Fortune mag interview with T. Boone Pickens

[BaliBabyDoc]

old man and his musings

The second one is Iraq. I don't think we went into Iraq to get oil, any more than I think we went into Afghanistan to get rocks. It was something that had to be done, and fortunately Iraq had oil instead of rocks. And therein how does it affect us? I think the United States should come out of that with a call on that oil at market price. And that's 150 billion barrels. The third thing that has happened with this administration, as far as energy is concerned, is Qatar. You've got a huge air base, and Central Command. And Qatar must have wanted us there. That was negotiated. And it so happens they have the largest gas field. And I don't think that's a coincidence. And the biggest processor of all that gas is Exxon. So you can get lucky once, but I think there's some planning in the Bush administration.

Q: Should the U.S. drill in the Arctic Preserves?
A: I've been there. The state wants it [drilling]. What the Alaskans want to do is on them. Nothing's happening as far as finding any more oil. If it was my decision, let it be. Remember, the oil's been there over 100 million years, so it isn't like if I pass it up now we can't go back to it.

 

[LunarRay]

Pickins thinks we've 20 or 30 years before transition to another hydrocarbon fuel. I think, as he said about China and Russia, the demand will raise the price and enable the drilling to go forth in more speculative areas. We have our feet planted right in the middle of 'mother oil' for a reason other than Mid East Democracy. Our economy demands oil. The number of workers related to the oil consumption and generation segment is staggering. If we went to hydrogen vehicles the resulting technology would eliminate 30 % of the related work force. For US market that would affect Japan and Korea most but, the US would get hit hard too. Just the emission control gadgets being unneeded would lose many jobs. I understand the entire hydro engine or motor is 30 percent less involved then the petro counter part so maybe it is accurate. I got this from some reading awile back so I've no direct link.. but, it seems to make sense.

 

[BaliBabyDoc]

I don't disagree with anything you've said . . . that's part of the reason I think the Bushies emphasis on hydrogen fuel cells is BS. The gradual (but hopefully expeditious) evolution from poor efficiency internal combustion to high efficiency internal combustion to hybrids would have dramatically reduced emissions while producing technology that would likely sustain if not expand economic opportunities . . . not to mention reduced US reliance on foreign oil. Alas there's no leadership for such a reasoned approach.

As much as I love CA, I must admit I think it's kinda short-sighted to have built all of those natural gas-fired power plants. Granted they are certainly better than the pollution spewing retread power plants that blight the southern landscape (and air/water).

 

[LunarRay]

This may sound nutty but, I'm in favor of nuclear, solar, hydro and wind (wave too) as the primary and perhaps the only allowed power generating methods for electricy and heating needs. I'd do away with natural gas heating, petro engines and the like. This would do a number of things including stimulate the economy. I just can't imagine breathing the junk that gets expelled from all the tail pipes and smoke stacks and expecting no significant 'down stream' effects. I'd do it now!

 

[zephyrprime]

. If we went to hydrogen vehicles the resulting technology would eliminate 30 % of the related work force. For US market that would affect Japan and Korea most but, the US would get hit hard too. Just the emission control gadgets being unneeded would lose many jobs. I understand the entire hydro engine or motor is 30 percent less involved then the petro counter part so maybe it is accurate.

It's not like the hydrogen would make itself. The hydrogen industry would need a lot of people too. A hydrogen combustion engine is essentially the same thing as a gas engine except for some emmissions sensors so it wouldn't need a smaller workforce. And any fuel cell engime we can currently make requires way more man hours of labor than an ICE.

But your understanding of economics is wrong. If a hydrogren economy could be made with far fewer workers than the current petro one, that'd be great! All the products related to hydrogen would be cheaper than their petro counterparts. It'd be a huge boon for the economy.

 

[GrGr]

But would a hydrogen economy (or any other natural resource economy) be able to replace the petro economy?

The US economy is largely fueled by the oil trade in US dollars which forces other countries to buy large amounts of dollars for their reserves which allows the US to run a huge trade deficit. I'm not saying this to criticize your points about the merits about new energy sources but to point out the reason the US has to protect the current arrangement with the US dollar as the cornerstone of world trade.

