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It’s unlikely that ANWR will be as productive as Prudhoe Bay. Probably a third as much. But let’s just say it’s as productive. All that oil coming off of ANWR does is fill up that line. You go back to 2 million barrels a day. We’re importing today 14 million barrels of crude and products in the United States, using 21 million barrels of crude and products. So, the 2 million barrel Alyeska line would be 10 percent of what we use every day. It has no hope of solving many problems for us.
When you go to the oil sands, you should focus on a recent announcement to build a line from the oil sands to the west coast of Canada. That is a 528,000-barrel-a-day line. The plan is to move that oil into the Asian market. We haven’t even moved ahead in the United States to make sure we capture everything coming out of the oil sands.
The cost of the oil sands is incredibly high but necessary. So all those projects in oil sands run up costs several times what they were originally estimated to be. So, you can’t just go in and develop the oil sands. The oil sands is a manufacturing/mining operation. It has a huge amount of manpower necessary, equipment, everything else and I think the oil sands now are producing somewhere around 1.3 million barrels a day.
You don’t have the option of just turning it on or anything like that. It takes years. And ANWR could not go on production for instance if Congress passed something that would allow entry into ANWR in the next session, it would take ten years to go into production.
PK: So even if we find different sources of oil in different parts of the world, it will take a long time to bring that oil online and difficult to transport it?
BP: That’s exactly right. To do anything more than 85 million barrels a day is probably hopeless.
If I were the United States, it would be very disturbing to me to see anybody thinking about transporting any oil from North America to Asia. We let ourselves down if we don’t capture that. Now you’ve got the Democrats talking about taxing it all and they have got the Canadians stirred up [on NAFTA] that they’re going to change that. Canadians don’t like to hear that type of conversation and the people of the United States who are doing the talking about it don’t understand energy, because the last thing you’d want to do is to be at odds with Canadians on NAFTA and have some of that oil cut off from you and let it go to Asia. The Canadians are openly discussing this. They don’t like NAFTA changes that the United States has talked about.
PK: The New York Times reported that you are going to build a new 150,000-acre wind farm for $10 billion. Why are you so bullish on wind power?
BP: What are my other choices? There’s only one source of energy that’s going to make a substantial difference for this country, and it’s wind. It’s renewable, it’s green, there’s no question it will work, and it’s being developed very aggressively now in Texas, western Oklahoma, Kansas, and up in the Great Plains. For the next ten years, America will need about a 15 percent increase over the amount of energy that our country uses now. Where is it going to come from? It could come from wind. The government would have to give access, right of way, to move that, but you’ll be able to put that huge wind area in the central part of the United States to work. It would rejuvenate the Great Plains. Go look at what has happened in Sweetwater the last three or four years. That could be replicated all the way from Sweetwater to the Canadian border. At the same time there is a wind and solar corridor that would extend west of Sweetwater, Texas, to the California corridor.
PK: How is planning on the wind farm coming along?
BP: We’re under way. We have leased the land, we’ll put turbines under contract next month, and the question is, where do you take the power? One option is to go to the wind area in the panhandle of Texas, which is one of the best wind areas of the United States, and move it down to ERCOT (the Electric Reliability Council of Texas) about 250 miles south of us, or we might move it to the West Coast.
PK: How difficult will it be to transmit that power?
BP: Transmission has got to be solved, there’s no question about that. We feel that we’ve got it solved if we move it to ERCOT from the panhandle, we have a right of way that we’re working on at the present time. California is a bit more difficult, but transmission has got to be solved. If this country wants to take care of their energy needs and requirements, they’re going to have to make some of this happen.
PK: Is it difficult to build transmission lines more because of zoning and energy regulations or because of the amount of capital needed for the initial investment?
BP: Well, if you’re going to put turbines under contract, you’re going to have to transmit the power. We’re okay to transmit in Texas. We have that solved. As for the rest of the country, you’re going to have to have some leadership come forward or this is going to be a disaster for us.
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