[Matthew Simmons has been a key advisor to the Bush
Administration, Vice President Cheney's 2001 Energy
Task Force and the Council on Foreign Relations.
An energy investment banker, Simmons is the CEO of
Simmons and Co. International, handling an investment
portfolio of approximately $56 billion. He has served
previously on the faculty of Harvard Business School.
Among Peak Oil researchers he is known for two seemingly
contradictory things: being a staunch supporter of
George W. Bush and his policies and probably the
only outspoken insider to talk openly about Peak
Oil.
On May
27th, 2003 Simmons addressed the second international conference
of the Association for the Study of Peak Oil (ASPO)
which was meeting at the French Petroleum Institute
(IFP) via a satellite teleconference video link from
his Houston offices.
His remarks were so revealing that I had them transcribed
from my tape recording of the event. It is becoming
clearer by the day that the Bush administration was
aware of Peak Oil before taking office (pun intended)
and Simmons' remarks indicate an awareness of Peak
Oil's implications. They also predict extremely severe
consequences arising from natural gas depletion in North
America. – MCR]
Matthew
Simmons Transcript
[Regarding peak energy]
It might turn out actually to be one of the most important
topics for the well being of the globe over the next
fifty years, which basically (is), "Is the energy glass
half full or half empty?" So let me, in the course
of the next
thirty or forty minutes, just share some of the issues
that I think are important.
First of all, the topic
of whether the energy glass is half full or half empty
is right. It basically elicits some of these talks
from so many people that start out with positions saying, "The
glass is half empty, we will never run dry."
But the real issue is,
basically speaking, does not basically mean running
dry. The debate on how long the dwindling of supplies
might take has been extremely controversial. In fact,
I'd say that most of the debate has been one-sided.
Optimists argue that
the issue is still years away, and to their support
is that it has never happened before and it's too often
been predicted. And each time the future looks bleak,
the optimists argue, it's always darkest before dawn.
It is also interesting how many people basically look
at undiscovered reserves and basically say that we
really don't know how much we still have left to find,
and that's true, but we also, with the evidence of
the reserves, there's no guarantee that the reserves
are actually there.
I come back to the basics
and say I think that one thing that we do all know
is that oil and gas resources are genuinely non-renewable
and so someday they will basically run out. And also,
we are using 28 billion barrels a year, that's a lot
of energy to be consuming. And peaking, as you all
know, is different than running out. Is "peaking" an important question or issue?
First of all, if you
start out by saying usable energy is the world's most
critical resource then obviously it is an important
issue. Without volume energy we have no sustainable
water, we have no sustainable food, we now have no
sustainable healthcare. And since five-sixths of the
world still barely uses any energy it really is an
important issue. And since five-sixths of the world
is still growing fast or too fast it's even a more
important issue.
What peaking does mean,
in energy terms, is that once you've peaked, further
growth in supply, is over. Peaking is generally, also,
a relatively quick transition to a relatively serious
decline at least on a basin by basin basis. And
the issue then, is the world's biggest serious question.
Peaking of oil is also
probably then assuming peaking of gas too. So is this
issue important, I think the answer is an emphatic
yes. Why does this issue evoke such controversy? Well,
I think for several reasons, first of all the term "peaking",
unfortunately, does suggest a bleak future. It also
suggests high future energy prices and neither are
pleasant thoughts.
I think it is human
nature, basically, to say that we really like to have
pleasant thoughts. And crying wolf is bad business
unless the wolf turns out to be already at the front
door, and by then, the cry is generally too late. And
crises are basically problems, by definition, that
got ignored. And all great crises were ignored until
it became too late to do anything about it. And so
if the issue is serious, why are the answers so dissenting.
I think the reasons are several-fold. First of all,
the data and the methodology to estimate total energy
resources is still remarkably hazy and takes a lot
of fuzzy logic to get to the bottom line.
Judging the data, for
instance, on current decline rates on even fields per
basin is very hard to define and it turns out that
peaking is one of these fuzzy events that you only
know clearly when you see it through a rear view mirror,
and by then an alternate resolution is generally too
late.
Over the course of the
last few years, conventional wisdom in the energy business
became "do not trust conventional wisdom." The voice
of energy, for better or worse turns out to be the
International Association of Energy Economists and
I will be attending this group's 26th annual
meeting next week in Prague.