?The dollar is the world reserve currency. This gives a huge subsidy to the US economy because if a country wants to hold lots of dollars in reserve they must supply the US with goods and services in return for those dollars. In return the US creates a bit more credit. The more dollars there are circulating outside the US, the more goods and services the US has imported virtually for free. This is how the US manages to run a huge trade deficit year after year without apparently any major economic consequences. No other country can run such a large trade deficit with impunity. It is in effect getting a massive interest-free loan from the rest of the world.
One of Europe's primary objectives, if not the primary objective, of setting up the Euro was to try and get some of this free lunch for Europe. If the Euro became a major reserve currency, or better still replaced the dollar as the major reserve currency, then Europe too could get something for nothing.
This would be a disaster for the US. Not only would they lose their subsidy, which has been increasing in size and in importance to American economic well being as the years have gone by, but countries switching to Euro reserves from dollar reserves would start spending their dollars in the US. In other words the US would have to start paying its debts to other countries. As countries converted their dollar assets into Euro assets the US property and stock market bubbles would, without doubt, burst. The Federal Reserve would no longer be able to print more money to reflate the bubble as it is currently openly considering doing, There is, however, one major obstacle to this happening: OIL! Oil is of course by far the most important commodity traded internationally, and if you want to buy oil on the international markets you usually have to have dollars.
Until recently all OPEC countries agreed to sell their oil for dollars only. This meant that oil importing countries, like Japan, needed to hold dollar reserves in order to be able to buy oil. So long as this remained the case, the Euro was unlikely to become the major reserve currency. There is not a lot of point to stockpiling Euros if every time you need to buy oil you have to change them into dollars. But in November 2000 Iraq switched to the euro, with potentially perilous consequences for the US. Only one country has the right to print dollars: the US! If OPEC were to decide to accept euros only for its oil, then American economic dominance would be over. Not only would Europe not need dollars anymore, but Japan which imports over 80% of its oil from the Middle East would have to convert most of its dollar assets to Euro assets (Japan is of course the major subsidiser of the US). The US on the other hand, being the world's largest oil importer would have to acquire Euro reserves, i.e. it would have to run a trade surplus. The conversion from trade deficit to trade surplus would have to be done at a time when its property and stock market prices were collapsing and its own oil supplies were contracting. It would be a very painful conversion; potentially disastrous.?

link

"US economy's net foreign indebtedness--the accumulation of two decades of running larger and larger trade deficits--will reach nearly 25 percent of US GDP this year, or roughly $2.5 trillion. Fifteen years ago, it was zero. Before America's net balance of foreign assets turned negative, in 1988, the United States was a creditor nation itself, investing and lending vast capital to others, always more than it borrowed. Now the trend line looks most alarming. If the deficits persist around the current level of $400 billion a year or grow larger, the total US indebtedness should reach $3.5 trillion in three years or so. Within a decade, it would total 50 percent of GDP."

link

 

[GrGr]

Actually I found this quote from the Pickens article interesting:

"Q: Any thoughts on the Bush energy policy?
A: I feel that something has happened very unusual during this administration. There's no question: You can go back as far as you want to go back, and every President since I can remember has talked about having an energy policy, and we need to get off our dependency on foreign oil. And people in the oil industry know that isn't going to happen. Our imports keep going up. We're up to 62%, 11 million barrels a day now in the United States."

Pickens also speculates that oilproduction worldwide is about to peak, if it hasn't already.

 

[LunarRay]

Originally posted by: zephyrprime

. If we went to hydrogen vehicles the resulting technology would eliminate 30 % of the related work force. For US market that would affect Japan and Korea most but, the US would get hit hard too. Just the emission control gadgets being unneeded would lose many jobs. I understand the entire hydro engine or motor is 30 percent less involved then the petro counter part so maybe it is accurate.

It's not like the hydrogen would make itself. The hydrogen industry would need a lot of people too. A hydrogen combustion engine is essentially the same thing as a gas engine except for some emmissions sensors so it wouldn't need a smaller workforce. And any fuel cell engime we can currently make requires way more man hours of labor than an ICE.

But your understanding of economics is wrong. If a hydrogren economy could be made with far fewer workers than the current petro one, that'd be great! All the products related to hydrogen would be cheaper than their petro counterparts. It'd be a huge boon for the economy.

That which I understand about the economy is about one line.. No one understands the economy with certainty. I don't know if the figures are accurate or just the proponents of one side against the other... which is as usual. IFas I said it is 30% less involved maybe there would be a net loss in jobs related to what is made here for US workers. You presume the cost benefit will be passed on and that Japan or whomever won't saturate our market... etc. It seems to me we had the Auto,electronics,computer and related fields sown up till awhile ago. Who makes the stuff we consume now? But this is tangential..
I don't know about hydrogen. I do know about CNG/LNG and its use in vehicles. We designed the systems for many of the consumers out here like Waste Management, SDG&E, Various Transit districts etc. They save huge $ in the service aspects and in the obsolesence factors. These are US made vehicles and for everyone not purchased a few folks lose a job.. But, who's counting.