Six years after veteran energy executive Boone Pickens introduced the "Pickens Plan," America still does not have a comprehensive national energy plan. Why? Pickens has a one-word explanation: Washington.
"You've got to change some things in Washington because what we're doing is wasting a hell of a lot time," Pickens told me in an interview that covered energy policy, OPEC and politics. "Some business needs to be transacted and it's gotten down to where it's just totally political." Below is a transcript of our conversation, edited for length and clarity:
Lulu Chiang: With the Pickens Plan turning six, is America's energy situation better than it was six years ago?
Boone Pickens: Oh yes. Much much better, can I take you back a long way? We peaked on production in 1970. The United States stood on 10 million barrels a day. Then we declined to about four and a half. We are now back to eight and a half.
In 1973, we had the Arab embargo and everything shut down. Then we decided to fill up the salt caravans in Mississippi and Louisiana with oil to 700 million barrels. We did that. It was a good idea at the time, but totally unnecessary now. The most we have ever drawn out of there was 28 million barrels.
So it's been no emergency, and now we produce so much oil, we don't need it. We need an energy plan for America. We need to look at resources, see what we have, see how we're going to use them and then come up with an overall plan for the country.
LC: In your plan you call for clear responsibility and accountability for energy decisions. What do you mean by that?
BP: There's not any department in Washington where you go for energy decisions. You can go to the Commerce Department if you want to export oil. You go to the state department if you want to build a pipeline. You go to the department of Energy if you want to export natural gas.
There should be a central place for energy, but Washington gets hot and cold on energy. If there's not anything happening then they don't pay attention to it. If we had five dollar gasoline today, oh my God. We would be running around.
LC: So you're saying that it's disorganized given the fact that you have to run to different places for different decision makers.
BP: It's really disorganized.
LC: Another principle of your energy policy is that energy is not a free market.
BP: That's right. The world produces 92 million barrels of oil a day and OPEC produces 30 million. Somebody says, "Well, how do they set the price for oil?" They set it because they operate as a unit. The rest of the 62 million that is produced in the world is not by members of OPEC.
LC: The Pickens Plan lays out these 5 energy principles:
- Clear responsibility and accountability for energy decisions
- Inject real fuel competition into the transportation mix
- Meet our own energy needs before we worry about other countries
- Pursue a North American Energy Alliance
- Remember: Energy is not a free market
Why did Congress and Obama fail to act on your plan?
BP: The Pickens Plan didn't fail. We spent a lot of money. We got it out there and I think that we educated this country to the resources that we have.
But we didn't get what we wanted out of Washington. What is it we wanted? Well it was sold that we were looking for subsidy. No we weren't looking for subsidy. We were just trying to hurry up the process.
LC: Why can't we get anything done in Washington with regards to energy?
BP: You've got to change some things in Washington because what we're doing is wasting a hell of a lot time. Some business needs to be transacted and it's gotten down to where it's just totally political.
LC: Are you frustrated by the experience?
BP: Of course I am. I'm frustrated because I run a business and I could not run a business like the government runs, I can tell you that. You can't run CBS like the government does. You'll go broke, you might last a year, but not any longer than that.
LC: So if we're moving towards the right direction, isn't this making you happy?
BP: It makes me very happy, yes because I'm a patriotic American and I hate OPEC.
LC: Why do you hate OPEC? Do you think our dependence on OPEC is a threat to our national security?
BP: Absolutely, it is. You talk to our military people and they say if you can take out OPEC, you are going to change the dynamics of everything.
Consider Iraq. Now you have civil war. There is no way they will get to 4 million barrels a day of production so crude is going to get tighter in the global market over the next year and consequently the price goes up.
LC: So, what do we do we as Americans to conserve energy because this problem is not going to go away?
BP: What you do in America is you get on your own resources. We have plenty of resources in America. Get your own resources, but when I say that, I am including Canada and Mexico. I would bring North America together. Don't let the Chinese take the Canadian crude. We should absorb the Canadian crude and then we have all of our security is locked down. We have no problems then.
LC: Let's look 30 years out and America has no comprehensive long-term national energy plan. Are we going to be in crisis mode?
BP: There's no question that we have plenty of natural gas. We have a lot of oil too. So for 30 years were covered on that. Now take it out 50 or 100 years, you're going to have to come up with some more. You're going to have to come up with other energy sources. At that point do we go fuel cell? That isn't going to be my problem. That's somebody else's. But they got a good start to get us out to 50 years of energy for America.