Russ: Let's start here. Here we are, first quarter of 2013 and the energy outlook in the United States is incredible. In fact, I can't understand why we're not having a national celebration.
Michael: We should actually sir. You know, it's, uh, it's been about twenty years now that I had a thought and, uh, I articulated a couple of times and I'm not sure I haven't - it has enough traction okay, so my thought has been that energy and energy abundance should actually be the most populist of all issues. It should be a democrat issue; it should not be delegated to the right wing fringes of the Republican Party okay, like some people are thinking. Uh, it shouldn't be any different than the air we breathe, the water we drink and the food we eat okay?
I always tell people look, if you take the energy industry worldwide, you bunch it all together, um, the oil and gas industry, not just - you know, the term energy means silly things like solar and wind and so on but let's - let's talk about the oil industry oil and gas you put them together, it's the biggest economic entity other than the United States. So another words, think of Exxon as one of the twenty largest countries in the world, okay, that's - that's the size of it, all right. And so you look at the energy industry and you say my God, how much more do you want? I mean, you have millions of jobs depending on your industry. The other, uh, day somebody calculated for me that petroleum technology is a - something like a twenty billion dollar a year export industry; technology, okay? I'm talking about well tubulars right now, tools, uh, drilling rigs, technology in general, so I mean that's a huge asset.
>So all of these things, yes, should be cause for enormous celebration and yet you have these, uh, this almost hate relationship towards the industry from large segments of the population by the way. It's hard for me to figure it out because incidentally this doesn't happen in any other country. You exclude maybe France, uh, and occa-some segments in Australia that I - I studied this phenomenon. You look at every other country the energy industry is the pride and joy. Let's take Brazil; Welco Petrobras is a marquis thing, okay? People in your neighborhood think you are a hero, okay, I mean, you're somebody to emulate, okay? You are an Engineer for Petrobras, my God. Um, in China, I mean you're a national hero to be the Vice President of CNOOC - Chinese National Offshore Oil Company. I mean, they are - they recognize the importance of the energy plays in the life of the country.
Russ: I don't - I wonder sometime if here in the United States the general population doesn't understand the importance of energy in the economy; it drives it completely.
Michael: Well, maybe this is another example of why the energy has been so success - so successful to make you think that it's not there, okay? You enter the room, you flip the switch, and in the United States light will come on.
Russ: Every time.
Michael: Okay, every time. There is reliability involved that is energy.
Russ: Absolutely. Well it seems like even in this category of things to celebrate, it seems like at least the fact that CO2 emissions - I mean, from the environmentalists, CO2 emissions are down significantly now. Why can't - why can't - why didn't that come to the front page of the newspaper?
Michael: I think this is nonsense a lot of this stuff but nevertheless, let's even for a moment assume that everything they are talking about is right; so there is - there is CO2 connection with climate change and it's most of it on thermo genic man - man created on it's own; let's - let's get - let's suppose that.
First of all, can we do anything about it? In other words, I always ask people look, does anybody on this earth really believe that there will be economically extractable hydrocarbons on the - on this earth that will not be produced because somehow we passed carbon tax legislation in Washington D.C. or Cambia, Australia? I mean, how silly can you get? I mean you have China, you have India, they're gonna use every - and we'll have whole new atmosphere, I mean come on. So that's one thing. Then, the CO2 - the whole idea of Carbon Dioxide was so, uh, it was the glove that fit. You remember the
Russ: If the gloves fits, you must acquit, yes, yes.
Michael: If doesn't fit you should not convict? Now this glove fits very, very well. I mean, there is no evidence in any of this stuff, you know, there is no scientific - it's all nonsense.