This group basically
had a mantra throughout the decade of the nineties
that growth in energy demand is suspect, that energy
supplies are surging, that Moore's Law has brought
down semiconductors at a cost so dramatically it will
bring energy prices considerably lower, that OPEC is
obsolete, and a non-sustainable concept.
Last year, the IAEE
had their 25th annual meeting in Aberdeen, and I attended the program. It was really interesting.
On Saturday morning, they had 13 of the past 25 presidents
talking for the better part of two hours, and individually
reflecting on the lessons that they had learned over
the past 25 years. And I heard 13 consecutive people
basically state...what I heard most, was the word, "conventional
wisdom." This was the big mistake I personally made
25 years ago. Twenty-five years ago, I thought demand
was going to go up fast and that was wrong, I thought
that oil prices were going to 100, and that was wrong,
and I thought the OPEC was omnipotent, and that was
wrong, and I thought that supplies basically were going
to be a pot of gold and that was wrong, and what I
learned personally is to never trust "conventional
wisdom." And by the time all thirteen speakers had
spoken, it was clear that their belief had become conventional
wisdom. It turned out that basically the generals,
as happens so often in the military, were fighting
the last war. The big energy mistake that was made,
circa 1980-1981, was that oil was going to go to 100,
was that the demand growth was insatiable, and that
OPEC was omnipotent. And what all these people missed
at the time was that the oil prices had already grown
tenfold; that nuclear energy was at the front door,
that the fear of a hundred dollar oil had finally created
a conservational efficiency move and that a ten-year
E.P. [environmental protection movement] movement created
a surplus glut. And preventing making this mistake
again became public enemy number one and literally
led a generation of energy experts to mistrust demand,
to assume supply growth and just to know that price
collapse was just around the door, the corner.
But it is interesting
now with the benefits of being in a new millennium,
to look back and see what really happened to oil demand
over the last 30 years. First of all, global oil demand
did fall in 1974 and half way through 1975. But over
the course of the first eight years of the 1970's,
global oil demand grew significantly. Global oil demand
then fell in 1979 through 1983. And so you had five
of thirteen years down but the two events that caused
this down demand were a tenfold increase in product
and the introduction of the only new energy source
native to the 20th century; nuclear. Global
oil demand began to grow again in 1983. The collapse
of the F.S.U. from 1988 to 1995 created the illusion
of global stagnation while the rest of the world's
oil demand and energy just grew and grew and grew.
And it's interesting
to step back and look at the difference between 1986
when non-FSU oil demand was just under 54 million barrels
a day, to 2002, when we crossed 73 million barrels
a day... a 21 million barrel a day change during an era
that people thought basically that demand growth was
over.
And then let's turn
briefly to what happened to the world's supply. Well,
first the former Soviet
Union supply
collapsed. Secondly, the North
Sea had its second boom. Third, deep water became the
new frontier and probably the last frontier, and fourth,
OPEC remained the swing producer. If you basically
look at the non-OPEC numbers excluding the former Soviet
Union, you basically
have a growth between '86 and 2002 of 8.3 million barrels
a day. Now it's interesting to see that global oil
growth and demand was 20 and non OPEC non-FSU growth
was 8.3. But if you look carefully at the 8.3, in the
first ten years, '86 thru '96, during an era of low
oil prices, we grew by 6.7 million barrels a day, and
in the last six years, during the era of high oil prices,
we grew by 1.5 million barrels a day. So 81% of the
last fifteen years growth, came in the, sixteen years
growth, came during the era of low prices, and 19%
came during the era of high prices. It turns out with
just hindsight that we can now clearly see that the
growth engine of non-OPEC oil, excluding the former Soviet Union petered out. The North Sea peaked, Latin America excluding
Brazil peaked, North America, excluding heavy oil peaked,
Africa excluding deep water peaked, the middle east
excluding OPEC peaked, and the F.S.U. turned out the
be the only lasting pleasant surprise.
