Posted on 06/13/2014 9:47:10 PM PDT by ckilmer
He is putting forth a good plan. The problem is that it involves change. It involves money. It involves government.
To effect the change money will be freed up and government will be open to corruption to dispense it
The US could make a lot of money selling all the asserts in the army, navy and air force.
............
true but it wouldn’t be a wise thing to do. But the military does sell off assets all the time that are out of date. Sometimes they turn whole battleships into scrap iron for sale.
Maybe we should sell that along with the SPR; it makes as much sense.
.............
explain why you do not think that given the current oil related technological revolution — the SPR has not outlived its usefulness. It was after all developed as a response to the first OPEC oil strike of 1973. The USA is in the early years of exactly reversing that oil strike.
TBP: Actually, it's there now. I've got a natural gas car. I could plug it in in my garage and my fuel costs would be $1/gallon through the gas line that powers my stove. There are plenty of fueling stations in California.
Pickens is selling government snake-oil. Home natural gas compressors cost over $5,000. A CNG system for a car costs $3,000 and takes up half the trunk. Range is 40 to 80 miles. There are only 600 fueling stations in the U.S., largely because a ~$5 million step-down facility is required outside major urban areas. Forget about intercity travel unless you switch back to good old gasoline. Having consumers handling natural gas compression is an invitation to explosions and fires. It's like a dangerous alternative to electric vehicles, as if they are not bad enough.
The balance of Pickens' ideas are nanny-state intrusions in our lives and businesses, between tax credits and burning the Strategic Reserve.
Just leave well enough alone. The boom in unconventional production has resulted from private initiative despite the heavy hand of government.
Go away Boone.
Pickens is selling government snake-oil.
................
Natural gas cars are not in the cards.
Typically vehicles suitable for natural gas are short haul trucks and buses with defined routes. That’s what’s available now. I see natural gas buses in my neighborhood all the time.
Beyond that in the northeast there is a switch over from #6 & #4 —even #2 fuel oil to natural gas for heating big buildings.
As well, the initial tests are underway to convert diesel trains to natural gas.
http://online.wsj.com/news/articles/SB10001424127887324539404578342540494619344
T Boone Pickens is talking about converting long haul trucks and buses. That’s doable. The fracking revolution makes the strategic reverse obsolete. Whereas natural gas is locally priced and plentiful in the USA -— oil is globally priced. If the USA cut 3 million barrels@ day out of demand —the extra oil would simply go elsewhere in the world.
Right now I’m optimistic that the USA can enjoy oil increases beyond the end of 2015. They won’t be 1 million barrels@ day annual oil production increases that are expected by the EIA through the end of 2015. Rather current estimates are for over 500k annual oil increases from 2016-2020.
But then that’s it for USA oil increases.
But worldwide demand for oil is going to keep rising as more millions enter the middle class and people’s demand for energy rises.
So just to keep pace with world wide demand the USA is going to need to cut down on oil consumption. The pickens plan takes place over a decade or more.
It does nobody any good to see these huge run ups in oil prices that in turn choke economies world wide and then lead to an economic contraction that kills the demand and therefor the price of oil.
These wild price swings are not helpful to anybody.
WRONG!
T. “Boondoggle” Pickens is ALWAYS in favor of using our taxpayer dollars to control our behavior for the financial and egotistical benefit of T. “Boondoggle” Pickens.
Whether Corporate Raiding as an “Activistist Investor,” or Government Raiding as an “Activatist Con-Artist” Pickens’ proposals always financially harm whatever he claims to “help.”
The market says that gasoline is the fuel of choice for passenger vehicles, and most commercial vehicles, by a wide margin. The government should not attempt to alter our preferences through regulation or the tax code. Distortions like that never work and always lead to misery.
Sometimes government is needed to supply the massive speculative capital required by transformational technologies. Pickens should be promoting thorium reactor research rather than advocating government meddling in the petroleum industry.
Maybe U.S. natural gas production will increase, until we’re no longer importing the gas (liquefaction required for shipping).
U.S. Natural Gas Imports by Country
http://www.eia.gov/dnav/ng/ng_move_impc_s1_a.htm
Very interesting. Shale gas production is expected to go up quite a bit over the next 20 years. Maybe it will increase to about half of total natural gas production in 20 years as expected.
