Energy legend T. Boone Pickens' father once told him, "a fool with a plan can beat a genius without a plan any day."
In the video below, Pickens tells Motley Fool contributor Jason Hall how America's lack of a consolidated energy plan, or even a single federal entity to handle energy policy and decision making, has led to an expensive and complex process. One that has real and lasting impacts on every American, including our men and women in the military, and the financial costs of providing security to parts of the world where oil is found.
Check out the video, or read the transcript below, for Pickens' thoughts on this important topic.
Jason Hall: If you could, talk a little bit about the disjointed way our government functions, when it comes to energy. Thinking of the Keystone XL Pipeline alone; how many government agencies would have an involvement in that? I think that's a good example.
T. Boone Pickens: Energy in America, there's no office that you can go to and talk to them. You say, "Well, the Department of Energy." Well, the Department of Energy, they spend most of their time managing nuclear facilities in the United States.
Is it a government agency that has a purpose? I'm not sure. If you go back and see the charge for the agency, I believe that the Department of Energy came into existence in '78, in the Carter administration. Their primary charge was to get off of imported oil -- "As best you can, come up with a plan." I've never seen anything come out of the Department of Energy.
But now we come down to the Keystone Pipeline, look who's going to make the decision on the Keystone Pipeline. The State Department, because it's from Canada to the United States. It's an international crossing, so the State Department has the issue. Well, they can't make the decision. They struggle with it.
But now if we export oil, then we're talking about that because we have a lot of light sweet crude, and our refineries have been ... not rebuilt, but they've gone to ...
Hall: They're set up to handle the stuff out of the Middle East, right?
Pickens: Exactly. Heavier crude, dirtier crude. Venezuelan crude comes in, we process it in the United States. So, we have a lot of light sweet that's available and now we're talking about exporting that. Well, that decision, I'm told, will be made by the Commerce Department.
So you say, "Who is it that has the responsibility for managing oil and gas imports, exports, reserves, what have you?" It goes around the curve. There's no plan, is where you find yourself.
Hall: Right. That doesn't even take into consideration our foreign military interests, that exist in a lot of ways to protect oil assets for other countries.
Pickens: If you go to Washington and talk to some of the Senators, I say, "Look, you ought to get on your own resources, and we have an abundance of resources in America -- they just need to be reviewed, looked at, decide how you're going to manage -- but all the heavy-duty trucks should be over to natural gas because, one, it's 20-30% cleaner, it's cheaper, it's domestic ... it's ours."
They say, "No, that's picking winners."
Picking winners? Hey, look at the Mideast. Fifth Fleet is there, protects the Straits of Hormuz. Fifth Fleet, United States -- you're protecting the oil shipped out of there for a cartel. OPEC is a cartel. Here the Fifth Fleet is, protecting a cartel's oil.
Seventeen million barrels a day comes through the Straits of Hormuz. How much of that comes to the United States? Ten percent -- 1.7 million. Where does the rest of the oil go? China. Europe.
I ask them at the Pentagon. I say, "Gosh, can't we charge them for protecting the oil to go to China and to Europe?"
They said, "Yeah, you can charge them. They won't pay you."
Okay. Why do we do that? Why are we the nice guy -- or the stupid guy, I don't know which -- to do that? Because if you put the cost of the Fifth Fleet on the oil that comes to us from OPEC ...
Now, not all OPEC comes from the Mideast; Nigeria, Angola, Venezuela, are all OPEC countries. But nonetheless, if you put the cost of the Fifth Fleet on there, now we have really expensive oil.
Hall: Right, and that's something that I don't know that everyone necessarily considers, but that's a real cost.
Pickens: It is a real cost.
Hall: It's absolutely a real cost.
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