Which then raises the
following question: Was the F.S.U. recovery real and
sustainable? In 1998-1999 not a single oil expert assumed
that the F.S.U. would suddenly turn around and start
creating supplies again. But then low oil prices created
through the saga of the missing barrels caused the
ruble to collapse. And subsequently high oil prices
created an F.S.U. bonanza, low global prices and unbelievably
high revenues. 67% of the 2000-2003 non OPEC supply
came with the F.S.U.'s oil recovery. Some of this increase
was unlikely due to bad data and some of the increase
was a one time gain.
There has been no significant
FSU exploration yet. It's simply too expensive. And
logistical bottlenecks create some significant limits
to further export growth. So I think it's dangerous
to assume that the FSU growth will continue. In the
meantime the cost to create new oil supply soared.
While conventional wisdom
believes where there's a will there's a supply, real
costs to maintaining flattening supplies soared. Between
1996 and 1999, the 145 Public E&P companies which
were worldwide, spent 410 Billion Dollars to merely
keep their full production flat at about 30 Million
barrels of oil per day. The Big Five, Exxon, Shell,
BP, ChevronTexaco, and Total spent 150 Billion dollars
between 1999 and 2002 to barely grow production from
16 billion barrels of oil a day to about 16.6.
The Big Four, excluding
Total, because there numbers weren't out yet, between
the first quarter of 2002 and the first quarter of
2003 went from 14 million, 611 thousand barrels of
oil equivalent per day to 14 billion 544. These four
companies spent collectively over 40 billion dollars
over a 12 month period of time actually lost 67 thousand
barrels a day of total production. So while people
were assuming costs would fall the cost to stay in
the game went through the roof.
One of the other interesting
mantras of the last decade was that technology had
eliminated dry holes. Well we never came close to obsoleting
the dry hole. The reason dry holes dropped so much
is we drill far less wells. We also stopped doing most
genuine exploration. Even projects that are called
wildcats today probably 20 years ago were called modest
step-outs. It turns out that now that we look back
with good data it takes four straight dry holes, it
is still a risky business. The U.S. statistics are appalling. Here basically is the table going back from
1973 to 2002 of U.S. exploratory success rates and
their dry holes as a percentage, and this yellow one
going through there is 67% meaning that two out of
three of those failed. We modestly drop the line from
about 75% down to 67% but two third failure rate, we've
just killed building dry holes. The North
Sea exploration,
in appraisal statistics is still basically about 25%
chance of success. Angola, of the major Block 17's has had a string of dry holes. Eastern
Canada's recent statistics have been troublesome.
The Caspian Sea, other than one great discovery, potentially has been
bad. And even the Middle
East is starting
to dig a remarkable string of dry holes. The single
biggest reason that this supply surge that so many
people assumed was happening for so long was that depletion
became the missing link. The reason supply flattened
out or peaked was not the lack of effort and no new
technology. The industry in fact had many great successes
over the last decade. But they were not about to offset
depletion. Oil field technology created not an easy
way to grow supply but a depletion rat race. Smaller
new fields were found, technology allowed them to be
commercial but we raised the climb rate to an amazing
level and therefore it began to flatten out.
Why is oil depletion
so hard to grasp? Well the definition by itself is
hard. Many would hear the term depletion and assume
it meant that we ran out, and we obviously never ran
out of oil. Depletion data was sketchy at best. Its
amazing how hard it is to actually dig out statistics
for, even on a field by field basis, what the net decline
is. And the elusive data that you can find is not real
depletion but it's actually the net decline after lots
of additional drilling and money is spent to take a
natural decline rate that would have been far more
drastic if you flattened out. And finally no one really
likes to discuss it much because it should generally
mean bad news.
Forecasting next year's
decline still remains an art form. I don't think anyone
has ever been very good at predicting bad news. There
are many ways also to slow natural decline, but it
takes money and effort, and it's only when you look
back, after these remediation efforts have been done
that it creates real depletion answers. But let me
tell you that as you all know, wells, fields and basins
really do deplete. Our firm a year ago conducted a
very intensive analysis of what was happening to the
natural gas supply in Texas by examining the detailed
records of the Texas Drill Commission from 50% of the
state's production in 53 counties. What we found was
amazing. What we found was that in this 53 county area
(this is 16% of the U.S. gas supply) the wells drilled
in 2001, 2400 wells out of 37,000 wells that are in
production created 30% of the total supply, and it
turns out that 7% of these 2400 wells, 167 wells, created
49% of the supply and the other 93% of the wells created
the remaining 51%. These giant 167 gas wells - a year
later, we went back and tested their January 03 production;
they had suffered a decline across the board of an
average of 82% in a year, so wells do decline rapidly
these days. The Cruz Beana field in Columbia, the biggest find in the Western Hemisphere since Prudhoe Bay, in 1991-92 it was
still estimated that it could possibly exceed Prudhoe Bay or Hatchet. But it turns out that this field basically
just barely gets 500,000 barrels a day. And in 2002
it's struggling to stay above 200,000 barrels a day.
