What I Learned About Natural Gas from Boone Pickens

Rich Karlgaard::

Here is what Pickens said:

– Global demand for oil is 86-88 million barrels per day. It will be 90 million by the end of the year, due to global growth.

– Global production is 84 million barrels per day. Since production falls short of demand, prices have risen.

– America consumes 20 million barrels of oil per day. We produce 7 million barrels domestically and import the other 13 million barrels. Of the 13 million barrels of imported oil, 5 million come from OPEC – “nations that hate us,” says Pickens.

– The true cost of Middle Eastern oil is over $300 a barrel if you account for U.S. military presence in the Middle East, according to Pickens.

– “Drill baby, drill” – the conservative mantra to drill more oil from the Gulf of Mexico, off the East and West Coast shelves, and the Alaska Natural Wildlife Refuge (ANWR) would produce an extra 2 million barrels a day at best, says Pickens. The would raise America’s domestic production from 7 million to 9 million barrels but still leave America 11 million barrels short each day.

– In ANWR, the bottleneck is the pipeline from Alaska’s north shore. “It would take 30 years to build another pipeline,” says Pickens.

Well worth reading.

Enterprise remains rooted in the land

Luke Johnson:

Farmers were the first entrepreneurs. About 10,000 years ago, in Phoenicia and Mesopotamia, humankind started to cultivate crops and converted from hunter-gatherers to settlers. This initiative enabled cities and, indeed, civilisation to flourish.
Since then, agriculture has developed into a modern industry. But it remains dominated by family concerns, headed by rural entrepreneurs focused on the same core issues as their ancient predecessors: land, water, weather, disease, soil and yields.
Traditionally, farms were passed down the generations, offering modest but volatile cash returns and the possibility of long-term capital appreciation – at least, for those who were not tenant farmers. But while more than 90 per cent of farms in countries such as Britain and the US remain privately held, big business has become seriously interested in the sector.
The soft commodities boom of recent years means that many institutions now see farmland as an attractive asset class and an offset against inflation. Hedge funds, private equity, pension and insurance groups are all investing in land in places such as Brazil, Ukraine and Africa. This weight of capital, as well as better farm incomes, has helped drive farmland prices up. Meanwhile, demand among these investors for agricultural opportunities in mature economies such as the US, Australia and Canada has also increased.