Billionaire hails natural gas
By Joe Napsha
Published: Thursday, Nov. 17, 2011
The price of oil rose above $100 a barrel on Wednesday, the first time in four months, and Texas billionaire T. Boone Pickens continued to push the "Pickens Plan" -- to exploit natural gas from the Marcellus shale and other fields to achieve U.S. energy independence.
"Shale gas is really going to save our backside," Pickens, 83, told 2,500 natural gas industry participants at the Developing Unconventional Gas conference in the David L. Lawrence Convention Center, Downtown.
"We could pull up a seat to the big energy table" where the United States previously had no chair, Pickens said. Gas trapped in the nation's shale and tight sands totals 4,000 trillion cubic feet by some estimates, he said.
Pickens was the keynote speaker at a conference that attracted industry leaders such as U.S. Steel Corp. CEO John P. Surma, Consol Energy Inc. President Nick DeIuliis and Atlas Energy LP CEO Edward E. Cohen. Speakers stressed economic opportunities in the exploration and production of Marcellus shale gas, jobs that will be created and the importance of working to minimize environmental impact from gas production.
The industry understands the potential of the Marcellus in Pennsylvania, West Virginia and Ohio; the Barnett in Texas; and Atrim in Michigan, but "Washington doesn't realize what we have," Pickens said.
He personally has invested in production rights on 156,000 acres of land in the Marcellus shale reserves, Pickens said.
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, he said.
The U.S. benchmark oil price rose by 3.2 percent yesterday, ending the day at $102.59 per barrel, the first time since July that oil rose above the $100 mark.
Not only will energy independence slash the amount of money going overseas, it will provide "so many opportunities for our country to develop jobs," said Pickens, arguably the highest-profile oil and gas tycoon in the nation, who is not afraid to offer his sharp opinions on oil and gas policy and politicians.
In Western Pennsylvania, he's also remembered as the corporate raider from Texas whose Mesa Petroleum Co. attempted a takeover of Gulf Oil Corp. in 1983. That resulted in Gulf's merger into Chevron Corp. in 1984, costing Pittsburgh a major corporate headquarters and hundreds of jobs.
For the past three years, Pickens has promoted his plan to end dependence on foreign oil, focusing on the use of natural gas and renewable energy, including wind, water and solar.
Pickens is pushing a bill in Congress aimed at increasing the use of natural gas in vehicles by offering tax incentives to convert gas-powered engines. The subsidies would be as high as $64,000 for trucks and $100,000 for owners of natural gas filling stations.
The bill has bipartisan support, with 185 House members co-signing it, Pickens said. It likely will be attached to an appropriations bill in order to win approval, he said.
The measure, however, has been harshly criticized by David and Charles Koch, billionaire brothers who control Koch Industries Inc. of Wichita, Kan. Their spokesman has said government should not be picking "winners and losers" in the marketplace based on which industries or products it chooses to subsidize, because consumer choice is a better way to allocate resources.
Pickens contended that the Kochs' opposition is on more selfish grounds, because their company already takes advantage of huge subsidies for ethanol production. "They're for the Kochs. They want an energy plan for the Kochs. I want an energy plan for America," Pickens said.
Pickens said that his support in Congress is "solid" and that his plan has a "better than a 50-50 chance of passing this year." If not, he vowed to try again next year.
Pickens said 1.7 million people have signed up to support his plan. "We will be an energy army for the country," Pickens said.
U.S. Steel's Surma said his company is planning to use more natural gas in its steel production, which will reduce operating costs. For each 50 pounds of coke that can be replaced with natural gas as a fuel in steelmaking, the company could reduce its costs by $6- to $7-per-ton of steel. The company intends to "push the envelope" in terms of using natural gas in steelmaking, Surma said.
Consol's DeIuliis predicted that it will increase production in its Marcellus shale reserves to 350 billion cubic feet by 2015 from 150 million cubic feet, excluding the amount of production it shares with a joint venture. Ninety percent of that growth will come from the company's extensive Marcellus shale reserves, with the remainder from the Utica shale play in Ohio.
"Utica (shale) feels a lot like the Marcellus a few years back," DeIuliis said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.