Houston We Have a Problem | Journeyman Pictures

Transcript

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[MUSIC PLAYING]

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Stopped to put gas in

my truck, so I can

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get onto the house.

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And to make a long story short,

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man on the other

side of the pump--

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older guy, driving a

big old Cadillac--

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figured out that I

worked offshore.

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Cussed me like a dirty dog.

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He's driving a brand

new Cadillac.

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He's paying $4.10 a gallon.

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I'm driving an old Chevy

pickup paying $4.10 a gallon.

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It's not the entire oil

field that gets rich.

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Most of us just

work our ass off.

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I could go to work in town,

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but you can't make a

living doing that.

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I can make a living. I can

provide for my family here.

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I don't want to be gone two,

three, four weeks at a time.

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But it's what I have to do.

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Do you know what we're paying

on the day rate for this rig?

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Generally, between $140,000

to $250,000 a day.

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Wow.

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That adds up pretty quick.

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Very quick.

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All this effort will only, in it

its entire life, provide maybe

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1 million barrels out

of 85 million barrels

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a day of worldwide consumption.

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We won't even get--

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-Not a drop in the bucket.

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-Yeah.

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That's a lot of work for

not a drop in the bucket.

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It is.

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[MUSIC PLAYING]

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Americans are 5% of the

world's population and use

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25% Of the world's

known energy supply.

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15 years ago, the United States

had 200 million vehicles

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and the rest of the world

Had 200 million vehicles.

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Now the rest of the world

has 400 million vehicles.

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We never saw it coming.

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Nobody saw China, nobody saw

India, and all of a sudden

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here comes this monster.

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The politics of oil is such

that the guy that gets

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there first with the most

troops might control it.

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If the Arabs just

stopped the oil today,

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what would happen to us?

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How long would we last?

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Societies don't last forever.

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I mean, when's the last

time you met a Roman?

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Rule number one,

when you wake up and

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find yourself in a deep

hole, is stop digging.

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And unfortunately, as

far as I can determine,

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we're still throwing

shovels into the hole.

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Two things happened

simultaneously,

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which has changed

the game forever.

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One is: the easy,

conventional oil has peaked.

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Secondly, the whole world is

now aspiring to the lifestyle

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of the United States of America.

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We have allowed ourselves

to become the bad guy.

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Because, as an industry, we've

done a poor job of explaining

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who we are, what we

do, how we do it,

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where we do it, when we

do it, and why we do it.

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Most Americans feel

like the Constitution

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gives them the right to life,

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liberty, the pursuit of

happiness, and cheap energy.

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The only free energy that

I know about is sunshine.

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It's free.

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God gave it to us.

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Use all you want.

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It's free.

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If you want anything else--

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Electricity, natural

gas, gasoline,

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ethanol, solar panels for--

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if you want any other type of

energy than free sunshine,

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you've got to pay the man, that

spent his capital to develop it.

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And if you don't like the

price that that man charges,

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don't buy it.

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People in the world, a lot of--

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mostly Americans who

think it's their

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god-given right to consume

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whatever amount of

energy they want.

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And if we don't produce it

enough to keep the price down,

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That makes us bad guys.

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Don't give me the story that

oil companies are good for

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the American people because

I don't think they are.

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I don't think they have been

good corporate citizens.

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They like us to be dependent on

foreign oil because they've got

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all the deals with

all these oil barons

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in other parts of the world.

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-The total box office

of every movie

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of Hollywood in a given year,

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that would represent about

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a week to 10 days of one

company's revenue--

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Exxon Mobil.

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It's the public that owns Exxon.

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It's the stockholders

that own it.

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They own 99% of Exxon.

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And the same with Shell.

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And the same with all

major oil companies.

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The American people

own those companies,

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it's not those executives

up at the top.

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And I've never understood

why they didn't say,

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'wait a minute'.

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When you're saying

bad, old Exxon,

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you're talking about your

next door neighbour.

