Can energy discoveries lead to independence?
Chris Grisanti talks about if U.S. energy discoveries can lead to indepence and economic renaissance
- Duration 9:49
- Date Jun 27, 2012
Chris Grisanti talks about if U.S. energy discoveries can lead to indepence and economic renaissance
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So much for joining us.
And you are by training and by background here in -- comments -- a business guy.
It's you -- an opportunity to get the United States are terrible well I shirt and this is this overbought this gonna make everybody -- better explain how this.
Such an easy thing to talk about because for once it's good news so we've got to have to -- real big pieces of good.
The first -- to give you a little background.
The US up for a production of four yes production of oil peaked in 1970 and it's been downhill ever sense a ten million barrels of 1970.
Down to that five million barrels a day.
In 2000 and we're running out of borrowed because we were depleting -- -- reserve -- now we've got that shale oil that we've always known was there but was always too expensive to get as -- Al -- -- bra -- oil -- -- -- just like the -- that you talk about -- usually talk about natural gas.
Well fracking for oil started about 2008.
And -- since then our oil production -- grown about 15% a year.
And we estimate that by the year 20/20.
Will surpass our peak production of 1970.
But that means for you and me is instead of -- instead of importing 60% of our oil.
We'll import about 20% of our oil.
And we think that passed 120 he could get so good that by 2030 we can and oil imports except for our friendly neighbor Canada right altogether.
Okay but you're talking about oil and it's also a natural gas revolution -- -- happen.
How I met him that's just terrific so what you've got is oil which we obviously fight wars over.
And that's all the sudden gonna be produced right here in the United States and then you've got natural gas which can this deep places displace coal.
As -- be leading -- -- production source of electricity.
-- they've got these two forces working together not since the Internet in the 1990s.
Have we had such an industrial revolution take place.
Right before our eyes and hardly anyone's talking about -- And is this where president analysts -- -- that well we're going to.
Give my licenses drill baby drill Sarah Palin talked about it is that telling where we are in the drilling process this is.
-- yet you are yeah.
-- and -- and almost all of this is not the controversial offshore drilling it's places like North Dakota the.
The eagle for -- on Texas and new -- assailant Wyoming.
So it's mostly on populated areas on like the fracking that's taking place in Pennsylvania for.
So the good news is there's plenty of oil right -- without risking an oil spill in the gulf.
There's plenty of oil -- -- places where there's hardly any inhabitants so that's those two things make this a terrific source of oil for the next twenty years.
Our guys getting kind of tired that I mean this is that we're hearing our national security service I was with General David Petraeus Monday night at a meeting and Washington and we were talking -- someone asked -- what do you think is that the biggest threat this is your friend and biggest opportunity for the United States going forward.
And he said the biggest opportunity going -- is right here at home and saying exactly where you were saying that the United States is sitting.
The biggest deposits of oil and natural gas of any region and the world and as long as we exploited exploited quickly it allows us.
The ability to get out of the middle of the Middle East and in the -- -- is like the godfather right well there outlets you know I mean he's just you don't -- -- exciting how to try to get out -- Kid Rock -- -- -- I mean we keep getting absolutely -- -- is literally.
Like that are part of this story the second chapter.
Is that because there's going to be so much oil in the United States the relative price of oil -- United States -- for example brand or Saudi Arabia.
Will be lower by about 101520 dollars a barrel.
What that means is that refineries in the United States will have a huge competitive advantage -- refineries in South America in Europe.
So for the first time last year in sixty years since the forties.
We actually exported we're net exporters of refined products -- -- gasoline especially diesel fuel and jet fuel.
This can be the next iPhone -- Boeing aircraft the next it's really successful manufacturing exports story for -- They used to abandon the aspect -- that you know we've been reading.
And hearing about empowering personally in our lives experience -- American jobs are going overseas manufacturing jobs are going overseas.
But if we have the ability to make this stuff at home runs and -- -- -- you know we don't.
I need special government subsidies or anything else what we need is for folks to get out of the way and just let the free market.
Take its its natural place.
With the oil is being drilled we need the pipelines to get the oil to refineries.
We need we need export licenses to get the stuff out of here.
And this could be really a multi multi billion dollar industry in -- -- -- cramming -- seven -- in Canada where do we stand where fact Keystone Pipeline.
