Lets transform energy with natural gas T. Boone Pickens
I’m a believer I’m a believer in global
warming and my record is good on the
subject but my subject is national
security we have to get off of oil
purchase from the enemy I’m talking
about OPEC oil and let me take you back
a hundred years to 1912 you’re probably
thinking that was my birth year it
wasn’t it was nineteen twenty-eight but
go back to nineteen twelve hundred years
ago and look at that point what we our
country was faced with it’s the same
energy question that you’re looking at
today but it’s different sources of fuel
a hundred years ago we were looking at
Cole of course and we were looking at
play loyal and we were looking at crude
oil at that point we were looking for a
fuel that was cleaner it was cheaper and
it wasn’t ours though it was theirs so
at that point 1912 we selected crude oil
over whale oil and some more cold but as
we moved on to the period now 100 years
later we’re back really at another
decision point what is the decision
point it’s what we’re going to use in
the future so from here it’s pretty
clear to me we would prefer to have
cleaner cheaper domestic hours and we
have that we have that which is natural
gas so here you are that the cost of all
this to the world is 89 million barrels
of oil give or take a few barrels every
day and the costs annually is three
trillion dollars and
1,000,000,000,000 of that goes to OPEC
that has got to be stopped now if you
look at the cost of OPEC it cost seven
trillion dollars on the Milken Institute
study last year 7 trillion dollars since
1976 is what we’ve paid for oil from
OPEC now that includes the cost of
military and the cost of the fuel boat
but it’s the greatest transfer of wealth
the greatest transfer wealth from one
group to another in the history of
mankind and it continues now when you
look at where is the transfer of wealth
you can see here that we have the era’s
going into the Mideast and away from us
and with that we have found ourselves to
be the world’s policeman we are policing
the world and how are we doing that
there I I know the response to this i
would bet there are ten percent of you
in the room that know how many aircraft
carriers there are in the world raise
your hand if you think you know they’re
12 one is under construction by the
Chinese and the other 11 belong to us
why do we have 11 aircraft carriers do
we have a corner on the market are we
smarter than anybody else I’m not sure
if you look at where they’re located and
on this slide it’s the red blobs on
their their five that are operating in
the Mideast and the rest of them are in
the United States they just moved back
to the Mideast and those come back so
it’s actually the most of the 11 we have
are tied up in the Mideast why why are
they in the Mideast they’re there to
control keep the shipping lanes open and
make oil available in the United States
uses about 20 million barrels a day
which is about twenty-five percent of
all the oil
used every day in the world and we’re
doing it with four percent of the
population somehow that doesn’t seem
right that’s not sustainable so where do
we go from here does that continue yes
it’s going to continue the slide you’re
looking at here is 1992 2040 over that
period you are going to double your
demand and when you look at what we’re
using the oil for seventy percent of it
is used for transportation fuel so when
somebody says let’s go more nuclear
let’s go wind let’s go solar fine I’m
for anything American anything American
but if you’re going to do anything about
the dependency on foreign oil you have
to address transportation so here we are
using 20 million barrels a day producing
eight importing 12 and from the 12 5
comes from the comes from OPEC when you
look at the biggest user the second
largest user we use 20 million barrels
and the Chinese use 10 the Chinese have
a little bit better plan or they have a
plan we have no plan in the history of
America we’ve never had an energy plan
we don’t even realize the resources that
we have available to us if you take the
last 10 years and bring forward you
transferred to OPEC a trillion dollars
if you go forward the next 10 years and
kept the price of oil at a hundred
dollars a barrel you will pay two point
two trillion that’s not sustainable
either but today’s of cheap oil are over
there over that they they make it very
clear to you the Saudis do they have to
have ninety four dollars a barrel to
make their social commitments now I have
people that have people in Washington
last week told me said the Saudis can
produce the all four five dollar sparrow
that has nothing to do with it it’s what
they have to pay for is what we are
going to pay for all there is no free
market for oil they’ll all is priced off
the margin and the OPEC nations are the
ones that pricey so where are we headed
from here we’re headed to natural gas
