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An American Story

by Jay Nordlinger

The rise of Harold Hamm, Algeresque oilman

Oklahoma City, Okla. — Harold Hamm is a major oilman, the biggest in the United States. He’s also a significant contributor to our national debate over energy policy. But beyond those things, he’s an amazing story. Horatio Alger would blush to include him in one of his novels. Hamm was born the 13th and last child of sharecroppers in Oklahoma. Today, according to Forbes magazine, he’s the 90th-richest person in the world. (Remember, there are more than 7 billion of us.) Even foes of oil, and of capitalism generally, must smile a little, if only inwardly.

Hamm is the chairman and CEO of Continental Resources, a company that evolved from one he started in 1967. Continental is now in 20 states, and on the New York Stock Exchange. Hamm is an Oklahoman through and through, and his company is based here in Oklahoma City. Yet he is probably best known as the major player in North Dakota — a state that has experienced an oil boom for the last few years. With Montana and a couple of Canadian provinces, North Dakota is home to the Bakken formation, a fount of oil. In a conversation with me, Hamm says that a particular section of the Bakken “turned out to be a very, very nice field.”

He says this quietly, almost offhandedly. And this statement is indicative of Hamm’s personality (insofar as a personality can be assessed in an afternoon’s conversation). He is understated, soft-spoken, unflamboyant. Anyone expecting or hoping for a swaggering oilman is likely to be disappointed. Hamm is bookish and somewhat shy. He’s a bit of a science geek, with a love of geology. He enjoys showing the rocks and fossils he has collected. I ask Hamm’s daughter Shelly, “Did you ever think your dad would get so big?” She says, incredulously, “No! No, no.” Hamm, again according to Forbes, is worth about $12.4 billion. That makes him No. 33 in America.

I meet him, and his daughter as well, in his office. He moved the company to Oklahoma City from Enid last year. (Enid is 100 miles to the northwest.) Behind Hamm is a picture taken in Tel Aviv — showing him with Benjamin Netanyahu, the prime minister of Israel. “He’s a great leader,” says Hamm. Early in our conversation, I ask him, “Did your parents live to see your big success?” “When you say ‘big success’ — any success was big for them.” His mother died while he was in high school; his father did live to see him get established in business.

Hamm was born outside Lexington, in central Oklahoma, in 1945. (He will be 68 in December.) His parents never owned land or a home. They picked cotton and did other farm work. So did their children. “We went wherever the cotton was good,” says Hamm. The harvest could have been in Blair, Okla., or Littlefield, Texas. “Usually, whoever you were pulling cotton for had some kind of housing. Some folks lived in tents. We’d pull cotton till Christmas or the first snow, and then we were out of there.” The Hamm family would return home, and the kids would start school (very late, of course). Did Hamm like it? School, that is? Yes: “It was a lot easier than pulling cotton.”

When he was 17, the family moved to Enid — this was a new environment, oil country. At Enid High, he was part of a distributive-education program, which meant you got credit for working. Hamm worked 50 or 60 hours a week at a truck stop, the Potter Oil Company. He’d go to school until 1:30, run home and grab a bite to eat, then go work until 11. Then he would study, into the early morning. He would also work on Saturday and Sunday.

There is a story he has often told, and he tells it to me: One morning, he dragged himself to homeroom, then to a school assembly. The speaker was John Frank, an artist from Sapulpa, Okla. There on the stage, he demonstrated pottery, and he had some watercolors on easels. He spoke of his love of art. And he said, “You’ve got to find your passion in life. Figure out what you care about, what you’re most passionate about, and pursue it.” Sitting there, young Hamm thought, “Well, what have I got to be passionate about? Pumping gas, washing windshields, fixing tires?” That’s what he was doing at the truck stop. But there was something — something to be passionate about: oil exploration. Enid was booming, and there were larger-than-life oil types around. Hamm wanted to be involved in that world. Indeed, he wanted to be an explorationist.