The Forty Field, which BP just recently sold to Apache peaked at approximately 500,000 barrels a day in the
middle eighties and the oil production is now under
50,000 barrels a day. It still produces about 500,000
barrels a day of fluid, but the balance is processed
water.
And then you finally
have the interesting graph, that's in the papers that
I think you should have of the last two Super Giant
fields ever found. Ironically these two fields, Prudhoe Bay and Samotlor, were both found in about the same crust
underneath of the Arctic
Ocean. They
were just found on two sides of the earth. Both were
basically found within twelve months of one another, '68
and 1967, both were presumed to have 15 to 20 billion
barrels of oil. It's interesting to see that Prudhoe
Bay, says Platt's Oil reservoir management, they basically
choked off the field at 1.5 million barrels a day and
for over 11 and almost 12 years, like clockwork, it
produced 1.5 million barrels a day without missing
a beat. But in late 1989 the field rolled over and
is now producing about 350,000 barrels a day. Samotlor
[Russia] had just the opposite experience. They basically
started aggressively water-flooding a very wide field
and it produced peak production at about 3 and a half
million barrels a day and then came off like a water
fall and is again down to 325,000 to 350,000 barrels
a day. And so when giant fields do peak they basically
also do decline. There's no question that when you
take 50% of a remaining resource you tend to alter
peak. What is difficult though is to obtain the right
data to know whether you've reached fifty percent.
And it's basically that you're looking back through
events with hindsight. It turns out that total energy
resources, uh, is still a mystery. And recoverable
percentage of resources is also largely a function
of cost. The higher the cost the more you can extend,
recovering more and more of the harder and harder to
get resources.
And it's also interesting
when I think back on this that the technology to gauge
resources, absent of seismic, is still effectively
100 years old. We have no better technology today to
know how much resources are there before seismic is
done than we had 100 years ago. And even after a few
of them test their research you still leave many questions
and so it's based on opinions. Let me give you some
interesting examples of the uncertainness of this data.
I attended a Natural Gas Workshop in Washington, D.C. about three weeks ago and the head of the U.S.G.S.
made an interesting presentation about how hard it
is to basically get experts all on the same page even
when you have a complete set of data. One of his examples
was the [unintelligible] basin in Argentina.
Two hundred and nineteen
mature fields. They had a data set that allowed all
of the experts to basically use any one of the 7
conventional methodologies to say how much remaining
resources are
there. And after a weekend of study the estimates
came back with a low of 600 million barrels to recover
to
a high of 17 billion barrels. This is on a mature
field area with 219 individual fields. Canada's recent experience in Sable Island is a classic example of how little you sometimes know even
after the fields have been in mature stages of production.
It
turns out that Sable Island looked like a fabulous
project through wells one through five, and then well
six was
drilled and they found basically it was little, they
miscalculated the amount of reserves and so thirty
seven percent of the proven reserves of Sable Island
in the last few months were written off. The Leaden
Field, which is the largest project in U.K. sector of the North Sea last year; six months into its production the company
had new data that basically highlighted the reserves,
the reservoirs
complexity so that half the reserves were transferred
from proven into probable.
And then another interesting
presentation in the natural gas workshop in Washington
was on center basin gas which basically pipes gas in
the Green River basin where some new evidence would
indicate that we've overstated potential recoverable
reserves by three to five times.
All of which highlights
how difficult it is to basically get your hands around
how much is left until you're looking back at events
with hindsight. Hindsight turns out to be a wonderful,
unreliable tool. Some events are unpredictable until
after the fact. Some of the classic unpredictable events
turn out to be weather, death, one's peak net worth
and maybe the future of anything important. It turns
out that peaking even for an individual well is only
proven after the fact. And predicting peaking of energy
has been an elusive art form for a long period of time.
