The First Billion Is the Hardest by T. Boone Pickens

Author:T. Boone Pickens [Pickens, T. Boone]
Language: eng
Format: epub
ISBN: 9780307449818
Publisher: The Crown Publishing Group
Published: 2008-09-01T16:00:00+00:00

The same request by Mr. Bush had already been rebuffed by the Saudis during his visit to Riyadh in January. This time around, the Saudi response was particularly blunt and condescending: “If you want more oil, you need to buy it,” said Ali al-Naimi, the Saudi oil minister.

When you consider the fact that the Russians are also making deals with the Iranians, and that the two countries are the world’s number one and number two in natural gas reserves, that’s even more alarming. So now the Russians are tied up with both the Saudis for oil production and the Iranians for gas production. Where does the United States fit in in all of this?

You’ll pardon the expression, but my answer is, Sucking hind tit.

TOO LITTLE, TOO LATE

The first commercial oil well dates back to 1859. The last major find was in 2000—the Kashagan field in the Caspian Sea, which was considered to be the fifth-largest oil field in the world. The field is said to be capable of producing over 1 million barrels of crude daily when it goes into production in the next decade. Of similar size, Prudhoe Bay, discovered in 1976 in Alaska, produced 2 million barrels a day at its peak. One of the problems with major discoveries is the amount of time it takes them to become producing oil fields. Even if we find a field, such as the Tupi field discovered in 2007 by Petrobras in Brazil, it can take ten years before there is production online.

I’m convinced that some of the oil that people claim is still out there might not be all that it is cracked up to be. Twenty years ago, on a trip to Alaska, I visited with that state’s former governor Wally Hickel, who also is a former U.S. Secretary of the Interior. Hickel claimed back then that untapped oil reserves in the Arctic National Wildlife Refuge (ANWR) were more than 2 billion barrels. More recently I’ve heard other politicians say that there are 16 billion barrels in that protected reserve. Somehow Hickel’s 2 billion barrels mushroomed. I thought Hickel’s estimate was in the ballpark. Even if there is anything close to 16 billion barrels out there, the Alaska pipeline can haul only 2 million barrels a day. And forget about building a new pipeline; that will never happen. There’s no reason to build a new pipeline anyway. You can get the oil out over time and preserve the field longer, if it is larger than I think it will be.

The Alaska pipeline, which once operated at capacity at 2 million barrels a day, carries less than half of that today. Some people like to say our problem is a lack of refining capacity. It’s a myth. Who needs new refineries if you don’t have oil to refine? There hasn’t been a new refinery built in the United States since 1976. New refineries will come online, but they’ll be overseas. In 2006, Wood Mackenzie Consultants Ltd. estimated there are five

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