For “D.E. class” (distributive education), he wrote a paper on oil and its leading figures. He shows it to me, here in his office. It’s nicely typed and replete with illustrations. He wrote about J. Paul Getty, Harry Sinclair, E. W. Marland, Bill Skelly, H. H. Champlin, Frank Phillips — the largest of the larger-than-life figures. Hamm was interested in the following: How did these guys find this ancient wealth, i.e., oil? How did they land the big fields? What talent, or edge, or know-how did they have? These were men who had not only done well for themselves: They built up the state of Oklahoma, through their businesses and their philanthropy. Young Hamm thought, “I’m gonna do that.” It may have been an audacious thought for the 13th, or any, child of sharecroppers. But Hamm tells me he never felt trapped by his circumstances, never felt that he could not break out and succeed.

He wrote his paper under a teacher named Jewell Ridge, a pioneer in vocational and technical education in Oklahoma. He had been in the war, one of those dropped behind enemy lines. In other words, he had uncommon mettle. “He was one tough dude,” says Hamm, “but he was also as good as gold.” Hamm delivered a eulogy at his teacher’s funeral. His eyes brim over as he recollects the teacher, and what he meant to an eager student.

After graduating from high school, Hamm went to work in the oil business, gaining a “toehold,” as he says. Before long, he had his own company, the Harold Hamm Tank Truck Service. (“Real innovative,” he says of the name.) His old boss at the truck stop, Charles Potter, signed a note for him at the bank — $1,000. “That was enough for me to operate on,” says Hamm. The only equipment he had was a bobtail Ford truck, a vehicle that is at the center of Harold Hamm lore. In 1967, he started the Shelly Dean Oil Company (named after his first two daughters). This is the enterprise that grew into Continental Resources.

Hamm looked for oil, reading everything he could, learning everything he could, stretching his imagination as far as he could. Another part of the lore is that he hit a “gusher” on his second well. (I suspect that “gusher” is a term used only by non–oil people, not oil people. Hamm confirms that this is so. Oil people are apt to refer to a “flowing” well.) Hamm says that this is true, about the second well. But he makes clear, without any immodesty, that the first one wasn’t exactly a loser. It delivered 20 barrels an hour, and “that wasn’t bad on your first shot.” The second one came in at 75 barrels an hour — and “that puts you home quick.”

The “beauty part” of this success, says Hamm, is that, suddenly, he could afford to take a breath. “So I did. I took a breath and went to college.” At this point, Hamm was in his late 20s. He has been known to say he did things in the reverse order: fortune first, college second. He went to Phillips University, in Enid. (The university, which closed in 1998, was not associated with Phillips Petroleum. It was an institution of the Disciples of Christ church.) “I did not go for a degree,” says Hamm. Instead, he took some courses in order to improve his “skill set.” He studied petroleum geology, dear to his heart, and important to his career, but also literature and other subjects he was drawn to.

Later on in life came the Bakken. (The name of this formation is pronounced to rhyme with “rockin’,” by the way. They have a bumper sticker up there: “Rockin’ the Bakken.”) The Bakken was “a real tough nut to crack,” as Hamm says. People had been trying to crack it since 1951, when the oil was discovered. Hamm has been in the Bakken since about 1988. Many people have heard of hydraulic fracturing, or “fracking” — the technique by which oil or natural gas is forced from rock. Erle P. Halliburton, another Oklahoma oilman, performed the first frack jobs in the late 1940s. Fracking has certainly played a role in the Bakken, as elsewhere. But the big thing, says Hamm, is a much newer technique: horizontal drilling. “It turned everything around. It’s what made possible the renaissance we’re having today.”

Like almost everybody, Hamm and Continental absorbed blows in 2008, when the recession hit. But the company, thanks to planning, was more resilient than others. And Continental soon had phenomenal growth: 85 percent from December 2010 to May 2012.

The oil business is the most demonized in America, or one of them. Hamm has thought long and hard about this. It could have to do with the early wildcatters and “Joe Roughneck,” he says. I counter, “But aren’t those things kind of romantic?” They should be, says Hamm, but they aren’t to all. Also, he continues, “there’s always one bad operator who fouls things up for the whole industry.” On balance, he says, oil is a clean and safe industry, in addition to an exceptionally helpful one. (People depend on oil more than they know. It’s in their cars and planes, of course. But the list of petroleum products is long and varied. Petroleum is a component of sneakers, lipstick, balloons — even the wind turbines so beloved of the environmentalist Left.)

