Harold Hamm Q&A: 'We basically broke the code' on oil shale production

Harold Hamm, the founder and executive chairman of Continental Resources, based in Oklahoma City, has written a book that will be released on Tuesday. The book, “Game Changer: Our 50-Year Mission to Secure America’s Energy Independence,” is a look at the evolution of the oil and gas industry and the politics surrounding it.

Brook A. Simmons, president of the Petroleum Alliance of Oklahoma, said last week that Hamm “played a crucial role in ushering in a new era of U.S. energy production through relentless pursuit of innovation and cutting-edge drilling techniques that unlocked vast oil and natural gas reserves from previously inaccessible formations.”

In an interview, Hamm spoke about the book. Some of the questions and answers have been edited for brevity.

Q: Is there anything to know about the timing of the book? Are you planning to step away or take on a new role?

A: It really was a story that had to be told. So many people are confused really about what went on. They didn’t understand how we turned around the production in this country from terminal decline to the energy renaissance that we’ve experienced. And they didn’t know enough about it to know about horizontal drilling. It’s fairly complex to go down there two miles, turn right or left and go two miles further. It hadn’t been told, it hasn’t been told. And so I just felt it was incumbent upon me to do that, regardless of what I was doing here at Continental.

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Q: The story of extracting oil and gas through hydraulic fracturing and horizontal drilling would seem to involve a lot of other people, including George Mitchell, Larry Nichols and Aubrey McClendon. What was Continental’s main contribution to this modern production technique?

A: I don’t profess to have been there and done this by myself. That’s why (the book) is our 50-year quest. Certainly there were other people around doing different things. George Mitchell … basically worked in the Barnett Shale with vertical wells to prove that he could get gas out of the shale. Larry Nichols took that further, and by taking that horizontally, he made it commercial when he bought Mitchell energy.

That came after what we were doing up there in the Cedar Hills field (in Montana), which was the very first horizontally drilled oil field in the world.

One was proving we could get oil from the shales themselves, which came along in the Bakken (Formation). Everybody thought you could get natural gas from these shales but oil’s a different matter because it’s molecule sized. … Well we basically broke the code … in the Bakken, and it will produce very hugely, if you will, and we made that happen.

Q: Energy independence has been the holy grail for decades. Is it feasible for the United States to supply 100% of its petroleum needs, or what form does energy independence take?

A: Energy independence to me is — whether it’s on a BOE (Barrel of Oil Equivalent) or BTU (British Thermal Unit) basis — if you’re balanced. And certainly we are as a country today. We’ve been hindered somewhat by this administration with their policy on federal lands.

But when you look at it, we’re near 13 million barrels per day (production) with crude oil. And natural gas liquids make up another six and a half million barrels a day. … So you’re close to 20 million barrels a day of liquids right there. Plus all the natural gas that we produce in America and most of that we’re shipping abroad.

It’s a fungible commodity. But all in all, on a BTU (British Thermal Unit) balance basis, we’re right there as energy independent. That makes all the difference in the world. It’s such a big thing when you think about it — how it came about. Going from what everybody considered “peak oil” and “terminal decline,” to where we’re at today has just been a tremendous game-changer, a turnaround.

More: Once a staunch Trump supporter, OKC oilman Harold Hamm is backing someone new for president

Q: There is much in the book about politics and policies that either stifled or could have potentially stifled the production of oil and gas. But the EIA (Energy Information Administration) is predicting record production this year and next. Would you say that the industry has actually been pretty free to explore and produce where it wants to?

A: There’s a few administrations that kind of fumbled the ball forward on energy, several of them. I’m talking about on both sides of the aisle, Republican and Democrat. I mentioned (Richard) Nixon, what he did, putting crude oil under price controls. … Remember price controls? We know how all those turned out. It wasn’t good. Certainly, a lot of these administrations have gotten it wrong on energy and keep fumbling the ball.

That’s another reason "Game Changer" is unique — we did this in spite of all these policies. You have to admit Jimmy Carter’s Fuel Use Act of 1977 was pretty bad when he mandated 100% use of coal. You don’t have to think about that long.

Q: Do you believe fossil fuels — the burning of them has accelerated or influenced climate change?

A: Certainly you can alter the climate. I’m a geologist, I’m a scientist. You see what happens when you cut down all the trees, deforest lands and wind up with desert in some of these areas. Obviously, it can change our environment. Going back to Jimmy Carter again, that policy of 100% mandated coal, they started basically what’s continued today that alters the climate more than anything else. The U.S. actually promoted the use of clean coal around the world. The Chinese quickly adapted, copied all the engineering that was going to build these power plants for coal. And who’s the largest builder of coal plants today? The Chinese. Building almost one a day, 300 last year.

Q: You could have probably sold a lot more copies of the book if you included details of your personal life. Did you ever consider delving into any of that?

A: First of all, I didn’t do this to sell all the copies in the world. I think it will be for sure a bestseller, and we’ve had good reception for it. The biggest problem writing a book is deciding what not to put in it. There’s so much. And this is not an autobiography at all. I sought to really tell the story of the industry and thought that needed to be told. People need to know about it. I thought it would make a good story. So, yeah, I wasn’t out there to sell books.

Q: You've been a major contributor to diabetes research. What do you think is practical in the next decade in terms of medical advances regarding diabetes and insulin pricing? Do you see these problems diminishing?

A: I do. We have addressed all those issues, the pricing of insulin particularly, and put so much heat on those primary insulin providers that basically they had to give up their claim to the patent and come down on insulin prices. We saw people that were actually having to ration their insulin. They couldn’t afford all the insulin they needed at those $300-per-bottle prices.

What do I see in the future? The same thing I saw when we established the Harold Hamm Diabetes Center. And that is that — with the proper research, determination and commitment — we can find a cure for diabetes.

This article originally appeared on Oklahoman: Harold Hamm on energy independence, climate change and diabetes