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Q&A with Randy Ellis ,Daily Oklahoman 6-09

Mike, I understand that you and some other Oklahoma oilmen disagree with some of Boone Pickens' predictions and national energy plan? Q) Boone Pickens recently predicted that oil prices with soar to $300 a barrel within a few years unless there is a dramatic shift to natural gas and renewable resources. Do you agree with that prediction?

A) I donít know what oil prices are going to do over the next year much less the next ten years. I really respect all Mr. Pickens has done for OSU and the success he has had trading oil futures and making stock trades. I think oftentimes he even moves the market with his comments. But I donít know any thoughtful, unbiased, energy expert that would make such a rash prediction. I guess if I had a half a billion dollars tied up in Windmills I might be tempted to try and move decision makers away from the cheaper, more reliable and more realistic forms of energy as well. There are simply too many uncontrollable variables to be able to know what the price of oil will be. What will governments do to impede further development of fossil fuels? As the price rises what will be the effect on consumption? How will advances in technology in oil and particularly natural gas exploration and development have on supply ? In the last five years we have seen a virtual explosion in technology in drilling and development of the shale reserves. These are reserves that just a few years ago we never considered as viable . Now they make up the most significant new production in the U.S.

†Q) Mr. Pickens suggests the solution to the problem is to shift away from oil by ramping up the use of natural gas and renewable energy sources like wind and solar power. Do you agree with those suggestions?

†A) I agree that we should encourage greater usage of our clean burning natural gas. I disagree with the idea that alternatives to fossil fuels are going to wean us off oil and natural gas. Such suggestions play into an emotionally driven, unrealistic and economically dangerous wish fantasy. This rhetoric does effectively get into alignment with the politically correct sentiment of the day which is largely based on fear and exaggeration. However the same argument disregards the cost and greatly minimizes the importance of fossil fuels to our economic well being and our way of life. Ninety eight percent of the worlds transportation fuel and one hundred percent of the air transportation fuel is made from oil. Oil, natural gas and coal fuel our entire economy. Any nation experiencing any economic growth requires large quantities of oil and natural gas. The more responsible approach is to embrace all forms of energy and spend our scientific and economic resources to make them as clean burning as possible as we continue to search for alternatives.

†Q) If you were to suggest a national energy plan, what would it be and how would it differ from the one proposed by Mr. Pickens?

†A) We need a responsible, affordable and comprehensive energy policy that embraces all our sources of energy while continuing to find alternative sources that make economic sense. As a natural gas and oil producer it is tempting to slam the use of American coal as too dirty. Truthfully we canít afford to abandon such an important source of American energy without doing everything technically possible to make it cleaner burning. Mr Pickens plan is right in encouraging the greater use of natural gas. However, advocating replacing fossil fuels with wind and solar is just a ďBoone doggleĒ.While these are important energy sources on a very small scale, the wind doesnít always blow and the sun doesnít always shine. It is virtually impossible for wind and solar to ever contribute more than 10% of our total energy needs. The cost of pushing these two sources of energy beyond being supplemental in nature would bankrupt us.

†Q) What steps should the President and Congress take to improve this nation's energy future?

†A) Every current energy initiative of the Administration and the Congressional leadership would dramatically increase the cost of energy to the consumer. The Administration proposes increasing taxes on the exploration and production of oil and natural gas. They have proposed a massive tax increase on the use of fossil fuels that may be the biggest tax increase on the American tax payer in history. It seems as if they donít really want an energy policy, just more money to spend. At least they are honest in saying their intent is to get us weaned off of fossil fuels. This approach takes the doctrine of unintended consequences to a new level. China already emits four times more CO2 than the United States. Every tax increase and every environmental cost increase merely sends more manufacturing to China ,India and other third world countries who donít have the same stringent environmental regulations and safeguards.. In other words these actions merely make CO2 emissions much worse. We must have a scientifically driven energy policy not one based on fear and political expediency. We must get it right if we are to maintain our standard of living and our position of leadership in the world today.