T. Boone Pickens on the Future of U.S. Energy

[stjr]

Mr. Pickens put on quite a show Thursday night at the Wolfson Childrens' Hospital Florida Forum with his non-partisan analysis of the future of U.S. energy policy.

He stated that all added offshore oil drilling along all U.S. coasts and in ANWR would not effect the future price of oil as it would not amount to enough to move the markets.  He said the only viable U.S. energy independence solution for the next generation or so is natural gas powering trucks, most autos, and electric plants.  The U.S. sits on the largest reserves in the world and is barely using what it has.  Natural gas trades currently at about 1/5th the energy equivalent of oil.  It also is much cleaner to burn.

Pickens was humorous, serious, and persuasive and a very straight shooter, not mincing his words.  He has spent over $60 million in his own money since 2008 to get his message out and clams 1.6 million people signed up for his "army".  So far, he says he has the ear of both Congress and the President and expects within 10 years to replace much of our dependence on imported oil from the Middle East and elsewhere with U.S. produced natural gas.

He is considered the "Oracle of Oil" for his accuracy in predicting oil prices.  He expects oil to hit $300/bb within 10 years because new discoveries are merely replacing the annual 7% drop of existing production while demand will be again outstripping supply with the growth of China and an eventual global economic recovery.  Increased prices are the only way to bring demand down to equal supply.

Pickens also supports all other energy alternatives including wind, solar, nuclear, battery, etc. as long as its produced within the U.S. and not dependent on imports.

He claims no one, including the oil companies, has proposed any other viable U.S. energy independence plan for the next 30 or so years.  This is it.

Here is his web site with his plan and how interested parties can get involved in supporting him:

http://www.pickensplan.com/theplan/

[untarded]

Guess who stands to profit most from natural gas...


T. Boone Pickens.

[stjr]

Guess who stands to profit most from natural gas...
T. Boone Pickens.

Maybe... though supposedly he made his fortune from oil.  Warren Buffet now shrewdly owns a big chunk of the U.S. natural gas pipelines (maybe he knows something we don't as well?).

Doesn't matter as all energy sources are owned by someone so there will always be winners and losers.  Pickens points out all major "U.S." oil companies get most of their oil from imports including Exxon at 80% or so.  Invest in a natural gas company if you want to participate.

In the mean time, he claims no one has a better idea for a cheaper, readily available, U.S. sourced energy plan.  And, as I highlighted, he has no qualms about other energy sources.  He simply says we can not further depend on imported oil/energy as the risks and obvious math are about to do in our economy.

FYI, Pickens is a geologist by training and has been in the oil business since 1951.

Do you have another informed and better take?  Why is he getting bi-partisan support?

[chipwich]

Did he mention that his plan would most likely cost $700 billion to implement (mostly using taxpayer money) so we could set up wind farms, transmission lines, and a host of other networks to use the reliable wind energy in the plains and western states?  Then, there is the assumption that coal, oil and existing natural gas power plants would be shut down, a new network of nat gas fueling stations opened so we can use it for our cars instead of oil.

I think he is on the right path with using both renewable energy and natural gas, but I I have an uneasy feeling that his plan stands to make generations of the Pickens family obscenely wealthy from natural gas.  We may need a whole host of changes to cope with future oil scarcity, including switching to more diesel fuel, natural gas, hybrid technologies, solar panels on each house and constructing wind farms.

[stjr]

Did he mention that his plan would most likely cost $700 billion to implement (mostly using taxpayer money) so we could set up wind farms, transmission lines, and a host of other networks to use the reliable wind energy in the plains and western states?  Then, there is the assumption that coal, oil and existing natural gas power plants would be shut down, a new network of nat gas fueling stations opened so we can use it for our cars instead of oil.

I think he is on the right path with using both renewable energy and natural gas, but I I have an uneasy feeling that his plan stands to make generations of the Pickens family obscenely wealthy from natural gas.  We may need a whole host of changes to cope with future oil scarcity, including switching to more diesel fuel, natural gas, hybrid technologies, solar panels on each house and constructing wind farms.

