Global production is 84 million barrels per day. Since production falls short of demand, prices have risen.
This is nonsensical. Demand for oil is dependent on price, so to set an absolute number for demand is nonsense.
The true cost of Middle Eastern oil is over $300 a barrel if you account for U.S. military presence in the Middle East, according to Pickens.
An interesting argument, if you accept the premise that our military is over there to ensure our oil supply. It's not a premise I accept.
“Drill baby, drill” – the conservative mantra to drill more oil from the Gulf of Mexico, off the East and West Coast shelves, and the Alaska Natural Wildlife Refuge (ANWR) would produce an extra 2 million barrels a day at best, says Pickens. The would raise America’s domestic production from 7 million to 9 million barrels but still leave America 11 million barrels short each day.
I see two problems here. First, this is the classic liberal argument about anything in economics: "that won't completely solve the problem, so it's not worth doing." But if we accept his supply and demand numbers, that 2 million bpd would even the current supply/demand imbalance, stabilizing oil prices significantly.
My second problem is this: Boone Pickens is not a neutral observer. He has an agenda, and he has skin in this game. He is heavily invested in natural gas, and so any lecture by him should be seen as a sales pitch, not as commentary. His credibility is thus in the same league as Al Gore's, when Gore is talking about "renewable" energy: he stands to make a fortune if people buy into his argument. There's nothing inherently wrong with that, but it should at least color how we see his arguments a bit: they may be valid and true, but don't take his word for it.
Using BOE, natural gas, at its current price, would be about $1.50 per gallon cheaper than diesel fuel.
So why does Pickens need to talk about it? Just sell it; the market should be interested if that's true.
Using BOE, natural gas emits 30% less carbon
Who the hell cares?
Boone Pickens wants to convert America’s 140,000-unit fleet of 18-wheel truckers to run on natural gas.
Truckers run on greasy food, not diesel, so I'll assume he means trucks, not truckers. And if Pickens wants to convert all those trucks, he'd better start buying them.
Pickens says the cost of converting the next-generation fleet of 18-wheelers would be about $60,000 per vehicle – or roughly $9 billion for the entire 140,000 fleet. Where will that money come from?
Um...the owners of the trucks, if they choose to convert?
Last week, Congressmen John Sullivan (R-OK), Dan Boren (D-OK), John Larson (D-CT) and Kevin Brady (R-TX) introduced H.R. 1380, the ‘New Alternative Transportation to Give Americans Solutions’ (NAT GAS) Act to supply the funds. It would ladle out a billion or two a year.
Duh, what was I thinking. Of course billionaire Pickens wants *me* to pay for the conversion, whether I like it or not.
Is this a smart use of government funds at a time when the government is essentially broke?
Um, no?
Yes, I think so.
Well, crap. Wrong again.
If you believe the Pickens numbers, our imported OPEC oil is costing America $2 billion a day and would cost $6 billion a day if unsubsidized by the U.S. military presence in the Middle East. Also, some percentage of the money we send to Saudi Arabia makes its way to our enemies, such as the Taliban.
I suppose now you're going to tell us why taxpayers should be forced to pay for this.
But if natural gas is so economically compelling, why won’t private investors come up with the funds?
I don't know, please explain it to me!
It’s a critical mass problem, argues Pickens. America needs to prime the pump, as it were, to get the wheels turning. Start with 18-wheelers, he says, and that will create a national infrastructure of conversion technology and delivery.
Right, which is why the government had to force us all to buy cars; otherwise we'd all still be traveling by horseback.
To my libertarian friends: Don’t forget that the U.S. government bought the first billion dollars worth of semiconductors in the 1960s. That created the funds for factories and volume manufacturing which in turn drove prices down to affordable levels for civilian uses. Industrial policy? Yes.
Did the government buy those semiconductors to give to companies to use in their operations, or did they buy them because they needed them? Did they buy those semiconductors to jump-start the industry, or to equip the space program or the military? Make-work programs do not create wealth.
America’s commercial use of its vast, cheap, natural gas reserves will take a bipartisan political effort.
Bullsh*t. Let the market decide, and tell Pickens that rent seeking is despicable behavior.
Republicans will have to say no to the Tea Party and their hostility toward government funding.
They'll pry my hostility from my cold, dead hands.
Bipartisan consensus is a rarity these days. It is certainly out of fashion. But energy independence will demand it.
Again, bullsh*t.
An interesting argument, if you accept the premise that our military is over there to ensure our oil supply. It's not a premise I accept
If the US military isn't in the Middle East to protect the free flow of oil, why is it there? Why isn't it in the Congo, Somalia or Burma?
Re: post 4 - good post, and a good rebuttal.
The simplest thing for Pickens to do would be start a small trucking line and convert all the rigs to NG and as they were converted set up a few NG filling stations along their routes.
With a $1.50/gal. advantage it would help off-set the initial cost and demonstrate the value of NG as a motor fuel.
A money making business would do more than a thousand talk shows to sell NG.
Well no need for me to comment now. You covered it all quite nicely.
Well done!
Well said in all respects!!!!