I bring up a popular show from the 1980s: Dallas, the nighttime soap. It was a story of Texas oilmen. Was it realistic? “Not at all,” says Hamm. “It was the biggest piece of unreal garbage.” And it set the industry back, he says. People thought of oilmen as endlessly conniving and rapacious. He allows that the show was entertaining, though. Last year, there was a Matt Damon movie, Promised Land, whose purpose was to scarify fracking. Hamm notes with satisfaction that the movie flopped. “Eventually, the American people get the story straight.” They can’t be fooled for long, he says.

Hamm is a staunch advocate of energy independence for this country. He points out that the 40th anniversary of the OPEC embargo is upon us. In his view, America has been “held hostage” to Middle Eastern oil, and energy independence will free us in a number of ways. It will give us more options in foreign policy, he says. He believes that American boys have been dying for oil. Hamm is the co-chairman of a group called the Council for a Secure America, which aims at energy independence. It was on the council’s business that he was in Tel Aviv, when the photo with Netanyahu was taken.

A question: Is energy independence possible under the current regulatory regime — without the Keystone pipeline, without a loosening? Yes, says Hamm. Even under present regulations, we can “get there.” But if the regulations get tighter, “it’s going to be tough.” Hamm says that the feds “keep trying to impose things that would basically shut us down.” Well, if regulations get no worse, when can we expect energy independence? By 2020, Hamm figures. And it won’t be windmills and their kin that achieve that independence: It will be oil and natural gas.

This phenomenon is highly interesting, to some of us. Oil is supposed to be old news, yesterday’s energy. But it’s the hot new thing, spurring job creation and economic growth (such as we have them). Consider North Dakota alone: It has the lowest unemployment rate in America, and the fastest rate of economic growth. There are people in North Dakota from all 50 states, and many of them hadn’t worked for years, before the oil-and-gas “renaissance” arrived. The United States has just overtaken Russia and Saudi Arabia as the top oil and natural-gas producer in the world.

I ask Hamm to tell a story he told to Stephen Moore of the Wall Street Journal two years ago. It concerns a meeting with President Obama in the White House. Hamm told the president about the renaissance, and the prospect of American independence. He wanted to be sure the president knew about this. Obama replied that we would have to rely on fossil fuels for the next few years — but he had been assured by the secretary of energy, Steven Chu, that we would have a battery capable of powering our cars brilliantly. We would have it in five years. (The president held his hand up, showing the number five.) I ask Hamm, “How are we doing? Has it been five years?” No, not yet: Hamm talked with the president in March 2011. It was a depressing, incredible conversation for Hamm. The next year, he supported Mitt Romney for president. Indeed, he became chief energy adviser to Romney. And he gave almost a million dollars to a pro-Romney PAC.

Hamm’s parents were Democrats, as most Oklahomans were. But he himself registered as a Republican. Then he switched to being a Democrat, when state politics led him in that direction. Finally, he switched back to Republican — “because of Washington, D.C., because of national politics.” I ask whether he regrets helping Romney, given the election results. “Oh, no. No.” He admires Romney and says, “He was a better candidate than we deserved” — “we” meaning the country. “It’s a shame he couldn’t get there,” he continues. “Some things just go against you.” He cites Hurricane Sandy, which battered New Jersey in the days before the election and gave Obama a chance to look healingly presidential. (On Election Night, an MSNBC host said, “I’m so glad we had that storm.”)

It bothers Hamm not at all that Romney was born rich — some people are, most people aren’t, and what matters is what you do with what you have. I ask Hamm a slightly odd question: What’s it like to be rich? Are there burdens as well as pleasures? In his answer, Hamm talks mainly about the Vietnam War.

“I grew up in the Vietnam age, early on in it. There weren’t a whole lot of people going over there, but when I registered in ’64, I knew I was going. But I wound up not going. When they weren’t taking married people, I was married. When they weren’t taking people with a kid, I had a kid. And so on. I didn’t go join the guards to get out of going to Vietnam. I just didn’t go. And a whole lot of people went and died. In the Ringwood-Ames area, where I lived at the time, they lost nine boys. Good kids. We knew them all. Anyway, for the people who are left, there’s a responsibility to carry on and do the right stuff. We’re blessed. We didn’t die. We didn’t go over there and fight a war. So we have a great responsibility to contribute in whatever ways we can.”

