thoughtleaders T. BOONE PICKENS
AI’ve talked to Romney, and I’ve talked to Obama. Obama has
talked about a 100-year supply of
natural gas. But I haven’t seen anything come out as a plan. I was in
Denver in 2008 [for Obama’s nomination acceptance speech] when he
said that in 10 years, we wouldn’t be
importing oil from the Middle East.
I’ve never heard him mention it
again, and I’ve never seen a plan to
accomplish this.
energy source to a transportation fuel. Yet
the plan never really gained traction largely
due to resistance to wind power investment. What happened?
AWind power is priced off the margin, and the marginal price is set by natural gas. When the proposal came out,
natural gas was fluctuating in the $7 to
$13 range. But when you get below $6,
which is where we’ve been, you can’t
finance a wind deal.
QSeveral people, including you, have raised concerns about
U.S. producers’ being able to export
natural gas supplies overseas to
obtain a better price for their prod-
ucts. Do you think there should be
quotas, or even an outright ban, on
U.S. natural gas exports so the prod-
uct stays in domestic hands?
AI’m not big on that. I think what should be done is to
increase the demand in the United
States and take advantage of it. I
understand the economics.
Producers are trying to get into a
global market because natural gas
prices here are at $2.78, and in
Europe it’s $14, in Beijing it’s $14 to
$16, and in Japan it’s $18.
QDo you still believe in the concept?
AWhen natural gas gets above $6, you can use wind.
QThe core of the 2008 Pickens Plan was to make wind power
a primary source of energy and convert natural gas from a primary
QHow much of the overall problem rests with elected officials and the
federal bureaucracy?
AIn Washington, they need to under- stand the portfolio of fuels—and
opportunities to use the fuels—better than
they do.
QThey don’t understand the econom- ics of it?
AYou can start there. People think it’s a free market for oil. It’s not a free market for oil. OPEC sets the prices. Twenty
million barrels come through the Strait of
Hormuz every day. Only 7 percent of that
goes to the United States. But we have our
military over there to protect that.
According to a study by the Milken
Institute, we spent $7 trillion from 1978 to
2010 on Mideast oil. A great part of that
was military spending, but it’s still connected to the price of oil.
In the last 10 years, we have transferred
$1 trillion of wealth to OPEC oil producers.
That’s the largest transfer of wealth in the
history of mankind. If this continues for
the next 10 years, assuming a price of $100
a barrel, it will cost $2.5 trillion. This is not
sustainable.
What we need to know is what’s in the
energy portfolio, how we deploy it, what’s
available in the United States, and what
could be available in a North American
energy alliance. That goes a long way
toward getting us where we need to be.
The resources here are adequate and available, and you don’t need the cost of oil
from the Mideast. ;