natural gas will do everything we want
it to do it’s a hundred and thirty
octane fuel its twenty five percent
cleaner than oil it’s ours we have an
abundance of it and it does not require
refinery it comes out of the ground at
130 octane run it to the separator and
you’re ready to use it it’s going to be
very simple for us to use it’s going to
be simple to accomplish this you’re
going to find and i’ll tell you in just
a minute what you’re looking for to make
it happen but here you can look at the
list natural gas will fit all of those
it will replace or be able to be used
for that it’s for power generation
transportation speaking fuel it’s
although do we have enough natural gas
look at the bar on the left is 24
trillion is what we use a year and go
forward and the estimates that you have
from the EIA and on to the industry
estimates the industry knows what
they’re talking about we’ve got four
thousand trillion cubic feet of natural
gas that’s available to us how does that
translate to barrels of oil equivalent
it would be three times what the Saudis
claim they have and they claim they have
250 billion barrels off which I do not
believe I think it’s probably a hundred
and seventy five billion barrels but
anyway whether they say they’re right or
whatever we have plenty of natural gas
so I have tried to target on where we
use the natural gas and where I’ve
targeted is on the heavy-duty trucks
there are eight million of them you take
eight million trucks in you know these
are 18 wheelers and take them to natural
gas reduce carbon by thirty percent it
is cheaper and it will cut our imports
three million barrels so you will cut
sixty percent off of OPEC with eight
million trucks there are 250 million
vehicles in America so what you have is
natural gas is the bridge fuel is the
way I see it I don’t have to worry about
the bridge to wear at my age that’s your
concern but when you look at the natural
gas we have it could very well be the
bridge to natural gas because you have
plenty of natural gas but as I said I’m
for anything American now let me take
you I’ve been a realist i went from
theorists early to realist i’m back the
theorists again if you look at the world
you have methane hydrates in the ocean
around every continent and here you can
see methane if that’s the way you’re
going to go that there’s plenty of
methane natural gas is methane natural
gas are interchangeable but if you
decide that you’re going to use the
methane now I’m gone so it’s up to you
but we do have plenty of methane
hydrates so I think I’ve made my point
that that we have to get on our own
resources in America if we do we can cut
out we’re it’s costing us a billion
dollars a day for oil and it we have no
energy plan so there’s there’s nothing
going on that that impresses me in
Washington on that plan other than I’m
trying to focus on that eight million
18-wheelers if we could do that I think
we would take our first step to an
energy plan if we did we could see that
our own resources are easier to use and
anybody can imagine thank you
thank you thanks for that so can be open
with you you had this great you know
Pickens plan that was based on wind
energy and you abandoned it basically
because the economics changed what
happened I lost 150 million dollars
that’ll make and that was a man in so
they know what happened to his chris is
it that power is it’s it’s priced off
the margin and so the margin is natural
gas and at the time i went into the wind
business natural gas was nine dollars
today it’s two dollars and forty cents
you cannot do a wind deal under six
dollars and mcf so what happened was
that we through increased ability to use
fracking technology the calculated
reserves of natural gas kind of exploded
and the price plummeted which which made
wind and uncompetitive in a nutshell
that’s what happened that’s that’s what
happened we found out that we could go
to the source rock which were the
carboniferous shales in the basin’s
first one is barnett shale and texas and
then the Marcellus up in the northeast
across New York Pennsylvania West
Virginia haynesville and Louisiana this
stuff is everywhere we are overwhelmed
with natural gas and now you’re a big
investor in in that in bringing that to
my well you say a big investor it’s my
life I’m a geologist got out school in
51 and I’ve been in the industry my
entire life now i do have own stocks
that i’m not a big natural gas producer
somebody the other day said i was second
largest natural gas producer in the
united states don’t I wish but no I’m
not I own stocks but I also AM in the
fueling business but natural gas is a
fossil fuel you burn it you release co2
so you said you believed in the threat
of climate change why doesn’t that
prospect concern you well you’re going
to have to use something
what do you have to replace it well the
issue yeah no no the argument that it’s
