21 Nov 2011

Boone Pickens vs. Koch brothers over U.S. natural gas legislation while oil reaches $100, again

Written by energyscout

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.

Boone Pickens CREDIT: SmartPlanet.com

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.

Charles and David Koch. CREDIT: Sodahead.com

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.


3 Comments to Boone Pickens vs. Koch brothers over U.S. natural gas legislation while oil reaches $100, again

  1. R. L. Hails Sr. P. E.'s GravatarR. L. Hails Sr. P. E.
    November 23, 2011 at 2:35 pm | Permalink

    Consider the situation I have faced a number of times. I am a Professional Engineer with forty years in energy engineering: a score of nukes, two score fossil fuel power plants and more than a decade assessing advanced energy technologies (what is coming, the barriers, the costs, and the risks). A bright young teen, with good grades in math and science, asks me what field to pursue. Should one become an engineer and study: coal exhaust scrubbers, spent fuel reprocessing, robotic drilling, direct diesel injection, solar cells, ethanol combustion, wind generator propeller materials, or permanent magnet behavior?

    Having known hundreds, perhaps thousands of engineers, who were terminated in mid career due to our ever shifting laws and regulations governing energy, and having arranged a few funerals of suicide victims, senior engineers with no work, I have induced certain facts:
    Most employees have zero diversity of income streams. When they are terminated, in mid life, they lose home, family, and any future.
    Mr. Pickens and the Koch brothers are widely diversified (I presume, I do not know any of them.) None will suffer grievously unless our nation collapses. Young people should work hard and emulate them, seek a diversified income.
    No young American should go into any technical field dependent on a reasonable national energy policy. It is non existent.
    Every young American should study Mandarin; it will keep them employed, and perhaps alive, in the next generation.

    A number have listened.

    America’s problem is not uranium, coal, oil, or nat gas. Our survival dependent issue is that China produces engineers while we produce lawyers. Depending on your politics, this is either beneficial, or lethally insane.

  2. David DeCaro's GravatarDavid DeCaro
    November 23, 2011 at 8:18 pm | Permalink

    Gillette used to give away razors that only their blades fit. If their blades produced a bad shave the tactic would still fail but if the blades were good Gillette had a customer for at least as long as the razor lasted. Still, it was their money to invest and put at risk.
    Picken’s preferred approach is to use Congress to mandate that everyone buy a Gillette blade capable razor. If his product is superior enough to justify the conversion of the trucks he can easily finance the conversions and assure himself a slew of profitable customers.
    The Koch’s oppose him not because they need to protect the market for their products-which are in high demand regardless- but because they are Libertarian and despise Picken’s transparent rent seeking.

  3. August 14, 2012 at 9:03 pm | Permalink

    Republicans need to get behind natural gas vehicles and infrastructure or will lose a lot of votes.

    http://ronwagnersrants.blogspot.com/Natural gas is the future of energy. It is replacing dirty, dangerous, expensive coal and nuclear plants. It is producing the electricity for electric cars. It will directly fuel cars,pickup trucks, vans, buses, long haul trucks, dump trucks, locomotives, aircraft, ships etc. It will keep us out of more useless wars, where we shed our blood and money. Here are over 600 recent links for you: https://docs.google.com/document/d/1NbaKYme3bqOw0b6KMxXSjOLHLNeflalPy9gIAiTYFMQ/edit

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