So back to the United States of America and our experiences in oil as a classic example of
how hard it is to predict peaks. In 1956 Dr. Hubbert
predicted in the early seventies... in the early seventies
the United States would peak. In 1970 it was obvious he was wrong when
the U.S. set a new record, the new U.S. peak. In 1981, what had been 9.6 million barrels by,
at its peak was already down to 6.9 million barrels
a day after a record drilling boom. And by 2003 this
9.6 billion barrel basin in 1970 is now close to 3
million barrels a day. The U.S. was Saudi Arabia in 1956. We had great statistics, we had total transparency
and yet only one person predicted the peaking in 1970.
Did the United States get a lot smarter? Well the U.S. Natural Gas experience
is a great new case study.
In 1999 the Natural
Petroleum Council projected that supply growth in natural
gas would be adequate to increase gas use by 36% by
2010. In 2001 we had a record drilling boom for Natural
Gas. This failed to budge supply. In 2003 natural gas
clearly faces a crisis. The United States and Canada is in decline.
What we all missed in
1999 was that no one could come to subtract unconventional
supply growth, coal bed methanes, tar sands, deep water
associated gas, and these giant gas wells down to 18
to 20 thousand feet vertical, from the conventional
base, and discovered conventional base at about fifty
feet... (unintelligible) [p]eaked
through Europe in the nineties and is now approximately 35 BCF (Billions
of Cubic Feet) a day. So it turns out the United States
gas experience, uh, has experienced about the same
phenomena that oil did 30 years ago.
The North Sea experience is interesting. The North Sea had all the worlds' best operators, state of the art technology. Its
peak was assumed to be years away in 1996 and 97. In
1999 the U.K. Sector peaked. In 2002 the New Eastern
sector peaked. The North Sea has the world's best field by field production data. Seeing peaking
is easier in the North Sea than anywhere else but few people seem to study the data. Peaking, it
turns out, even in the North
Sea is easy
to ignore. And then there's the experience of the Caspian Sea.
In the early nineties the Caspian seemed to be the
next Middle East.
In 2001 we had 20 out of 25 dry holes that dampened
the enthusiasm for the Caspian significantly. In
2001 Kashagan was finally discovered, deemed to be
the greatest field in the decade. In 2002 BP and
Stat Oil quietly sold their 14% of Kashagan for 800
million dollars. In 2003 British Gas put their 17%
on the block for 1.2 billion dollars. Which
raises, in my opinion, the question, "What do these
original parties know about the world's greatest
field or do they merely want to spread the wealth? I
think what this all means is that non-OPEC oil, particularly
outside the Soviet
Union,
is either peaking as we speak, or has already peaked.
Any serious analysis
now shows solid evidence that the non-F.S.U. non-OPEC
oil has certainly petered out and has probably peaked.
F.S.U.'s supply is suspect or should be. A new frontier
is always a possibility but it is becoming increasingly
unlikely now that deep water is basically here and
come and gone.
And serious energy planners need to assume non-OPEC
supply is at a plateau. But thank heavens
for the Middle East.
The big non-Middle East OPEC producers are also past
the peak. Algeria and Libya could
probably still grow but they're too small to offset
everyone else. And only the Middle East can
logically be explained to replace declines elsewhere.
The Middle East's transparency is an oxymoron but there are some data
that shed some light. And so let's basically spend
a few minutes looking at the Middle
East, the Promised Land.
Middle East energy
is the Promised Land. All roads the roads lead to Rome and
to the future of oil and gas Rome is
the Middle
East.
The Middle
East is where we still have abundant reserves. It's still
cheap to produce; it's still extremely unexplored.
So if the rest the world is long in the tooth thank
Allah for Mecca. But are we so sure this
is the truth? It turns out that the Middle East oil
and gas so far is not all over the
Middle East. The Middle
East covers
an enormous land mass, but all of the oil and gas
as we know it today is compressed into an interesting
golden triangle. And all the great finds happened
years
ago. In the past three decades exploration success
has been modest in the Middle East abyss. Is this because no one looked very hard or
because there's not much else to find? Here is the
interesting golden triangle of the Middle East; If
you start at Kirkuk in the north and you draw a line
down through the great oil fields of Iran, going
down south and come over six or seven hundred miles
picking
up the great fields of the UAE and come back up 800
miles to Kirkuk virtually every field of any size
between 1909 and the late sixties is probably in
that basin.
