Transport Topics: Natural Gas Advancements

For this edition of the Pickens Podcast, I went to the vault and pulled out a very interesting conversation between Fred Smith, Founder, Chairman, CEO & President of FedEx, Chris Spear, President and CEO of American Trucking Associations, and me.

Under Fred’s incredible leadership, FedEx has been the pointed end of the transportation fuel spear in moving his heavy-duty trucks from diesel to domestic natural gas. Fred tells us in this interview that FedEx Cargo and FedEx Ground drove 3 billion miles across the United States in 2015.

As I have been telling you for almost a decade, the benefits of natural gas as a transportation fuel are: It’s cheaper than diesel, it’s cleaner than diesel, it’s abundant, and it’s ours.

As one of the world’s largest consumers of transportation fuel, Fred also points out that because of its wide availability, natural gas has another advantage over diesel: It is price stable. Fred told me that just before the recession hit, oil was selling for $146 per barrel. This week oil is selling for about $53 per barrel. It is far easier for a major user to plan ahead when you know that the price of your transportation fuel will be stable.

Fred also talks about the new natural gas engines that are available today that are providing better mileage and cleaner operations, saying a new 8.9 liter natural gas engine from Cummins Westport, Inc. meets Nitrous Oxide emissions standards that are not required by the federal government for seven years.

Some of what you will hear, you’ve heard before, but it’s a great refresher. Much of this is new information you have never heard.

As we move into a new era of the way our Federal government looks at energy and environment, listening to this conversation will be a very valuable use of your time.

Subscribe to the Pickens Podcast on AudioBoom or iTunes, and let me know what you think via Twitter @BoonePickens.

- Boone


Mar 10 2017

How Volkswagen Is Shaping America’s Energy Future

Mar 10, 2017

Volkswagen, the storied German automaker, pleaded guilty today to three felony counts as part of a $4.3 billion settlement reached with the Justice Department in January over the automaker’s massive diesel emissions scandal.

There’s a great deal of irony in this, and a great opportunity for America’s energy security. Here’s why.

Back when President Obama rolled into the White House for the first time, I was in the midst of an aggressive campaign to address the stranglehold placed on our national security and our economy by addiction to OPEC oil.

The crux of that plan was to expand renewables (wind and solar) in power generation, and replace dirtier-burning and more expensive OPEC oil with our abundant supplies of cleaner-burning domestic natural gas in the transportation sector. The overarching goal was to break the stranglehold OPEC had on our economic and national security.

Washington lawmakers refused to foot the bill for America to go down that path. Now, in an ironic twist of fate, with the VW transgression, we have the Germans poised to finance it for us. And we’re fools if we don’t take advantage of this opportunity.

In 2015, the German automaker, Volkswagen, was found to have installed software on its diesel-powered vehicles that provided false emissions data — data that understated the emissions their vehicles were actually producing.

I’ve always been skeptical that diesel can ever burn as clean as alternatives such as electric cars or heavy-duty trucks fueled by natural gas. The lifecycle costs to produce diesel — from production to refining and out of the tailpipe — are just too great. Going to such lengths to falsify emission data just reinforces my skepticism, and my anger.

Since getting caught, the company has agreed to pay fines of $16 billion to settle claims for cheating. These fines will be paid to the U.S. government and shared among the states. In addition, owners of VW vehicles and the dealers who sold them will share in the proceeds.

We’re not talking chump change here. Texas alone, where I live, is set to get $191 million.

This flap once again underscores the need to get diesel vehicles off the road when and where we can, both for air quality purposes and to reduce our dependence on OPEC oil. One of the most toxic emissions produced by diesel engines is Nitrogen Oxide (NOx). It is generated by all internal combustion engines, but a new natural gas engine developed by Cummins-Westport produced 90 percent less NOx emissions than new diesel-powered trucks. That engine is available today.

State regulators ultimately tasked with spending the VW settlement should have some guidance from those with history, experience and knowledge — including industry, independent experts and environmental authorities.

First, a majority of the funds should be used for vehicles which already perform below current federal NOx limits, such as the Cummins Wesport engine mentioned above.

Second, all vehicles performing below federal NOx limits should be treated equally. States should look to decrease the number of diesel-powered vehicles on the road — especially heavy-duty trucks — and replace them with trucks powered by natural gas.