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Price of gasoline goes up,

they look at all oil companies

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as the bad guys--

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Exxon, Shell, BP, Texaco.

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People don't understand

that they spend

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billions and billions of dollars

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to supply that gasoline and

supply that electricity

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that you have when you plug your

electric car into the outlet.

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Well, the electricity's

made from natural gas,

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so it all goes back full circle.

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Yeah, I think we need

thousands of electric cars,

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but they all run off

of natural gas because

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that's what powers

the electricity.

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I think the oil industry is

doing a lot of bad things.

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But I don't think the

people are bad people.

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I mean, I'm sure there

are some bad people.

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There are some bad people

at my organization.

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I mean, let's be real here.

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But I think the key problem is

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the industry is

Rooted in the past.

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The industry is not

moving forward.

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It's not progressive.

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And it's very dangerous in a

world that's changing as fast

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as the world of the 21st

century is going to change.

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To have big, powerful

institutions

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clinging to yesterday.

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We need to tear the oil

industry loose from yesterday

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and get them thinking

about tomorrow.

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My great grandfather,

Don Francisco Yturria,

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acquired this land probably

back in the 1870s.

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We own the minerals.

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We made a lease

with Blake Energy

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to come on here and

drill for oil.

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I never dreamed in my lifetime

I'd see $100 a barrel oil.

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It's just incredible.

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And the higher it goes,

the happier I am.

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Let's say it's a three BCF well.

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Or a price of about $7 an MCF.

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That would be $2.1 million.

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So, is that right, $2.1 million?

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-That's--

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-$2,000?

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That doesn't sound right.

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-21.

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-$21 million, I'm sorry.

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-Missed a zero.

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-I'm off a digit.

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-Is that gas going

south or north?

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-Actually, that gas, it's

travelling in through the

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Tennessee line and heading

south into Mexico.

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-Into Mexico?

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-That's right.

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-How is that hurting America?

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-You know, I don't know

the answer to that one.

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Really, a way of describing it,

it's like treasure hunting.

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There are very high highs

when things work for you.

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You find new reserves.

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There's nothing better.

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Emotionally when you drill

a dry hole, it, it's--

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there's a lot of money

that is just gone.

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-That's why he's a

wildcatter and I'm not.

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He said if he hits a

dry hole, move on.

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If I hit a dry hole and

lost all that money,

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I'd go home and stay

in bed for a month.

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A wildcatter is one who

drills wells in areas where

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you don't know whether you

will find anything or not.

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So he's a risk-taker.

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"A century ago, the

wildcatters worked with a

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willow twig, a magic wand

which by purest accident

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did determine the drilling

of some of America's first

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commercial oil wells."

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The operator goes in and says,

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'we're gonna drill

in this area'.

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No one's ever drilled here.

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The chances are pretty low

they'll hit something.

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They're willing to gamble a lot

of money just on the hopes

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that that well out there

will find oil and gas,

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and make them money.

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It's the highest

form of compliment

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I think in our business.

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You are a person who's going

to go and take big money,

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and put it into a feature

or a geological setting

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that has never been

tested before.

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So we had to take one

of our drilling people

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and lower them in by

helicopter with a chainsaw

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in the middle of this

jungle on Borneo Island.

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And come back a little later

to see if he had survived,

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and if an area had been

cleared large enough

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that we could fly

the rig in later.

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They may go broke once.

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They'll be back again.

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They may go broke several

times and be back again.

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You may find nothing

20 times in a row.

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And it maybe the 21st time

that you find something.

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And that happens more than

you'd like to believe.

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It's like about four

straight shots of tequila.

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It's hallelujah,

praise the lord.

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And I've had it done

many times in my life.

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You get a good discovery, you

go to bar and start drinking,

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have a celebration.

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Get a dry hole, you go to the

bar, drown your sorrows.

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You got to laugh.

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That's one thing.

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Mother Nature is

mean to the rancher,

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the cow man, the farmer.

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She's mean to an oil man.

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And you deal with it

by sense of humour.