a bridge fuel makes sense because the
the amount of co2 per unit of energy is
lower than oil and coal correct and so
everyone can be at least happy to see a
shift from coal or oil to natural gas
but but if that if that’s it and and
that becomes the reason that renewables
don’t get invested in then long-term was
screwed anyway right well I’m not ready
to give up Jim and I talked ther is as
he left and and I said how do you feel
about natural gas and he said well it’s
a bridge fuel is what it is and I said
bridge to what where are we headed see
but again I told you I don’t have to
worry with that you won’t I don’t think
that’s right then i think i think you
you’re a person who believes in your
legacy you’ve you’ve made the money you
need you’re one of the few people in a
position to really swing the debate I
mean do you support the idea of some
kind of carbon some kind of price on
carbon does that make sense I don’t like
that because it ends up the government
is going to run the program and i can
tell you it’ll be a failure the
government is not successful on on these
on these things they just started I mean
there it’s a bad deal look at that’s
what cilinder or whatever it was I mean
that was told to be a bad idea ten times
they went ahead and did it anyway and
that but then only blew out 500 million
i think it’s closer to a beating but but
Chris I think where we headed I mean the
long term I don’t mind going back to
nuclear and I can tell you what the last
page of the report that will take them 5
years to write will be 1 don’t build a
reformer on a fault
at number 12 do not build a reformer on
the ocean and now I think reformers are
safe move them inland and on very stable
you know ground and build the Reformers
there anything wrong with you you’re
going to have to have energy there is no
question you can’t okay so one of the
questions from the audience’s is with
with fracking in the natural gas process
what about the problem of methane
leaking from that methane being a worse
global warming gas than co2 does that is
that a concern fracking yeah what is
Frankie fracking I’m teasing we’ve got a
little bit of accent incompatibility
here you know let me tell you I told you
what my age wise i got our school 51 I
witnessed my first frack job at Borger
Texas in 1953 fracking came out in 47
and don’t believe for a minute when when
our president gets up there and says a
Department of Energy 30 years ago
developed fracking I don’t know what any
hell he’s talking about I mean seriously
the apartment energy did not have
anything to do with fracking it was the
first track job is in 40 said my saw my
first 153 I pract over 3000 wells in my
life never had a problem with messing up
an aquifer or anything else now the
largest aquifer in North America is from
Midland Texas to the South Dakota border
across eight states big aquifer Ogallala
Triassic age I there been a eight
hundred thousand wells frack in Oklahoma
Texas Kansas in that aquifer either
there’s no problems I don’t understand
why the media is focused on eastern
Pennsylvania alright so you don’t
support a carbon tax of any kind or a
price on carbon your picture that I
guess as how the world eventually gets
off fossil fuels is through through
innovation ultimate
to that will someday make solar and
nuclear well sold us competitive solar
and wind Jim and I agreed on that in 13
seconds that is going to be a small part
because you can’t rely on it so how how
does the book at off how to kill you’re
going to use we have so much natural gas
a day will not come where you say well
let’s don’t use that anymore you’ll keep
using it it is the cleanest of all and
if you look at California they use 2500
buses la MTA have been on natural gas
for 25 years the Fort Worth tea has been
on for 25 years why air quality was the
reason they use natural gas and got away
from diesel why are all the trash trucks
today in Southern California on natural
gas is because the air quality I know
what you’re telling me and I’m not
disagreeing with my on the hell can we
get off the natural gas at some point
and I say that is your problem
alright so it’s the bridge fuel what is
that the other end of that bridge is for
this audience that you’re out if someone
comes to you with the plan that really
looks like it might be part of the
solution are you ready to invest in
those technologies even if they aren’t
maximize profits they might be maximized
for the future health of the planet I
lost 150 million on the wind okay yeah
sure I’m game for it because I you know
again I’m trying to get energy solved
for America and it anything American
will work for me but I really really
appreciate you coming here engaging in
this conversation I think there’s a lot
of people want to engage with you and
that that was a real gift you gave this
audience thank you so much you bet thank
you