In “The Frackers,” Wall Street Journal reporter Gregory Zuckerman tells a story about a few of Oklahoma’s most prominent businesspeople. How he does so is revealing, and of interest to Oklahomans.
Although Zuckerman doesn’t put Oklahoma in the title of the book, he might as well have. Oklahoma figures more prominently than any other state: three of the six main characters in the book — Aubrey McClendon, Tom Ward and Harold Hamm — are Oklahoma natives whose businesses are based in Oklahoma, and most of the book is dedicated to their stories. A fourth character, George Mitchell, a hydraulic fracturing pioneer from Texas, sold his company to Devon Energy.
It’s not every day that a Wall Street Journal reporter writes a book in which Oklahoma plays such a big part.
Many Oklahomans already know at least in general terms the story told in “The Frackers.” So they should: much of the state is home to oil wells, and most Oklahoma residents likely know someone who works for an oil and gas company. Not to mention that McClendon, Ward and Hamm are household names in Oklahoma.
As descendants of participants of the state’s formative land runs, residents of the Sooner State can also probably relate to the race to lock up drilling rights nationwide.
But Zuckerman is, of course, not writing for Oklahomans; he is trying to reach a much broader audience. His typical reader is likely unfamiliar with the petroleum industry, and doesn’t even know anyone from Oklahoma.
So perhaps because Oklahoma is foreign to most of his readers, the author spends a lot of time describing the characters in his story, who are not as well known outside of the state, and describing how their origins and personalities fit in with their life’s work.
The author pays a lot of attention to McClendon. McClendon, of course, has the most moneyed origins of the three — as a Kerr, he is nearly Oklahoma royalty. He is portrayed as smart and competitive, and outgoing and charismatic as well — a natural leader. Ward, by contrast, while also bright and competitive, is more introspective and thoughtful. He does not come from a wealthy background, and his upbringing is described as being affected by the scourge of alcoholism.
Both McClendon and Ward are well-suited to being landmen, the former negotiating deals and the latter doing the analytical work in the office. Zuckerman says the pair elevate the position of landman. He describes landmen as traditionally the “Rodney Dangerfields” of the oil patch because they command little respect: “Movies are made about wildcatters. Jokes are made about landmen.” Countering that image, Chesapeake is a company run by landmen, and puts a premium value on the talents of its landmen.
It seems to follow from their personalities, according to the author, that while McClendon is suited to dealing with bankers and investors at Chesapeake, Ward takes charge of operations and relates with people in the field.
Zuckerman also spends time delving into Hamm’s background, the most colorful of the three. Perhaps reflective of his country roots as the 13th and youngest child of sharecroppers, Hamm “talked like a hick” and came across as a “dumb country bumpkin” early in his career, a longtime friend of Hamm’s tells the author. That led to Hamm being underestimated in his business dealings, often to his advantage, according to the same friend.
More than a few Oklahomans with experience working with people from the coasts know what it’s like to feel underestimated.
Even though Hamm later has more wealth, and has by then worked hard on his public speaking and demeanor, his down-to-earth public persona hasn’t changed. Nor has McClendon’s flashier persona. The author describes how in 2008 McClendon would sit in his floor seats at Thunder games with his relative, Sports Illustrated cover model Kate Upton. Hamm owned his own front row seat close by. “Few noticed him, though.”
The main characters have interesting, and divergent, views of money and debt. McClendon has the most comfortable relationship with money, and doesn’t seem to have qualms about spending or borrowing it. Ward, by contrast, doesn’t like to borrow money, but feels he had no choice but to borrow money if he wanted to succeed in the oil and gas business. “I didn’t have much to start with in life, so without leverage I wouldn’t have anything,” he says.
Hamm is even more averse to using other peoples’ money. He states that the only reason his company, Continental Resources, went public was because it was the only way to raise money cheaply enough to find oil. He further says succinctly:
“I don’t like using other peoples’ money, it changes you (by making you into a salesperson). You believe your own bull, it distorts you.”
Hamm isn’t particularly warm towards bankers, either. He recounts with obvious distaste a time that he watched a group of bankers standing in a parking lot, arguing over who had eaten a piece of pie and should pay the biggest portion of the tab. Oilmen, he implies, would be too generous do that.
Zuckerman’s description of the main characters is matter of fact and uncritical, possibly to ensure access to them, but also reflecting genuine admiration. Time and again, he makes reference to America’s newfound economic standing caused by the shale revolution, and how McClendon, Ward and Hamm foresaw what government experts and global oil companies such as Exxon and Chevron failed to appreciate. Not only that, but he describes in detail their work ethic and the many times they overcame setbacks.
Zuckerman doesn’t shy away, however, from describing in detail the freewheeling spending that led to shareholder revolts at Chesapeake and SandRidge Energy, ultimately costing McClendon and Ward their jobs.
And he gives a lot of space to opponents of fracking, even if he downplays the perceived environmental threats.
Chesapeake’s billboards touting a responsible energy future, and Continental’s billboards reminding people that horizontal drilling creates jobs, seem an answer that is part public relations, part advertising, and part confirmation of the truth of Harold Hamm’s wise quote about other peoples’ money — that you have to sell yourself if the public owns your company.
While the story of hydraulic fracturing is still being told, the author sums up the wildcat profession as “quintessentially American.”
He could say the same about McClendon, Ward and Hamm.