Its pretty certain that the USA has a lot more commercially available natural gas than oil.
Only when they have found something "better" to take its place first.
Maybe we should sell that along with the SPR; it makes as much sense.
Because our need has changed and we have something to take its place? Decribe that to me.
In 1973, when we decided we needed the SPR, we used 6.7 MMBPD of gasoline and 4 decades later we us 8.8 MMBPD.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS2&f=A
Our crude oil imports in the same time have climbed greatly in the same time, 3.3 MMBPD to over 7.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRIMUS2&f=A
In 1973 we imported 2.1 MMBPD from OPEC, now over 3.
Most of our releases from the SPR todate has been to replace oil deliveries disrupted by weather, offshore platforms, oil ports, etc. Do you think that has gone away? Do you think our oil production/delivery is not vulnerable to accidental or intentional disruptions? The SPR is the only oil source protected by the military; Sept 11, 2001 shows we are not immune to attack within our borders as well as supply disruptions from without.
Natural Gas and electric may become significant means of providing transportation in our future economy. But today, they are rather insignificant compared to oil.
T.Boone Pickens owns the largest Natural Gas Transportation Fuel distribution system in the US. While I want to see NG fuel grow, it has been my observation over the decades when T.Boone talks, we should first tighten our grip on our own wallet.
The SPR provides more damping to price swings than anything else in the world. The ability to put 4.4 MMBPD additional oil so quickly into the largest consumption market is unmatched.
The SPR provides more damping to price swings than anything else in the world. The ability to put 4.4 MMBPD additional oil so quickly into the largest consumption market is unmatched.
...............
Can you recall a time when it was actually used to great effect?
For example, the last big run up was 2008. The price of oil briefly touched 150. The economy subsequently crashed. was the strategic reserve used? No. Here’s a list of times that there has been small draw downs on the SPR. They’re all minor. http://energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve/spr-quick-facts-and-faqs
The Saudis have a greater reserve capacity that they can bring to market faster than SPR. Historically they have used their reserve capacity better than the USA. For example, in 1985, Reagan convinced the Saudis to pour their extra oil reserves on to the world market to crush the price of oil. They did. The price of oil collapsed. Then as now the Russians were dependent on oil prices to pay their government officials at all levels. When the oil revenues collapsed, the Soviet government couldn’t pay much of their bureaucracy. When they couldn’t pay their people -they couldn’t command them. Since the old soviet union was a command economy/polity— when there was no command and control the country fell apart. That’s how reagan won the cold war.
Even today the Saudis use their reserves to American advantage. If they wanted to they could pour an extra two million barrels @ day onto the world markets and drop oil prices down to $70@ barrel. But they need about 90 for their patronage system to work smoothly. Further its likelier that extra Saudi reserve capacity will be used to sop up lost Iraqi supply—should that happen- than that American SPR will be used.
The problem is that for years to come supply and demand will be too tightly balanced. There is little reserve capacity in the USA. The solution for the USA is first to raise production but then also to drop consumption—in roughly that order.
The Saudis actually get this. There is a concerted effort now in Saudi Arabia to wean that country off of oil—so that they can use their oil production for exports. They plan to spend about 109 billion on solar power over the next 15 years.
http://www.fool.com/investing/general/2014/05/25/interest-in-solar-energy-rises-even-in-saudi-arabi.aspx
I am not in favor of suddenly dropping US demand by 3 million barrels@ day. Rather what I think prudent would be to follow the interests of American frackers. They will be able to raise supply through about 2020. (And recall that I’m making the optimistic case for rising production.) But that’s really about it. In the mean time —every year they will be slashing their costs. After 2020 there won’t be any boosts in supply. After 2020 the most important thing for the USA to do is to be slashing demand annually. Why? because demand world wide is still going to be going up substantially. The USA will need to be slashing demand substantially just to keep markets balanced.
Historically they have used their reserve capacity better than the USA
- - - -
We have a different opinion of what that “S” is SPR is meant for.
...............
This graph shows oil production since the 19th century. It also conveys the same story without showing quite how production has increased recently.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.