It turns out that Saudi Arabia has what they thought was a fabulous discovery outside
that in 1989. By 2003 one field
and five satellites needed gas injected to create
flows
to get about 200,000 barrels a day. So it's
also interesting to take the United States and superimpose this same golden triangle on part
of the United
States on
the part of the United States I grew up in. It basically covers most of Arizona and part of Utah, so it's not a very big area. So if
all roads lead to Rome then one area, Saudi Arabia, is clearly home port. Saudi Arabia became the most important oil exporter once the U.S. peaked. Though also not trusted, Saudi Arabia has constantly tried to become the world's most trusted
supplier of oil and they generally have done that. Saudi Arabia has assumed a virtually limitless amount of cheap
oil. But let me tell you about some of Saudi Arabia's oil and gas challenges. In Saudi Arabia there have been no major exploration successes since
the late sixties. Almost all of Saudi's production
comes from a handful of very old fields. Almost every
field has high and rising water pressure. Ghawar,
the world's largest field injects seven million barrels
a day of seawater to prop up reservoir pressure.
And
outside North Core hundred barrel [unintelligible]
have been very hard to find. Some key fields have
never worked out. Others have now watered out. And
it takes
utter logic to plan for Saudi Arabia's future.
What Saudi Arabia's real energy costs might be is that Saudi Arabia is probably no longer a low cost producer. Lifting
costs, plus, may now rise exponentially. Natural gas
parting costs are extremely high and have been elusive.
But what is Saudi Arabia's right price for oil? I would argue that no one really
knows because we lack the data.
But it turns out with
a little bit of hindsight that the optimists turned
out to be wrong. While the optimists estimate, the
economist rectifies, the debate still rages on; the
jury basically has now rendered the verdict. The optimists
have lost. Too much field data now proves their total
thesis was wrong. Supply never surged, demand did grow.
But as it grows it still falls. This doesn't prove
though that the pessimists were right. The pessimists
unfortunately and ironically might also be wrong. Most
serious scientists worry that the world will peak in
oil supply. But most assume that this day of reckoning
is still years away. Many also assume that non-conventional
oil will carry us through several additional decades.
They were right to ring the alarm bell. But they too
might also be too optimistic. Non-conventional oil
unfortunately is too non-conventional. Light oil is
easy to produce and convert into usable energy. Heavy
oil is hard to produce and extremely energy intensive
and very hard to grow rapidly. It turns out the United
States of America has nine fields left that still produce
over 100,000 barrels a day. And three of the nine have
turned out to be located in California and
on average are 103 years old. The reason these fields
are still there is that they're very heavy oil. And
heavy oil can last forever but it's very hard to get
out of the ground. And it takes a remarkable amount
of energy to convert heavy oil into usable energy.
Five years ago I barely had thought about the question
of, "What does peaking mean and when might it occur?" I
was intending at the time though to study the concept
of depletion and the phenomenon that field after
field was tending to peak fast and decline at rates
that were unheard of before. The uh, uh, I think
basically that now, that peaking of oil will never
be accurately predicted until after the fact. But
the event will occur, and my analysis is leaning
me more by the month, the worry that peaking is at
hand; not years away. If it turns out I'm wrong,
then I'm wrong. But if I'm right, the unforeseen
consequences are devastating
But unfortunately the world has no Plan B if I'm right.
The facts are too serious to ignore. Sadly the pessimist-optimist
debate started too late. The Club of Rome humanists
were right to raise the 'Limits to Growth' issues
in the late 1960's. When they raised these issues
they were actually talking about a time frame of
2050 to 2070. Then time was on the side of preparing
Plan B. They like Dr. Hubbert got to be seen as Chicken
Little or the Boy Who Cried Wolf...
In 1957 the Sputnik
woke up to the rest of the world. By 1969 we had a
man on the moon. That was not easy, but the job got
done. Could an energy Sputnik create a similar wake
up call? If we had such a wake up call is it too late?