I mean for example, most of the things that Gore has been saying and all these guys, there is no scientific evidence for any of this stuff at all; in other words direct scientific evidence, there is circumstantial evidence. There is - uh, by the way, I'm a scientist, I certainly believe there is a connection between greenhouse gases and temperature, I don't want people to think that there is not, but this amount of CO2 just doesn't make any sense to affect laws. I'm gonna bore you, like the - the Stefan-Boltzmann law for example, which is the law of radiation heat transfer, it just - I tried hard to find some scientific real evidence, okay, what links these certain liberal's laws of - of thermodynamics or heat transfer is on, and I teach this stuff, okay so I know - it's not something that I am, uh, a skeptic on television or something like that. I mean, I tried to find out what's going on, it just doesn't exist, okay.
Now they do have statistical evidence. They measure temperatures and of course they attribute all of that to, uh, thermo genic CO2. I mean it goes something like this, the temperature goes up, CO2 goes up, then one must cause the other, okay. Of course the other way could be the opposite or something like this, as the temperature goes up, CO2 also goes up, you see what I mean? But that is something they don't- the cause and effect may be reversed, okay, which by the way there is some evidence of that also, okay. So the - the jury is clearly out. What is definitely not the case is the outrageous numbers that people have suggested; that will never happen, okay. That, in other words, won't have temperature increases or sea level increases that gore suggested. And of course, you know, liberal Hollywood gave him the Oscar for that, which is pretty much figment of his imagination. There is no evidence that we're gonna have twenty foot seas for instance and things like that. Come on, give me a break I mean.
There is - I want to make people to understand that when I'm railing against CO2, that does not mean I'm not an environmentalist. I am an environmentalist for sure and I can tell you this much, that coal, no matter what people say, is decidedly dirtier than natural gas by a long shot, okay. I'm talking about particulates, you know; ash in other words, that comes out. Unless you collect all that ash, you're gonna end up like China, okay. You look at China, fifteen of the twenty most polluted cities in the world are in China because they don't control their coal particulates emissions, not the CO2, okay. So - and there is also NOX and SOX is that where establish things - Nitrogen Oxide, Sulfur Oxide, this is acid rain. All of these things, if not taken into account, will precipitate problems, okay, we understand that; breathing problems, uh, visual problems, the sky is just a smog, you know, I mean and - suddenly all of these things are very real issues that in fact natural gas is the obvious answer.
Russ: Okay, so an interesting thing too though, uh, about our sudden abundance, uh, of natural gas, it - it does have some pretty significant geopolitical ramifications, does it not?
Michael: No doubt and I've written about this extensively. Let me - let me just dissect some of these issues for you. First of all, um, the production of natural gas from shale is arguably the biggest and best story in the history of the American oil and gas business in the last fifty years, okay, I mean no doubt about that. I mean, this is an extraordinary feet. Um, going back to my high box that I am preaching right now is that this is again the - now use the same word - the quintessentially American, uh - uh, character, uh, the can do attitude, innovation, uh, private industry taking the lead, letting the economy function as it does without government interference, you put all of these things together truly shale gas should be one of the best stories - not just energy stories - but one of the best stories that an American would be proud of, okay. In other words, uh, it's great application of technology, uh - uh, great economic decision making, um - uh, great can do attitude - put all of these things, the accolades are just endless, okay, of what happened. The end result is that suddenly we have found natural gas in the world - and by the way, the international energy agency responded to this - it stunned even me in November 2010 when they doubled their expected ultimate recovery for natural gas from 15,000 TCF to 30,000 TCF, all thanks to U.S. shale. That's incredible, never had a story like this before by the way. So in one year they doubled just by watching what's happening in the United States and extrapolating.
The bottom line for most people is this, that right now we have gas for 300 years, okay. So there goes at shambles this whole idea we're running out of hydrocarbon already. Oil is expanding also dramatically - shale oil - similar technologies, kind of different application, okay, but pretty much similar to the - to most people, um, to the point that every estimator announced just that the United States will surpass Saudi Arabia and Russia as the world's largest producer of oil. I mean, what a dramatic turn around, okay, from what we thought we were. And you have gas right now that is so enormous - and by the way, you - I'm gonna - let me give you a little secret which I've been telling people recently. You know there is something called natural gas hydrates, which is frozen natural gas - uh, you find it in the bottom of oceans, the bottom of permafrost, uh, layers and things like that - if we access that, and I'm beginning to think - wearing my technical hat right now - that the technology that we use for shale oil can actually be relatively easy transformed into the technology to go after shale gas with some major modifications - in this hydrate, yes - suddenly we have natural gas for 10,000 years; not 300, 10,000, okay.
