J&W Grill, a box-car of a restaurant on Choctaw Avenue. After the death of conventional drilling in the 1980s, the town withered. Half the snooker tables have been yanked from the men’s club. The mall was all but customer-less on a Friday afternoon.

But Chickasha is changing again, now that Hamm has opened more than a dozen well projects nearby. The J&W Grill was packed with people eating slaw dogs and sliders. “It means everything,” says Lendl Pettigrew, president of the Chickasha Savings and Trust. He counts a dozen new business checking accounts in the last year alone.

“It’s a different age” says Hamm. “We’ll be producing oil for hundreds of years.”

By Tony Dokoupil, Senior Staff Writer, NBC News
Share
0 Comment(s)
Comments: Show | Hide

Here are the most recent story comments.View All

The views expressed here do not necessarily represent those of Action News Now

No comments yet!
Weather Center & Blog
Temp:
72°
Feels Like:
72°
Wind:
NE 7 mph


Inergize Digital This site is hosted and managed by Inergize Digital.

Mobile advertising for this site is available on Local Ad Buy.

© 2014 GOCOM Media of Northern California