Colorado's green(ish) gas baron

  • Ed Warner

    CSU Photography
 

When the sun gets in Ed Warner’s eyes, he turns his chair – and his whole desk, too. Set into the floor in the middle of his home office, a giant turntable from an old mine quarry rotates the entire workspace, including a 7-foot-high  wooden cabinet wall. The ingenious setup has appeared in Architectural Digest, and it’s one of many things about Warner’s “urban villa” home in the Cherry Creek neighborhood of Denver that suggest his unusual mind and staggering wealth.

Warner first identified the abundant natural gas reserves of the Jonah and Pinedale fields in Wyoming in the late 1990s, and he and his partners opened the tight-sands formations for development by pioneering new approaches to hydraulic fracturing, or fracking. The breakthroughs boosted natural gas production in the West and the entire world, and made Warner a multimillionaire.

The former geology grunt has since dedicated himself to philanthropy, notably giving $30 million to his alma mater, Colorado State University, in 2005; its natural resources college now carries his name. He also cofounded Regenesis Management Group, a Denver-based consulting company that facilitates water transfers between farmers and cities to benefit agriculture and the environment.

Warner, in his mid-60s, is short, with cool blue eyes, and he often punctuates his stream of words with a ripple of booming chuckles. Originally from New York and the son of parents with Jewish and Italian roots, he jokes that Woody Allen movies so closely resembled his childhood, they made him break out in hives. Trips to the Adirondack Mountains sparked his love for wilderness, and inspired him to head west in 1964 to study geology at CSU. Outspoken and iconoclastic, a self-proclaimed libertarian and environmentalist, Warner didn’t hold back when he spoke with High Country News contributor Joshua Zaffos. “If people perceive you as an eccentric,” he says, “you can get away with stuff that normal people can't.” The following interview has been condensed and edited.

High Country News: Your work in Wyoming’s Jonah Field ultimately spurred a nationwide natural gas boom. How did that happen?

Ed Warner: In December ’91 or January ’92, the McMurrys (a Casper-based family company) approached me and said we want you to evaluate a big gas deal. (Warner was then an independent geologist after years of working for large energy companies.) I saw huge potential, not proven by any stretch, because three wells drilled over 10 years had been failures. We bought Jonah (federal leasing rights) for a quarter of a million dollars.  I showed my ideas to 27 (financial) companies and we got turned down 27 times. There are guys out there today who will tell you it was the worst business decision of their career.

Once we figured out Jonah, we realized Pinedale (an adjacent field) would be subject to the same engineering and geology analysis, so we started buying acreage over there. Combined (with Jonah), it’s estimated to be 50 trillion cubic feet of gas.

HCN: You and your partners are credited with helping to stimulate the widespread use of hydraulic fracturing.

Warner: Prior to Jonah, natural gas fields virtually worldwide were drilled one to four wells maximum per square mile. We revolutionized how gas is extracted from the ground -- what we call the completion technology -- over a period of three or four years (giving drillers greater access to gas formations). Now, there are 64 wells per square mile in Jonah and Pinedale. Instead of drilling vertical wells through thousands and thousands of feet of a gas play, they now drill horizontal wells through thin sheets (using fracking). We changed the world.

HCN: When did you come into your wealth?

Warner: In 1996, we brought in an industrial partner to buy us out of debt and then they put up $30 million to drill. We drilled 30 wells when gas prices were rising, and income went up twentyfold.

By the beginning of 1998, I foresaw my entire financial future. It was April, and I came home and sat (my wife) Jackie down and said, ”Honey, our lives are about to change. In the coming months and next few years, our income is going to explode. We're rich.” I never expected this to happen.

In 2000, I sold my working interests, and came into a big chunk of money, and by then I realized I wanted to work in conservation and environmental issues.

HCN: Why did you dive into philanthropy, including your endowment to Colorado State?

Warner: I owed society this gift that had been delivered to me, so I went back to the geology department at CSU (by then part of the natural resources college), which had changed my life, and said, “How can I help?” I did not walk in there and say, “I’m going to give you $30 million, I want my name on a college.”

In 2000, I decided to endow two chairs in geology. There had been three (endowed) chairs (at CSU) before my two. Today, there are 35 or 40.

By 2005, I was already thinking about how we had failed to solve problems through the environmental movement. I thought that top-down (regulatory) environmentalism did not seem to succeed. Secondly, litigation was a catastrophe -- suing people to do the right thing hurt the environment; it stopped people from doing things. A cooperative process was harder work, but in the long term brought people together to work on problems instead of making them enemies. Thus I came up with the idea to fund the Center for Collaborative Conservation (which supports local and international community-based research and conservation projects involving both scientists and land-users).

I sat down with (then CSU president) Larry Penley and said, “I’m thinking about doing this and it looks like $8 million.” And he said, “What we really would like to do is up the total gift you’ve made to $30 million, including the center.” There were several other key things: a fund for the dean to create mini-grants, and an endowment to geosciences -- with the caveat that everyone in the department had to get something.

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Oil and gas companies pour money into research universities
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