Iconic Houston oilman and entrepreneur George P. Mitchell, at 91, is not resting on his laurels. Last December, he dedicated the George P. Mitchell Physics Building at Texas A&M University, his beloved alma mater, following a $52-million donation to create a new physics institute that includes a second building. His goal is to elevate A&M's reputation and compete with Ivy League schools on the East and West coasts.

In June, son Todd went to Amsterdam to accept on his behalf a Lifetime Achievement Award from the Gas Technology Institute, presented during its conference.

"I believe that the United States should examine all forms of natural gas in order to ease our dependence on coal and foreign oil," said Mitchell upon receiving the award. "It is my hope that my efforts will aid the search for new and unconventional energy sources that can be used by my 23 grandchildren and four great-grandchildren."

Founder of Mitchell Energy & Development Corp., Mitchell was recognized for pioneering hydraulic fracturing and drilling technologies in the 1980s in the Fort Worth Basin, home of the Barnett shale. These advances have since enabled the shale-gas revolution that has swept the U.S., and soon, the rest of the world.

This Renaissance man is the perfect embodiment of the American Dream. Born in Galves­ton in 1919 of Greek immigrants, he bused tables to work his way through A&M. Today, perennially on Forbes' list of the wealthiest Americans, he is well known for his philanthropy in the Texas medical community and at A&M; for rejuvenating his hometown, Galves­ton, through historic preservation and economic development; and for his utopian vision in developing The Woodlands, a master-planned new town north of Houston that he began in the early 1970s. Today it is home to more than 92,000 people.

A petroleum engineer with geology training from A&M, class of 1940, Mitchell believed natural gas could be extracted from shale when no one else did. "Not wanting his oil wells to go to waste in the event of flow shortages, Mitchell had his employees drill into an area known as the Barnett shale for hydrocarbons," said the GTI when giving him the award. "Despite the cautioning of his engineers that the endeavor could prove futile, Mitchell gave the order to fracture the rock.

"The company invested in more than 30 wells to test different processes of hydraulic fracturing, with some wells' production barely even covering the cost of operation. Yet Mitchell remained steadfast, continuing to analyze test results that yielded the greatest return, and eventually completed the first successful instance of using hydraulic fracturing to drill into shale for natural gas.

"The results were staggering—many experts believe the Barnett shale may be the largest onshore natural gas field in the United States, containing more than an estimated 26 trillion cubic feet of natural gas."

Devon Energy Corp. acquired Mitchell Energy in 2002 for $3.1 billion, adding horizontal drilling and other innovations to make fracture-stimulated wells produce even more from the Barnett shale. Mitchell is its largest shareholder and Todd represents him on the board. Today, Mitchell's legacy has grown to give Devon some 18 trillion cubic feet equivalent of net risked potential and more than 6,000 drilling locations in this shale alone.

Oil and Gas Investor met with Mitchell in his award-laden office in Houston.

Investor: How do you react when people say you are the father of the shales?

Mitchell: Well, I did so much work on it, now they blame me for it. When I started in the '80s, the price of natural gas was $10 or $11 a thousand—in those days it was price-controlled by the government. Then they decontrolled it and prices fell all the way back to $3.50 or $4, so people blamed me for that. They said we found a big supply of gas. I said, that's too bad, but it's good for the country. Now, 25 years later, the price is still below $4.

More gas demand is going to help lower oil demand too. It'll take over some of the things oil is used for now. There's enough gas in the U.S. for the next 50 or 100 years. We probably have 2 or 3 Tcf of extra gas above demand, so we need to get going on building demand. Four dollars is just about your cost of horizontal drilling, so we've got to build up demand, take away from oil, and see if we can't get the price back up, and help the oil-import situation.

Investor: How do you think we should do that?

Mitchell: There is a lot going on now. I think the Pickens Plan idea to get major trucking companies to use gas is a good idea. The gas supply committees and the Department of Energy ought to be working hard to use these shale-gas supplies wherever we can. Electric power generation with oil is very expensive. You could use more shale gas.

