I was disappointed to learn that the U.S. Senate once again has put politics ahead of America’s energy security by blocking the bill to build the Keystone XL Pipeline.
We know that oil prices are cyclical and as surely as Spring follows Winter prices will begin to climb again.
We also know that this oil is going to be used as fuel somewhere — whether it’s in the U.S., Europe or Asia — so refusing to build the pipeline will have no effect on that.
With the Keystone Pipeline we have the opportunity to further reduce our reliance on Middle East Oil. We would be much better off negotiating with the Canadians than with OPEC.
(T. Boone Pickens established “The Pickens Plan” to enhance U.S. energy security, a caused embraced by more than two million Americans who have become involved with the initiative. More info can be found at www.pickensplan.com.)
Faced with a currency crisis, international censure, and falling oil prices, the Russian bear pulled a rabbit out of the hat when the state oil company, Gazprom, signed its second major deal with China.
Chinese customers are a welcome relief. The Russian economy and its energy giants have been swooning under the pressure of low oil prices and the sanctions over the Ukraine crisis. Also on the sidelines of an Asian economic summit meeting, the Russian state bank Sberbank signed an agreement to secure about $2 billion in financing from Chinese lenders, important for replacing European financing cut off by sanctions.
According to The New York Times, “the gas deal is the latest example of the Kremlin’s deft use of pipeline politics. The design of Eurasian pipelines to strengthen Russia’s geopolitical position, sometimes compared to a slow-motion chess match, has been a strong suit for President Vladimir V. Putin since he first took office more than a decade ago.”
Meanwhile after six years, the U.S. has yet to give the Keystone XL pipeline a thumbs up or a thumbs down.
Read more about Gazprom’s new deal with the Chinese.
The following article by T. Boone Pickens ran at Politico.com on November 6, 2014.
I’ve been on both sides of a lot of oil and gas price swings. Every time, the first question people always ask is who wins and who loses.
The immediate answer is easy. When prices rise, consumers pay more, while the oil industry profits. When the market is flooded like it is now, low prices benefit consumers but hurt the oil and gas industry. For the country, there’s good and bad on either side. Lower energy prices means consumers can spend more money elsewhere, and higher prices drive the energy industry to invest and create jobs. Over six decades, I’ve made a lot of bets on oil and gas. During price swings, I’ve seen a lot of money come and go fast. Thankfully, I’ve made more good bets than bad ones, but the most valuable thing I’ve learned about energy is that the long-term costs and long-term benefits matter a lot more than the swings.
The key for America is that we shouldn’t let ourselves get distracted by falling oil prices when there is much more at stake. For decades, our dependence on OPEC oil has dictated our national security decisions and tied us up in the Middle East at an incredible price. We’ve spent more than $5 trillion and thousands of American soldiers have died securing Middle East oil. That long-term cost doesn’t get factored in to the price at the pump, so it is critical that we not let ourselves lose sight of the problem and continue expanding American energy production.
We have OPEC on the run, but we are still dangerously dependent. We have the domestic resources, but we need to demand that Washington get serious about a national energy plan that takes the real costs of energy into account. We cannot get sidetracked by a false sense of enhanced energy security and lower gasoline prices. We need leadership in Washington on the future of the Strategic Petroleum Reserve, the Keystone pipeline and the questions of whether to lift the ban on crude oil exports and whether to expedite natural gas exports. There will always be winners and losers. Let’s make sure we’re winners.
T. Boone Pickens is founder and chair of BP Capital.
Read the opinions of other thought leaders on falling energy prices at Politico.com.