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