Is there a Manhattan Project or an Apollo program that
would work? It turns out that reliable energy is the
world's number one issue. Creating reliable and affordable
energy opens the door to solving the problem of the
world's water, food, and healthcare. Without reliable
energy all these other needs dull.
The world is still growing.
There five billion people on the earth today that are
still either maturing in age or yet to be that old.
And five billion people still use little or no energy.
If the world's oil supply does peak, the world's issues
start to look very different. Thank heaven the debate
began even if it might have been too late. Thank you.
I'd be happy to answer any questions.
Questions and Answers (not verbatim)
Hi. I'm Steve Andrews.
Given your message now and given that you've had a
half hour in the Oval Office with president Bush, why
is there such a disconnect between the apparent policy
of the administration and the harsh reality of the
message you just gave this audience?
A. I think that there
are people within the Bush Administration including
the President and Vice President... I think it was
unbelievably discouraging to see what occurred after
the Bush Energy Plan was introduced .... And then after
9/11, the administration got totally distracted in
dealing with all the events that they've been dealing
with since then. I will tell you that there is a growing
genuine concern in Washington about what is happening with natural gas today.
Q. I've been reading
your papers for the last two years, and I want to congratulate
you on really good work, and in many cases it's work
that I would have expected from a gas company, not
from an investment banker. Last year, you defended
the administration's concept of depletion...and you show
a real genuine concern for the future of the world,... and
the hydrogen proposal is really a fantasy, don't you
think it is time for a more enlightened energy policy.
A. That would be
wonderful but I think that it is going to take a while. There
really aren't any good energy solutions for bridges,
to buy some time, from oil and gas to the alternatives. The
only alternative right now is to shrink our economies. This
is a tough question and I have no answers.
Q. I know that you
are on the books to bring back nuclear power back into
the industry.
A. Positive news. The Yucca Mountain is not complete. We have to figure out how to remove
the nuclear waste. The bad news is that we have had
one bad accident in Ohio and one in South Texas in
which they found some borax acid that had become powder...is
this a defect in the Westinghouse design. These are
things which could set nuclear back 5 to 10 years.
Q. Mike Ruppert,
From The Wilderness -- In the Baker Institute-CFR Report
from April, 2001, you were kind of dissenting and you
called for a Manhattan Project-type investment, what
would that entail?
Q. Second question – In
the war on terrorism since 9/11, we have gone to Afghanistan,
and we've seen some pipeline development across Afghanistan,
we've seen Iraq, now Saudi Arabia, developments in
West Africa, also in Colombia where the terrorism coincidentally
seems to appear exactly where the oil is or in the
swing producing nations, do you believe that is all
coincidental? (Laughter)
A. (More laughter) Those are
pretty intelligent questions. What I encourage people
to think about in terms of energy blueprints is to
think about them in terms of the Marshall Plan. I
still believe that there is an urgent need for an energy Marshall plan. And
couple that with a water energy program. I don't know
if you can draw any parallels that every place we have
energy we also have terrorism other than just musing
about the fact that all I the last twenty years while
we have apparently benefited from these unbelievably
low bargain basement prices, the prices were so low
that none of the host nations were able to basically
create any semblance of a modern society, and over
a 20-year period of time, all of their populations
exploded, they all have high birthrate, very young
people, and terrible economies. Unfortunately, we
ended up with the door prize that was so low that it
was hard for them to maintain a company infrastructure
and doing nothing to start rebuilding their societies. I
suspect that had they been lucky enough to have had
energy ...two or three times higher and then worked carefully
with these producing countries to be enlightened about
how... instead of putting in some young and powerful
leaders to start creating a middle class... and people
would have started focusing more on how to become more
prosperous. I guess in hindsight that is easy to say.
[FTW Subscribers can read our full
report on the ASPO conference at:
http://www.fromthewilderness.com/members/053103_aspo.html]
AD
GOAL: $100,000
(Donations Received)
Put this ad in the
TOP 12 Newspapers in the U.S.A.
Click
here to Donate to the FTW Ad Campaign
Help reach more
than 40 MILLION Americans and people worldwide!
Read
the Story <Here>. See
the Ad <Here>. Donate<Here>.
