Pickens was using OPEC revenues between 2003 and 2008 as a model, he said. Those revenues clocked in at $250 billion in 2003, but just five years later they had skyrocketed to $1.250 trillion, five times that of ’03.

“If we don’t do anything,” Pickens said, “in 10 years we will be paying $300 or $400 a barrel for the oil.”

The US is already paying $1 billion a day for crude, he said, and it accounts for two-thirds of the country’s trade deficit. That doesn’t need to happen, though. If the US used its own resources, Pickens thinks the move would lead to job creation, and those dollars would stay at home.

That’s why he’s so bullish on natural gas, a fuel that’s plentiful here in the US. So much so that Cramer called Pickens “one of the biggest boosters of natural gas out there.” But he endorses more than just that one commodity. As part of the Pickens Plan he announced back in 2008, he called for the utilization of all kinds of energy – wind, electric, even ethanol – as long as it was American.

“Anything but OPEC oil,” Pickens told Cramer. “That’s what I don’t want.”

But, of course, today’s discussion was largely about natural gas, as President Obama this week put the full weight of his office behind the commodity during a speech at Carnegie Mellon in Pittsburgh. Pickens took the statement to mean President Obama finally understands that nat gas is the US’s only viable competitor to diesel fuel, that nat gas is both cleaner and cheaper than crude and coal.

“And it’s ours,” Pickens said. “We’ve got to use it.”

To that end, he fully expects the NAT GAS Act presently in Congress to pass. He said Senate Democratic Majority Leader Harry Reid, of Nevada, told him he wanted an energy bill this year, Pickens said, “And that’s going to happen.”

If so, it’s about time. As Cramer pointed out, the major oil and gas companies – especially foreign firms – already have recognized natural gas’ importance, and they are buying up both smaller players and assets here in the States. Royal Dutch Shell joined in on the action just this week, paying $4 billion for a chunk of the Marcellus Shale.

But Pickens sees that as a good thing.

“The majors are moving back into the United States,” he said. “I want them back. I want them spending money here. They will figure out a way to get more recovery out of the shale gas.”

He hoped the majors would call for the use of natural gas in all transportation vehicles. Compared to the diesel being used now, nat gas is incredibly cheap. One thousand cubic feet of gas will do the same work for an 18-wheeler truck as seven gallons of diesel, but the gas costs just $4.50 per MCF while the diesel fetches $21.

“It is a steal for America to switch our heavy-duty [vehicles] over to natural gas,” Pickens said.

The conversation also touched on BP’s spill in the Gulf of Mexico. When Cramer asked what Pickens might do if it were his well that burst, he said that the company and the Coast Guard should be left alone to fix the problem. Any investigations into wrong doing should be held until after the well is sealed.

Pickens also said that a relief well was the only real solution that would work, not the “top kill” or any of the other ideas BP has tried so far.

“The relief well’s the only way you’re going too kill this well,” Pickens said, “unless you got lucky and somehow that it bridged and shut off.” But the chances of that are “one in 100 or one in 1,000.”

But Pickens doubted the relief well would be ready before August, “if you’re lucky.”

WATCH THE VIDEO:

SOURCE:
CNBC.com: “Boone Pickens – Get Ready for $400 Oil?”

The report states that the increase in gas discoveries and production improvements means that North America could have natural gas supplies for up to 100 years.

In the May edition of Casey Energy Opportunities, Dr. Marc Bustin provided an overview of the situation.

In the United States, the tremendous growth in natural gas resources and estimated recoverable natural gas, particularly from gas shales, just in the last two years (Figure 1) is sending tremors through the entire industry. These tremors include the risk of making obsolete the proposed $26 billion Alaskan and $16 billion northern Canadian pipelines to tap northern gas resources and a slue of proposed LNG terminals… unless they are for export!

The numbers currently kicked around are that something around 2,000 trillion cubic feet of gas are technically recoverable in the United States. At current production rates, this supply would last about 90 years.

According to a new study by energy consulting firm CERA (Cambridge Energy Research Associates), new technologies for unconventional gas fields are being applied so successfully that supply is essentially no longer a driver in either production or price in the North American gas market – whatever the market wants, North American gas fields can supply. CERA reports that natural gas production in the Lower 48 states has risen a startling 14% from 2007 to 2008, for example.

Figure 1. Major shale areas or formations in the U.S. and the estimated recoverable natural gas in 2006 and 2008. Modified from Daily Oil Bulletin (May 4, 2009).

Over 50% of natural gas consumed in the United States today is from wells drilled less than three years ago, and 25-30% of the gas produced today comes from wells drilled last year (Figure 2).

Hence it follows that if there are 50% fewer wells drilled this year (from the drop in rig activity), new production will decline about 35-40% by the end of the year, so there will be gas shortages. Those will in turn lead to higher North American prices, which in turn should lead to additional drilling.

Figure 2. Historical gas production in the U.S. showing the percentage of production from vintage of well (modified from Chesapeake April 2009 Investor presentation from original data of HIS Energy)

Everything else being equal (which it’s not, this being the real, not the mathematical world), gas prices and drilling will see-saw until an equilibrium is reached. In detail, of course, things are more complicated, but it is pretty clear that gas prices will have to rise within the year, and the big losers will remain the more expensive plays that require higher gas prices to be economic.

The real opportunities are not found by simply “investing in energy” but rather by taking the time to understand the structural differences within the energy complex and who the players are. Once one does that, they could cherry pick the special situations that invariably exist in a sector this large. Junior oil and gas exploration companies that are present in the Haynesville Shale and Marcellus Shale are ideal for investing in energy- natural gas.

Posted by: C. Keddy

What’s an environmentally responsible source of clean energy that is available in America today that can eliminate our dependence on foreign oil? It’s natural gas, and it’s ready for its close-up. Natural gas reserves are abundant in the U.S. and I believe they’re key to cutting dependence on foreign oil and to powering our economic recovery.