Your mention of diesel as an alternative already shows you are misinformed.  Pickens says it takes 2 barrels of oil to make 1 barrel of gas and 4 barrels of oil to make diesel.  So, diesel is an even worse alternative than gas for increasing our dependence on oil imports (not to mention that, despite advances, diesel is still much dirtier to burn than gas or natural gas).

I think you are missing his main point altogether.  He is saying to substitute American sourced energy for imported energy.  And, he says the cheapest existing U.S. sourced energy for the next 25 to 30 years that is available in quantities to make an impact is natural gas.  The other stuff is fine but it doesn't compete with natural gas for the foreseeable future in implementation times, cost, feasibility.

Further, he said that batteries and all other currently viable energy option can not power the 6.5 million U.S. 18 wheelers.  There are only two current options: oil or natural gas. 

Like I said, he is supportive of wind, solar, and even nuclear but it isn't going to fuel trucks which use daily the equivalent of all the oil we get from the Middle East.  So, on this basis alone, he says natural gas is the current best solution for quickly and totally reducing our dependence on Middle Eastern oil.  He says if government mandated, within about 7 years, all U.S. trucks could be on natural gas and we would at least not be dependent on Mid-East oil.  We would still have imported oil, but it would be from friendlier countries.

You really should hear the man's story in his own words.  He has heard all the arguments from the skeptics and has the factual answers to respond.  He didn't get rich being stupid and can spit out data like a computer.  At his age (I estimate around 80) more money isn't going to make his life any different.  It may be precisely because he is already wealthy, he doesn't have to kiss up to special interests and he can speak his mind on what he truly thinks is right.

Lastly, he said we imported $1.25 trillion/year in Mideast oil before the recession.  A one-time investment of your $700 billion would be paid back in only a few months at that rate.

The one item he did not address is conservation in the form of mass transit.  I guess he assumes market forces will take care of that.

By the way, who else in the energy industry do you wish to listen to?  The oil companies?  The coal companies?  We've heard their past stories and we are as dependent on imported oil as ever and its getting worse by the day.  If you believe Pickens, we haven't even touched our worlds-largest natural gas resources even though it's heavily used almost everywhere else in the world with access to it.  Only the U.S. has significantly ignored it.

Don't forget to visit his website I posted above where you can read much of his plan for yourself.

[CS Foltz]

T Boone has the right idea as far as I am concerned. The US of A needs to explore other means of energy and he is probably correct with his idea's as to dollars going out for energy. We need to do something long before it is needed......we need to be offensive and start thinking outside of the box and soon!

[BridgeTroll]

He is saying to substitute American sourced energy for imported energy.

Sounds to me like we need to explore, drill and exploit our own very large resources.  Go ahead and exploit wind and solar all you want... they will not and cannot compete with fossil fuel energy for the forseeable future.

[TPC]

I'm all for reducing our dependancy on imported oil. I was listening to NPR a while back and heard about shale gas, interested to see how that will turn out.

http://www.npr.org/templates/story/story.php?storyId=113043935

[stjr]

He is saying to substitute American sourced energy for imported energy.

Sounds to me like we need to explore, drill and exploit our own very large resources.  Go ahead and exploit wind and solar all you want... they will not and cannot compete with fossil fuel energy for the foreseeable future.

Natural gas, along with coal and oil are fossil fuels.

As to more drilling for oil, again, Picken's point is being missed.  There simply are not enough oil reserves, known or speculated, to substitute for Mideast and other imported oil.  His point is just the opposite of yours.  Without adequate oil, it's time to adopt another plan.  Pickens claims our biggest lode of energy in the ground is natural gas.  Why would you not wish to exploit it?

I was listening to NPR a while back and heard about shale gas, interested to see how that will turn out.

If I understood Pickens correctly, the "shale gas" you refer to is natural gas.  Aside from new discoveries, he says the advancement of horizontal drilling has made natural gas accessible when before it was considered technically unfeasible.  This is one of the big changes in the dynamics of exploiting it.