And oil coming from candidates and -- -- of this it shouldn't be a democratic or Republican issue it totally makes sense for Canada which exports.
Almost all of its oil because it doesn't use that right.
And it exports 90% of it to the United States we want to keep that come.
We don't wanna say well I'm not sure we -- pipeline.
From very strategic standpoint we want to say to Canada if you build it we will come.
And -- so.
I think that the Obama administration's made a mistake by being somewhat ambivalent about a.
Canadian to Canada to North America to the United States but it.
-- well and end up happening I certainly I economics -- drive that decision it's one I certainly hope so and two I think so.
Either the Obama administration if -- reelected should see the light because it just doesn't make echoed that oil will be drill.
If you don't want the oil -- you're not to do something else is it'll either it'll be drilled leadership here -- shipped to Asia.
So clearly it's in our economic and strategic interest of -- chipped it.
About why we lower prices of energy the United States feeling energy have what does that do in the Middle -- -- Arab -- and you know thank goodness it makes it so much less important.
So all of a sudden we don't have to worry about which dictator's -- in which country in war.
You know god forbid which which country we need to send arms to.
So -- just think about it OPEC controls a lot of the oil but not.
In less than half of our imported oil comes from OPEC.
After OPEC is that's Middle East -- your own right it doesn't include Russia are out -- rests on -- -- -- but Venezuela for example is so if you think I'm.
Bad guys but guys are -- hasn't -- Aaron yeah right certainly have other interests other than our home.
So on the other hand we've got Mexico and Canada -- -- -- exporters and other friendly nations like Norway that we could export it even if we pull exports down only fit.
15% we could get -- 15% if we want -- to from Canada Norway and Mexico.
So -- we.
Have enough fans are but domestic borrow or -- -- -- Canada.
Mexican or -- had to deal with our own requirements we will we might have -- 820 and really have had enough left over that we export to the rest of the world.
You know what -- export to the rest of the world is refined product we we want export crude and the fact is that little known fact it's against the law for you know its its export crude to other countries.
The inattention and that's right you soil programs out aground in the United States gets refined in the united and and that -- you really can't take it out of the ground in the united now and send it to -- anyway right to China.
-- and and and that only makes economic sense because we use every drop that we produce and of course much more.
But the big game changer is the fact that for the first time we can refine oil much cheaper than -- the second part of of the refining isn't just cheap oil.
It's cheap natural gas natural gas is the second largest expense after oil and refining gasoline and another thing how can we export natural gas we can that's coming that's a longer term in the form of liquefied natural gas but that takes and a lot of infrastructure investment -- you -- these giant tankers.
And it's it's pretty dangerous.
I think we'll get there over the next ten to prevent panic -- you're your finance -- right -- sandy capital management you know this line of work.
When you say that it has the ability to be the next.
Industrial revolution right technology revolution -- through.
All about and what does that mean short well it's real exciting one of the best parts of that because -- -- try to -- -- I think it's good -- retained after -- everything -- but but it but what's interesting is you know in 1989.
Nobody expected ten years later the Internet to just be taking off.
You know five years ago nobody expected.
US oil production domestically to really take off one -- and and not only does that mean less imports but what it means is that our refineries.
Which were these dying kind of beasts.
Are now all of a sudden the envy of the world because the cheap oil cheap natural gas so if you can imagine.
Oil refiners expanding capacity hiring tens of thousands of additional people and much better.
Our our balance of trade will go -- much more favorable position will be importing less and also will be exporting.
Gasoline diesel fuel jet.
Okay now I'm I'm not there are recent college graduate -- All the recent college -- has the brackets are desperate to find jobs who -- they all think that they're gonna go work on Wall Street right.
Those days are probably over time so at least know what advice would you give young people the day went lot of -- Tobago and -- You know it's time to roll up your sleeves and enjoy the manufacturing Renaissance in the United States in May not seem sexy to work at an oil refinery.
Work at a factory that produces.
Electronics but we're good at that and so you know that's coming and of course and your your college graduates on May not be a lot -- -- so I'm gonna have four daughters of the event.
So she may not be a line worker but she could be an engineer.
She could design the product she could supervise the line so it's actually kind of exciting it's like growing up in the forties and fifties when you got a nice high paying manufacturing into okay what.