Hamm is a believer in giving away your money while you’re alive, so that you can see what happens with it. “A lot of people wait till they die, and they don’t get to see anything.” One of Hamm’s causes is diabetes (he was diagnosed with the disease in 2000). At the University of Oklahoma, there is a Harold Hamm Diabetes Center. Another cause is education. He talks about the “cycle of poverty” and how to break it. “I saw it personally. A lot of families just get into it and are never able to get out of it, those poverty conditions. It continues generation after generation.” He feels sure that education is a ticket out of poverty.

One problem, he has found, is that people aren’t able to travel from rural areas to go to college, owing to restrictions or responsibilities at home. College is out of reach both financially and physically. So he has made it easier for people to study where they are. He was involved in setting up a two-year college and a four-year college in Enid: branches of Northern Oklahoma College and Northwestern Oklahoma State University. These institutions have made the hoped-for difference, he says.

Hamm is part of the Giving Pledge, a project spearheaded by Bill Gates and Warren Buffett, the richest people in America. It was with these givers that he was at the White House, meeting Obama. When you take the pledge — congratulations, you’re a billionaire — you promise to devote more than half your wealth to philanthropy. I can’t help telling Hamm that I disagree with his friend Buffett about the estate tax. The Sage of Omaha (Buffett) is a great fan of this tax. He is not such a fan of bequeathing an estate to one’s children. Hamm laughs and says, “We all disagree with him on that!” The estate tax was especially disgraceful, he says, before recent reforms: when it caused relatively humble family farms to go under.

Hamm himself has five children, from two marriages. (He is in the process of a divorce right now. The prospect of the most expensive divorce settlement in U.S. history is titillating some in the media.) Several years ago in Washington, D.C., Hamm’s friend Bert Mackie, an Enid banker, introduced him to David Rockefeller. Mackie explained to Rockefeller that Hamm was in the oil-and-gas business. Rockefeller said, “Our family has done pretty well by it.” Like the original Rockefeller, Hamm has enabled a good number of other people to get rich (certainly richer). This is an effect of entrepreneurship. In North Dakota, there are many people who were once modestly off, if not downright poor, who are now millionaires — because they had land rights, for example, or, even better, mineral rights. Does Hamm get a kick out of helping other people get rich? Yes, he says. But he also notes a human tendency: “There are some who forget pretty quick who helped them . . .”

A terrible question sits on many minds today, especially Republican minds: Is the country going down the tubes? Hamm says yes and no. We will not go down the tubes “if we have real leadership, in all the places we need it.” It is urgently needed in the Oval Office, he says. People like to blame Congress for budgetary impasses and other problems. But we could use a strong dose of executive leadership, says Hamm. “I wasn’t the biggest fan of Bill Clinton, but Bill knew when to go to the middle of the road and make things happen, get things done.” Moreover, Hamm fears that we’re on a path to the sort of populism that has blighted South America. Then there’s the question of foreign wars. “In the paper this morning,” says Hamm, “there’s a report about a boy from Edmond, Oklahoma, who was killed. That boy’s life is worth so much more than everything they’ve got going on over there,” in Afghanistan. “We’ve gotten numb to it all. We hear about 15 killed, 20, and we’re just numb.”

For all his concerns, Hamm is essentially an American optimist. “This country is so good,” he says. “We have so many positive things going on here.” He believes that there are still opportunities, still openings for entrepreneurs, for dreamers, for those willing to work and dare. Government may get in their way, more than it has in the past. But they can work around it. He quotes an old Enid oilman, Jack Hodgden: “There are more deals than there are people.” There are more opportunities to be had than there are people stepping up and taking them.

Leaving Oklahoma City, I feel a little buoyed. Not every sharecropper’s son can make the Forbes list (global or national). Not every poor kid can make Horatio Alger blush. But it would take a transformation more fundamental than anything we’ve seen to squeeze the life out of America.

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