From Wikipedia:

Fossil fuels or mineral fuels are fuels formed by natural resources such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years.[1] These fuels contain high percentage of carbon and hydrocarbons.

Fossil fuels range from volatile materials with low carbon:hydrogen ratios like methane, to liquid petroleum to nonvolatile materials composed of almost pure carbon, like anthracite coal. Methane can be found in hydrocarbon fields, alone, associated with oil, or in the form of methane clathrates. It is generally accepted that they formed from the fossilized remains of dead plants and animals[2] by exposure to heat and pressure in the Earth's crust over hundreds of millions of years....

Fossil fuels are formed by the anaerobic decomposition of remains of organisms including phytoplankton and zooplankton that settled to the sea (or lake) bottom in large quantities under anoxic conditions, millions of years ago. Over geological time, this organic matter, mixed with mud, got buried under heavy layers of sediment. The resulting high levels of heat and pressure caused the organic matter to chemically alter, first into a waxy material known as kerogen which is found in oil shales, and then with more heat into liquid and gaseous hydrocarbons in a process known as catagenesis.

There is a wide range of organic, or hydrocarbon, compounds in any given fuel mixture. The specific mixture of hydrocarbons gives a fuel its characteristic properties, such as boiling point, melting point, density, viscosity, etc. Some fuels like natural gas, for instance, contain only very low boiling, gaseous components. Others such as gasoline or diesel contain much higher boiling components.

http://en.wikipedia.org/wiki/Fossil_fuel

[BridgeTroll]

Natural gas, along with coal and oil are fossil fuels.

As to more drilling for oil, again, Picken's point is being missed.  There simply are not enough oil reserves, known or speculated, to substitute for Mideast and other imported oil.  His point is just the opposite of yours.  Without adequate oil, it's time to adopt another plan.  Pickens claims our biggest lode of energy in the ground is natural gas.  Why would you not wish to exploit it?

The point is NOT missed.  Oil and gas are usually found together.  Whether it be oil, gas , or coal, or solar, or wind we must exploit our own resourses.  ANWR, the Gulf of Mexico hold very large reserves of oil and gas niether of which will sustain us ad infinitum.  But exploitation of these reserves buys us time to develop reliable new sources of energy.

[stjr]

Natural gas, along with coal and oil are fossil fuels.

As to more drilling for oil, again, Picken's point is being missed.  There simply are not enough oil reserves, known or speculated, to substitute for Mideast and other imported oil.  His point is just the opposite of yours.  Without adequate oil, it's time to adopt another plan.  Pickens claims our biggest lode of energy in the ground is natural gas.  Why would you not wish to exploit it?

The point is NOT missed.  Oil and gas are usually found together.  Whether it be oil, gas , or coal, or solar, or wind we must exploit our own resources.  ANWR, the Gulf of Mexico hold very large reserves of oil and gas neither of which will sustain us ad infinitum.  But exploitation of these reserves buys us time to develop reliable new sources of energy.

According to Pickens, the biggest North American natural gas deposits are in Appalachia followed by lesser ones in northern Lousiana, parts of Texas, British Columbia, and a few others I can't recall.  But, clearly, there isn't a full correlation between where the gas is and oil.

Pickens says expanded offshore and ANWR drilling, at most, would provide 2 million bbls/day versus our current U.S. needs for 85 to 87 million bbls/day.  It wouldn't hurt but he said it would have almost no impact on the market and make little difference in our dependence on foreign oil.  He comes back to saying only natural gas will make the inroads to free us of Mideast and other imported oil needed for the next 25 to 30 or so years.

[BridgeTroll]

Here ya go... the gulf... gulf states, texas, oklahoma, and texas,... you are right... no oil there.



or this map...

[stjr]

Here ya go... the gulf... gulf states, texas, oklahoma, and texas,... you are right... no oil there.

I said, based on Picken's comments, there didn't appear to be a full correlation, i.e. apparently there can be gas where there isn't necessarily a lot of oil.  I don't see where that conflicts with the maps.