Why not go right to batteries? Because batteries will not move an 18-wheeler, and they cost at least five times more than comparable diesel-powered trucks. So, while electric cars are all the rage, batteries are not a substitute fuel source for over-the-road trucks.

Finally, while there will be justifiable efforts to use these funds on state fleets, it is even more important to find ways to allow private-sector fleets access to these funds. In fact, that’s where the bulk of the money should go.

Keeping in mind this settlement money is coming from a corporation and not the taxpayers, there will be no shortage of ideas from state regulators on how to spend these funds. States should show leadership by not using it solely to upgrade state fleet vehicles.

The reason is simple. If states use this money to replace aging fleets, this will be a “one-and-done” deal. On the other hand, if the money is used to provide incentives for the public and private sectors to purchase new, natural gas-powered vehicles, the positive effects on reducing NOx emissions will be magnified many times over the years.

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Mar 2 2017

Climb Out Of The “We’ve Always Done It That Way”​ Rut

Mar 2, 2017

Listening to President Trump last night deliver his first joint address to Congress – and his commitment to expanding America’s energy renaissance – reminded me of a story.

I’ve been a member at Augusta National Golf Club since August 1982. At Augusta, the club assigns you a caddy, and that guy will be your caddy as long as you live.

I’ve got a great one, Larry, who is highly skilled and always respectful.

One day as I was playing, I asked Larry, “We’ve got the best golf club in the world. Why do we close it in May for the summer?”

Out of character, Larry looked at me, and I could see in his expression that the man he thought was so smart was not so sharp after all.

“Mr. Pickens, that’s the way we’ve always done it.”

I’ve never stomached that kind of answer from any of my employees, but I didn’t say anything more to Larry on the subject.

I thought about this exchange last night, and the stark contrast in President Trump’s address and the comments just the week before by U.S. Rep. Maxine Waters when she threw out some harsh views for the president’s cabinet, calling them “a bunch of scumbags.”

She referred to the president’s supporters as a “Kremlin clan, all of them connected to the oil and gas industry.” The California Democrat was particularly pointed in her criticism of Secretary of State Rex Tillerson and his Russian oil ties.

Prior to his confirmation, I wrote that Rex Tillerson would make a great Secretary of State. And I think he will.

When is operating successfully in foreign countries, as Secretary Tillerson did when he was CEO of Exxon, a negative? It ought to be a positive.

I’ve been in the oil industry for 60 years as it helped America find great success by producing abundant, cheap oil.

Bringing Tillerson’s global expertise to the Washington mindset is a win for America.

I admire that President Trump is making us try something different. I have always believed that it’s important to show a new look periodically. Predictability can lead to failure. I think we’ve seen that in Washington.

Let’s see where some new approaches take us.

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Jan 19 2017

Special Inauguration Edition of the Pickens Podcast

Jan 19, 2017

We went back to six of the most interesting conversations we had for the Pickens Podcast series in 2016 and distilled those visits to our discussions of PEOTUS Donald J. Trump. During this Inauguration Season, I think you’ll find these conversations fascinating:

Former Three-Star General Michael Flynn talked about national security, intelligence, and what he would do about getting better information to the President. This was before he was appointed White House National Security Advisor!

Talk show host Laura Ingraham discussed the rise of Donald Trump and how his common sense connected to voters.

Editor-in-Chief of Forbes, Steve Forbes – a former Presidential candidate himself – talked about how Americans’ “disaffection with the political establishment” opened the door for Donald Trump to come in and “shake things up.”

Businessman Carl Icahn has been named by Donald Trump to be his special advisor to overhaul regulations. During the campaign, we got a glimpse of why Icahn is one of the most important voices in American business today.

Former Senators Tom Daschle and Trent Lott joined me and talked about Donald Trump as a person, not as a personality.

Former Republican National Committee Chairman and Governor of Mississippi, Haley Barbour, told us during the primary season that “anyone who underestimates Donald Trump has been asleep for the last nine months.”

I hope you enjoy listening to the “greatest hits” of 2016 as much as I enjoyed conducting these interviews.

Subscribe to the Pickens Podcast on AudioBoom or iTunes, and let me know what you think via Twitter @BoonePickens.

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