Boone Pickens vs. Koch brothers over U.S. natural gas legislation while oil reaches $100, again
Call it a coincidence but there are undeniable linkages. Crude oil has risen once again is flirting with $100 a barrel. Meanwhile, legendary oilman T. Boone Pickens is ratcheting up his push for legislation that would boost the development of U.S. shale natural gas reserves and deploy the cleanest burning fossil fuel to supplant products refined from oil.
“The alternative is to continue relying on the Middle East for oil, which has cost the United States about $7 trillion since 1976, in return for about 5 million barrels of oil a day,” Pickens told about 3,200 participants at Hart Energy’s DUG East shale gas conference in Pittsburgh Nov. 16.
As U.S. policymakers and the thousands of professionals trying to influence them scramble to make sense of America’s bounty of accessible reserves of shale natural gas throughout Appalachia, Texas, the Great Plains and elsewhere, the opportunities and the challenges facing the natural gas industry grow more visible with each passing week.
But do enough people care? Does Congress have the ability and willingness to act?
The answers to both questions thus far is almost a resounding NO.
“Washington doesn’t realize what we have,” said Pickens,who reportedly has production rights on 156,000 acres of reserves throughout the Marcellus shale gas formation in Pennsylvania.
If the industry can demonstrate how it is safely tapping the reportedly enormous shale gas reserves being produced miles below the surface, getting that gas safely to markets and in the process protecting water resources and the environment, then there might be real movement on Capitol Hill.
Existing legislation in Congress is trying to push the Pickens Plan to a vote but faces an uphill battle. On November 15, New Jersey Senator Robert Menendez, D-NJ, introduced the NAT GAS Act (S. 1863), a bi-partisan, fully-funded bill to help cut oil dependence by jump starting the use of natural gas vehicles in the United States.
Similar legislation, H.R. 1380, has been introduced in the House. It is designed to reduce U.S. dependence on OPEC oil by half in just five years by moving the approximately 8.5 million over-the-road trucks in the U.S. from burning dirty imported diesel to running on cleaner domestic natural gas.
With shale gas development booming throughout much of the U.S., one would think the combined economic and environmental opportunity it presents would be worthy of discussion in GOP presidential debates and garner more attention from President Obama. Instead, the U.S. fiscal crisis, further complicated by the so-called “Super Committee’s” inability to forge a solution, the resulting blame-game and finger-pointing over the failed government solar grant to Solyndra is grabbing most of the headlines.
Sen. Menendez has another Democratic co-sponsor in Majority Leader Harry Reid of Nevada, and two Republican co-sponsors, Saxby Chambliss of Georgia and Richard Burr of North Carolina. In each case, neither the Senate nor the House appears ready to act anytime soon.
One of the hurdles Pickens and his allies must overcome is opposition by the Koch brothers of Wichita, Kansas and the Big Oil philosophy their $100 billion-plus energy and related businesses represent.
In response to a question from a reporter at DUG Eastasserting the Kochs are criticizing the Pickens Plan for needing government subsidies, Pickens said: “That’s easy. Koch Industries imports 61,000 barrels of OPEC oil a day to their Corpus Christi refinery. They’re the third largest recipient of subsidies for ethanol, they’re in the chemical business and the fertilizer business. So everything I do could affect them in some way. They’re against me.
“I know Charles and David Koch,” Pickens continued. “I asked them to talk to me about this subject; they would not do it. They would not return my phone calls. When I was one of their biggest customers in 2005, I heard from them and was entertained in their home in Wichita, but now (they) don’t want to talk to me about it. They’ve gone and tried to peel off all the co-sponsors of the bill that they can. While they knocked out 14 I was getting 16. They spend a lot of money to do this.
“They’re working for the Kochs, I’m working for America. I want an energy plan for America, they want an energy plan for the Koch’s,” Pickens said.
Asked via email to comment, three spokeswomen for Koch Industries declined to respond.
As of November 28, there were 181 co-sponsors to H.R. 1380. Nineteen House members who were co-sponsors have withdrawn their support. You can track the current total here.