And that is the same kind of technology - horizontal wise with multiple fractures - the kind of things that we know how to do, okay. So - so in other words, we are talking about right now in industry - I always tell people look, the future of oil and gas is not solar and wind, the future of oil and gas is oil and gas, okay. It's gonna last for centuries, I don't know what the hell we're talking about.
Russ: Well, hasn't speaking of that, President Obama in his, uh, inaugural address, uh, seemed to once again reemphasize, uh, renewables after - after I thought he was, uh, for all different kinds, all in. How - how do you interpret that?
Michael: I don't know, I mean how do you interpret that. The irony in Obama's situation is that in his watch, there were this avalanche of revolutions of natural gas and the guy, I mean, sometimes I feel sorry for him because, you know, his - his cerebral self surely tells him how stupid it is to be spending money on solar and wind, you know, when you have all this natural gas sitting around and readily produced with your own people. It's not like - it's not like some foreign brigade showed up and showed us something. It's not like we do in other countries, where we go over there and we produce some oil and gas and, you know, the hell with ???? sometimes and things like that. I mean this is your own guys are producing gas here. It's not like they're going to produce gas in Jamaica and they brought it here, it's produced in - in Texas. It generates jobs, good jobs, I mean the energy is no question generates the best paying jobs.
You know, let me shock you a little bit. From my University a BS in Petroleum Engineering right now starts at a hundred thousand dollars a year. It's a twenty-one year old kid, okay. I want people to realize that we're not just BSing over here, okay. I mean, you realize my colleagues at the university are envious because senior full Professors in some departments don't make a hundred grand, okay. And my students - even C students are getting jobs right now for ninety thousand dollars a year, you understand what I mean?
Russ: Well let me ask you this before I let you go, are we gonna be in some - some near term, difficult, political waters, uh, based on Obama's attitude and the fact that the Democrats control the Executive branch and the Senate and the fact that the EPA is investigating and the fact that even Yoko Ono, uh, doesn't think that, uh, hydraulic fracturing is a good thing to do.
Michael: Yoko Ono not an expert on hydraulic fracturing, is really funny. I mean, or, uh, Darryl Hannah, you know, I mean give me a break. I mean, we've been fracturing since 1949, okay, I'm a - personally I'm a liberal myself, you know. Socially, I'm as liberal as you can get. In other words, I don't care for example, who marries whom, I don't care about, uh, abortion, none of these issues has I ever worried about, you understand what I mean, so I'm as liberal and Democrat as you can get and for sure I'm not a Fundamentalist of anything, you know what I mean. But looking at reality, real life I mean, look at what's happening here. The energy industry is the best job maker bar none; millions of jobs have been created in Obama's watch on energy, whereas all his other cockamamie ideas are job losses. So, I mean, eventually, you know if it looks like a duck and it quacks like a duck, it's a duck, okay. I mean, you can't pretend it's a turkey or whatever but it's a duck.
Russ: And so you're saying there's no way he can stop this.
Michael: There is no way out of it. In other words, it's not really that they can do something to harm it, I mean they - they can try and - and they can have the oil industry taxed so that they can do their pet idea - pet ideas, you know, things like that. Okay, it's just gonna be a little more expensive to buy oil in that case. There's gonna be rhetoric, people are gonna be talking, but the industry is so massive, is so successful, it's so into the future, okay, that there is - it just dwarfs, I mean, all this stuff around them I mean, you know.
Russ: Michael, I really appreciate you sharing your perspective with us.