Investor: Ever ride in a natural gas vehicle?

Mitchell: Yes, I have. It works very well. There's no doubt about the technology. We just need refueling places along the super-highways.

Investor: Why were you so persistent about the Barnett shale? Was it a hunch? Did you really need that gas?

Mitchell: It became clear to me that the source of gas in the Fort Worth Basin and through the Bend Arch, and even in the Caddo area, was from the Barnett. It came up through the faults and fractures. You could see it on seismic. You could see it on small gas shows when we'd penetrate the Barnett shale on the way to the Ellenburger.

My geologists who examined the cores told me, "You're wasting your money, Mitchell, trying to make that work. There is no porosity." It took us from about 1989 to 1991 to experiment with several wells and different ways to frac them.

All the people who used to work for me, who told me we couldn't drill the Barnett shale, now they have their own companies drilling for shale. This is a real boom. The companies from Europe, from China, they're all coming over here.

Horizontal drilling has really made a big difference. In the Barnett alone Devon has enough acreage to drill 500 wells a year for 10 years.

Investor: What do you think about Devon exiting the Gulf of Mexico?

Mitchell: Before the blowout, Devon came to the conclusion to get out of the Gulf. They had made a discovery at the Kaskida block, but those are tough wells to drill. You have to drill an appraisal well to get SEC confirmation of the reserves. But what should have been a $100-million well cost much more than that, and it scared the hell out of them. They had 21 good prospects next to BP's blocks so they made a deal with BP. It also included Devon's assets offshore Brazil. I tried to get Devon to keep a 50% interest in those Gulf blocks, and let BP drill them, prove up the reserves. But Devon wants to concentrate on big shale projects. They've got plenty to do.

If this Macondo accident had happened to Devon, their stock probably would have gone to zero. It'd be worthless. You have to be big to withstand that.

BP can survive this, but it has a big fight on its hands, and so does Anadarko. If I was a younger man, I'd get right in the middle of it! It'd be better than being an oil and gas man!

Investor: But seriously, if you were 40 again, which would you rather do: oil and gas, or community development like The Woodlands?

Mitchell: My main background is oil and gas. I am a petroleum engineer and geologist.

Investor: You are interested in many other things besides oil and gas.

Mitchell: One of the most important things I'm still working on is sustainability. I learned about it in the '70s from Buckminster Fuller. He said if you can't make things work for 6 billion people now, how are you going to make them work when we have 9 billion by 2050? How do you make the world work for your grandchildren? All the nations have to realize what's going on and you have to get the young people involved.

Investor: What are your ideas?

Mitchell: You set up programs at all the universities. Stanford has done some action on it; the University of Texas has; Virginia has. But are they really working on it, or is it just a bunch of papers? What made me angry was that none of the Southwest Conference universities were working on sustainability.

Investor: Why so interested in physics?

Mitchell: In 2002, my friend Peter McIntyre, an A&M physicist, took me to California to meet Stephen Hawking (the widely known physicist who wrote A Brief History of Time). I told him I wanted to bring him to A&M and form collaborations between A&M and Cambridge University, where he worked. I wanted to help improve A&M's image, and we are working on joint arrangements. He's coming back to A&M next spring.

Investor: You are still drilling wells?

Mitchell: My son Todd has an E&P company. He bought some Marcellus acreage and drilled a few wells, then sold it and made some good money. Pennsylvania is a real eye-opener. I think half the state is going to be productive.

Investor: What's the best advice you ever got?

Mitchell: My old A&M professor told me if you go to work for a major company, you'll drive a nice Chevrolet, but if you go independent, you might end up with a Cadillac. Just turn loose. That was very good advice.

Investor: And your advice to us today?

Mitchell: If we really clean up the water, we can do the job of producing oil and gas safely. If we don't do the job right, then the environmentalists should give us hell. We can do it.