I don't know the difference in your two maps, but the second one appears to match up well with Pickens comments with the "gas basins" in grey.  Appalachia is quite large in area on this map.

These are small issues.  The bigger question is, is his overall proposal appropriate energy policy for the U.S. for the next few decades?  Apparently, a lot of people and politicians think so.  We shall see.  At least he has the country thinking about it, where before, not so much.

[BridgeTroll]

Not disagreeing at all stjr.  Pickens point... and mine... is that we need to use ALL the energy resources at our disposal.  Natural gas has been ignored and limited in its uses in the past and it is time to exploit and rethink the various ways we can use it.  At the same time... we have large reserves of oil that we have ignored because it is too deep or too difficult or too environmentally sensitive to pursue.

[BridgeTroll]

http://en.wikipedia.org/wiki/Natural_gas

Fossil natural gas
In the past, natural gas was almost always a byproduct of producing oil, since the small, light gas carbon chains come out of solution as it undergoes pressure reduction from the reservoir to the surface, similar to uncapping a bottle of soda pop where the carbon dioxide effervesces. Unwanted natural gas can be a disposal problem at the well site. If there is not a market for natural gas near the wellhead it is virtually valueless since it must be piped to the end user. Until recently, such unwanted gas was burned off at the wellsite, but due to environmental concerns this practice is becoming less common. Often, unwanted (or 'stranded' gas without a market) gas is pumped back into the reservoir with an 'injection' well for disposal or repressurizing the producing formation. Another solution is to export the natural gas as a liquid. [2]Gas-to-liquid, (GTL) is a developing technology that converts stranded natural gas into synthetic gasoline, diesel or jet fuel through the Fischer-Tropsch process developed in World War II Germany. Such fuels can be transported through conventional pipelines and tankers to users. Proponents claim GTL fuels burn cleaner than comparable petroleum fuels. Most major international oil companies are in advanced development stages of GTL production, with a world-scale (140,000 bbl/day) GTL plant in Qatar scheduled to come online before 2010. In locations such as the United States with a high natural gas demand, pipelines are constructed to take the gas from the wellsite to the end consumer.

Fossil natural gas can be "associated" (found in oil fields) or "non-associated" (isolated in natural gas fields), and is also found in coal beds (as coalbed methane). It sometimes contains significant quantities of ethane, propane, butane, and pentaneâ€"heavier hydrocarbons removed prior to use as a consumer fuelâ€"as well as carbon dioxide, nitrogen, helium and hydrogen sulfide.[1] Natural gas is commercially produced from oil fields and natural gas fields. Gas produced from oil wells is called casinghead gas or associated gas. The natural gas industry is producing gas from increasingly more challenging resource types: sour gas, tight gas, shale gas and coalbed methane.

The world's largest proven gas reserves are located in Russia, with 4.757 × 1013 m³ (1.6 × 1015 cu ft). Russia is also the world's largest natural gas producer, through the Gazprom company. Major proven resources (with year of estimate) (in billion cubic metres) are world 175,400 (2006), Russia 47,570 (2006), Iran 26,370 (2006), Qatar 25,790 (2007), Saudi Arabia 6,568 (2006) and United Arab Emirates 5,823 (2006).

The world's largest gas field is Qatar's offshore North Field, estimated to have 25 trillion cubic metres[2] (9.0 × 1014 cu ft) of gas in placeâ€"enough to last more than 200 years at optimum production levels. The second largest natural gas field is the South Pars Gas Field in Iranian waters in the Persian Gulf. Connected to Qatar's North Field, it has estimated reserves of 8 to 14 trillion cubic metres[3] (2.8 × 1014 to 5.0 × 1014 cu ft) of gas.

Because natural gas is not a pure product, when non-associated gas is extracted from a field under supercritical (pressure/temperature) conditions, it may partially condense upon isothermic depressurizingâ€"an effect called retrograde condensation. The liquids thus formed may get trapped by depositing in the pores of the gas reservoir. One method to deal with this problem is to reinject dried gas free of condensate to maintain the underground pressure and to allow reevaporation and extraction of condensates.