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Denbury Resources Inc. Message Board

  • bigriverdago bigriverdago Apr 24, 2008 2:53 PM Flag

    T. Boone Pickens' "big picture" energy thoughts

    One thing I know for sure, because I've done it, is that you can make money following T. Boone Pickens around the oil patch. He also has a history of successfully getting ahead of the curve regarding new energy trends and technologies.

    I've been and still am tempted to buy the compressed natural gas and infrastructire company he helped found-CLNE-because the concept of using natural gas for transportation makes a lot of sense to me.

    Pickens is slated to meet with the president to discuss energy policy. One hopes he (and McCain) are smart enough to listen carefully, because what the opposition is proposing (raise taxes on the companies we need to produce more)is absurd.

    http://www.newsok.com/article/3234138/

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    • Peter, I very much agree with Intellectual Capital...which is really what the US has been living off for the past 30 years. I'll note that my interest in Nuclear Fission was a stop-gap energy form until something better could be developed. The world "had" about 50 years of Uranium (100% power supply) at the time, and I felt we needed to immediately get out of fossil fuels for environmental and economic reasons...burning that stuff was a terrible waste of resources. My hope was the 50 years would be enough to develope Fast Fission (with reprocessing) and on to Fusion, solar, wind, etc... Of course, I always felt Fusion was Science Fiction. There has never been any reason to believe it can be made economical.

    • Moosebit, Recently my wife and I did a good deed and gained a few goodwill points from two Japanese. We got to know the young tourist couple on the ICE train from Paris to Frankfurt. They spoke no German and limited English, so we decided that they needed our help. They had no hotel reservation and wanted something cheap, so my wife phoned the youth hostel near our place and got them a room. We explained that with their train ticket they could take the S-Bahn from the main station to a station close to the hostel. We got them settled and oriented and during their days in Germany my wife got them complicated train tickets and hotel reservations in another city and, before they flew out, we treated them to a castle visit and coffee and pastry at an out of the way place we knew. We are still in e-mail contact with them.

      Adapting to Japan must be difficult ? Hugh

    • Moosebit,

      You're right if you broaden your idea to include intellectual resources as well. My daughter ends all of her e-mails to family and friends with Sir Francis Bacon's observation:"Nam et ipsa scientia potestas est". You could just as easily say: knowledge is capital. In theory, I guess, we could invent a grain that would be so efficient at converting sunlight to starches and oils that we'd fix the kilocalorie problem. Or we could find a way to get from where we are with solar, which is about 30% efficiencies of devices to 85% efficiency which is what my friends think is the theoretical limit in which case we would be able to say "problem solved" because solar would then be a reasonably cheap source of power.

      At present, however, it is pretty clear that the wealth that is being created worldwide is being substantially turned into consumption and that this consumption is testing the limits of all of the resources that we produce.

      Two articles from the Times:

      http://www.nytimes.com/2008/05/01/business/01econ.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1209643934-zaTwaq2poivoTn7dePb+wg

      http://www.nytimes.com/2008/05/01/business/worldbusiness/01middle.html?ref=business

      Not to rain too much doom and gloom on the board, but this is what you see as a result when competition for resources and jobs in an increasingly international economy favors the low cost producer. Another way to put that is to simply observe that the way that we used to live was an artifact of our partial isolation and we can't live that way any more. There was another interesting article in the Times about a store called Steve & Barry's (Park is right around the corner from where they're building a super-store of some sort.) Their business model is quite a thing to think about.

      They sell clothing designed by celebrities virtually all of which sells for less than $10 per item (including a pair of sneakers designed by Stephon Marbury). They keep all costs that they can as low as they can and they sell products at very low margins to eake out a profit. None of their products, so far as I can tell, are made in the US. So, they are basically using intellectual capital and cheap foreign labor and other resources to produce a profit from large volumes of business. They do provide a significant benefit to society because the net effect of their business model is to reduce or constrain inflation. However, they are clearly part of the problem because the actual consequence of their business model is to make a tiny portion of the US population, the rich, richer and to provide factory work for folks trying to make a step up the ladder elsewhere in the world.

      Regards,

      Peter

    • Its insane. There used to be at least a few senators who had a clue, but they all left. Now its all partisan politics (world wide). Its amazing how little understood the entire basis of world civilization is -- resource utilization. If no resources, no utilization.

      My dollars don't go as far in yen, either. But my portfolio gains over the past few years has greatly exceeded the decline in the dollar, so I'm still ahead -- for the moment.

    • Moosebit, I wonder if the shortage of raw materials, when the news finally becomes common knowledge, will make the subprime scam look trivial? You would think that a lot of governmental money and effort would be spent on education, infrastructure, and conservation to prepare the US for economic changes, but reality seems to be that corruption, political dogma, and stupidity rule. I wait for the day when our government ups military spending to protect the American people from the great danger of an invasion by the forces of San Marino. The media would market such an idea.

      My income in in US $ and my expenses in Euros so I find my useful income on a serious downcurve. Hugh

    • I agree. Of course, I also think its insane to burn oil for anything not absolutely necessary, such as aircraft.

    • A friend who is in the chemical business thinks that NG is so important in producing necessary products (Fertilizer, insecticides, herbicides, plastics, etc.) that it should never be used as mere fuel.

    • Peter, your second point is a very interesting and insightful observation and I think you are absolutely correct. Another contributing factor could be a flight to quality, but clearly the difficulty of raising capital is an issue for many companies that are not well capitalized.

    • One thing can be said about Mr. Pickens--he is not afraid to talk his own book. His observation that we could substantially fix the oil import problem to the US by moving natural gas out of electric generation into transportation simply isn't true. We use a little less than 7 Tcf per year of natural gas in electric generation. That's 3.2 MBOE/day. We import 10 mmbbls. of oil per day and another 1 million of gasoline. >>pddane

      Approximately one quarter of the natural gas used in the US is used for electrical power generation.

      http://www.naturalgas.org/overview/uses.asp

      If 4% of what is currently being used for power generation were switched to run trucks, it would fuel 8% (500,000) of the trucks in use.

      www.cleanenergyfuels.com/pdf/Fuel_Matrix-sp.pdf

      Picken's repeated thesis is that natural gas is too valuable the the greater scheme of things to use to generate electricity when there are other domestic sources available (wind, coal). If just half of the ng currently used to generate electricity were instead used to run trucks, it would provide the fuel for a quarter of the trucks on the road. Another essential point of Pickens' argument is that it's possible to increase domestic ng production.

      In several interviews I've heard Pickens promote a multifaceted approach to addressing energy concerns-wind,coal, biofuels,ng, conservation-and as you say he's talking his own book as he's wetting his beak in all of them.

      We currently import roughly 60% of the oil we use. That means if you cut oil use by 6%, you cut imports by 10%.

      To paraphrase the late Sen. Dirksen, you get billion energy units here and a billion there and pretty soon you're talking a real reduction.

      You reduce imports by 5-10% switching to ng, 5-10% from ethanol, 5-10% from more efficient vehicles, 5-10% from consumer conservation, 5-10% from using more rail and less trucks, 5-10% from better mass transit and it's a real big deal.

    • All,

      (1)Hidden in an energy article "At least 300 B bbls of reported global reserves were imagined" said a retired senior officer of a national oil company. (Many others have said simular things.)

      (2) (For those interested in PGM) South African Q1 2008 platinum production by Anglo Plat. was down 24% due to electricity shortages. This gives a global production reduction of 8%.

      Hugh

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