Natural gas is America’s second largest energy resource, behind coal, and a vital component of our energy supply. T. Boone Pickens and other energy industry experts believe that domestic natural gas reserves are twice that of oil, and new discoveries of natural gas, such as what we are seeing in the Haynesville Shale, are adding to existing reserves due to the technological advances in shale gas production that have created more prolific wells. We currently have an oversupply of natural gas despite a 56% reduction in the number of rigs drilling for natural gas to 700 from the September peak of more than 1600.

In addition to being a domestically abundant and secure source of energy, the use of natural gas provides many environmental benefits over other energy sources, particularly other fossil fuels. Many Americans depend on safe, efficient and clean burning natural gas to heat and cool their homes. Natural gas fuels many manufacturing and electricity generation plants, and is a key ingredient in many products that we use every day.

Today, natural gas is one of the most commonly used sources of energy in the world. Its benefits are enjoyed by over 60 million people. Many homes use natural gas for heat as do schools and hospitals. Many stoves and water heaters use natural gas too. Industry is the biggest consumer of natural gas, using it mainly as a heat source to manufacture goods. Factories are burning natural gas to make products like paper and cement. Natural gas is also an ingredient in paints, glues, fertilizers, plastics, medicines, photographic film, ink, glue, plastics, laundry detergent, and insect repellents and many other products. Synthetic rubber and man-made fibers like nylon also could not be made without the chemicals derived from natural gas.

The Council for Responsible Energy survey established that 60 percent of Americans feel that natural gas is an environmentally friendly energy source. Fifty-one percent agree that using the gas in a home gives superior comfort and performance.

U.S. oil consumption averages more than 20 million barrels a day and Americans spend more than $500 billion on energy bills annually, according to Beacon Equity Research. I believe that as more U.S. firms discover smart ways to access fuels domestically, those numbers could drop–helping to stabilize energy costs and to keep jobs in America. Let us work together to ensure that Americans have access to low cost energy free of geopolitical rancor.

Follow Michael J. Newport on Twitter: www.twitter.com/Vorticom

New and plentiful natural gas resources in North America should dramatically change the energy and climate debate in Washington. The Potential Gas Committee, a non-profit academic organization, recently released the latest in a string of authoritative reports confirming the abundance of natural gas in North America. Thanks to new gas field discoveries, the U.S. has a 100-year supply of natural gas that is growing with new technology.

Over the years, the United States has become more and more dependent on energy sources from volatile regions, raising national security concerns about our reliance on energy sources from outside our borders. The Center for a New American Security, a non-profit, non-partisan national security research organization, writes in a new report that “two-thirds of all oil reserves are in the Middle East, where instability and hostility to the United States run rife and can threaten economic and national security.”

Natural gas can lead to domestically produced independence and because it is more than 50 percent cleaner than coal, it is better for the environment and can serve as the foundation for power generation and the expansion of renewable energy sources. The New York Times recently said that “natural gas could emerge as a critical transition fuel that could help to battle global warming.” And because 98 percent of natural gas consumed in the United States is produced in North America, increased use would result in more jobs and economic growth.

“Securing our nation’s independence did not come easy and neither will significantly reducing our dependence on energy from outside our borders but with innovation and new natural gas discoveries, America’s clean energy future can be made right here in America,” said Rod Lowman, president of America’s Natural Gas Alliance. “Natural gas is clean, abundant and ready now to power our homes and automobiles today and for future generations.”

America’s Natural Gas Alliance (ANGA) is a new organization representing 26 of the nation’s leading independent natural gas exploration and production companies. ANGA members are dedicated to increasing the appreciation of the environmental, economic and national security benefits of clean, abundant, dependable and efficient American natural gas. Learn more about ANGA at www.anga.us.

SOURCE: America’s Natural Gas Alliance

Posted By: C. Keddy

Pickens, who is promoting a plan to boost investment in wind power and natural gas to cut U.S. oil imports, said at a Calgary appearance that he sees little need for Alaskan gas given massive shale gas discoveries in the Haynesville and Barnett shale plays in Louisiana,Texas and elsewhere. “All the proven gas on the Arctic coast is 39 (trillion cubic feet). That’s not as much as you have in the Barnett shale,” Pickens said at a Calgary speech. “I don’t think a pipeline from Alaska through Canada to the lower-48 makes sense.”

Alaska has 39 tcf of gas, way up in the North. Haynesville [in Louisiana and Texas] has potentially 70 tcf of gas [close to the market], so where would you be going to get the natural gas??
Posted by: C Keddy

Source: LNGpedia

The Senate bill represents a compromise between Democratic members seeking to reduce energy use and global warming emissions and Republican members intent on increasing production of oil, gas and nuclear power. The Senate bill represents a compromise between Democratic members seeking to reduce energy use and global warming emissions and Republican members intent on increasing production of oil, gas and nuclear power.

The Senate energy bill includes:

– funding for clean energy technologies
– training for workers in new energy-related industries
– the bill calls for expansion of the nation’s stockpiles of petroleum reserves to deal with sudden shortages or price hikes
– provides federal guarantees for carbon capture &storage programs and encourages a resolution of the problem of storing nuclear waste
– the bill trys to resolve conflicts over the placement of electrical transmission lines
– provides authority for federal agencies to ensure the security of the nation’s electrical grip

The committee released a summary and analysis of its proposal.

RELATED LINKS:

Senate Advances Comprehensive Energy Bill

Senate Energy Bill: Love It Or Hate It?

U.S. Senate panel approves comprehensive energy bill

Senate energy bill on tight timeline

Senate Passes Energy Bill

Posted By: C. Keddy