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You laugh at your bad luck.

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Kind of give you an example

of some of the fun we've had.

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This well here came out

at 1,000 barrels a day.

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Right outside of

Houston, in Brookshire.

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And it's really sweet crude oil.

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About 2,000 feet deep.

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-That was our friend, Mr.

Williams.

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-Well, Mr. Williams

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-Yeah, Jim Williams.

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-Try that.

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-God rest his soul.

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-And anyway, when this--

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-Oh, that smells good!

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-Isn't it great?

-That's sweet crude.

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-What I love is when this comes

out of the ground, right

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Out of ground it smells

so good you could--

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I've taken a sip of it before.

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I'm not kidding you.

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Took it to the Palm

restaurant one night

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and put it on my salad.

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Little oil and vinegar.

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It's pretty good.

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-That smells tremendous.

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-Now, back here, this one

we found not too long ago.

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That's good oil.

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-Oh, man. Let me have a shot.

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-Well, I think the Hollywood

image of an oil man

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is kind of a big

oil guy, like a--

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The guy that works for--

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That's the CEO of one of the

big oil companies who is some

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cigar-chomping boss, bossy guy

that is sitting in the rooms

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conspiring to try to

make things happen.

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When I ran for

governor, they had a--

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They followed the

campaign in England.

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And they had a picture and they

said it was Clayton Williams

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with his feet crossed on

top a Mercedes like JR.

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I mean, that was the

image that the world

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likes to picture an oil man.

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And it's insulting to us.

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And there's not a damn

thing we can do about it.

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JR's the worst thing ever

happened for our image because

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he's a slimy, nice-looking crook

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that took advantage

of everybody.

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And everybody loved to hate him.

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-Wendell!

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Touch that painting and I'll

kill You where you stand.

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-People believed that

that show was real,

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and it was a TV show.

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There may be other

TV shows that aren't

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quite real, you reckon?

260

00:14:28,238 --> 00:14:32,552

-You know I think that you look

at those TV shows like that,

261

00:14:32,571 --> 00:14:34,368

it gets cutthroat in our

industry like that.

262

00:14:34,387 --> 00:14:36,196

I mean, it's whoever

gets there first.

263

00:14:36,215 --> 00:14:37,657

If there's a big

lease play going on,

264

00:14:37,676 --> 00:14:39,572

you better be the one that

gets that lease first.

265

00:14:39,591 --> 00:14:41,019

Because the old saying is,

266

00:14:41,038 --> 00:14:43,051

without the lease

there's no grease.

267

00:14:43,069 --> 00:14:45,215

Without the grease,

there's no oil.

268

00:14:45,234 --> 00:14:47,443

Without the oil, there's

no good income.

269

00:14:47,824 --> 00:14:51,091

-This structure here is 12 miles

long and three miles wide,

270

00:14:51,110 --> 00:14:53,269

and it's got about

400 million barrels.

271

00:14:53,288 --> 00:14:55,535

We'll probably develop 1.2

billion barrels of oil.

272

00:14:55,554 --> 00:14:58,055

That's probably 2% to

5% of the reserves

273

00:14:58,074 --> 00:15:00,556

of the United States

we can increase by.

274

00:15:00,574 --> 00:15:01,597

- TWO!

275

00:15:01,616 --> 00:15:02,685

That's an oil deal.

276

00:15:02,704 --> 00:15:03,887

-Yeah, that's a good oil deal.

277

00:15:03,906 --> 00:15:06,176

It's about a $3 or

$4 billion return.

278

00:15:06,195 --> 00:15:08,844

-You could buy a couple

of steak dinners.

279

00:15:10,060 --> 00:15:28,419

[MUSIC PLAYING]

280

00:15:28,701 --> 00:15:33,650

Pax is one of those socially

responsible funds, right?

281

00:15:33,675 --> 00:15:36,864

They just agreed to pay some

big fine for investing in

282

00:15:36,889 --> 00:15:39,608

companies outside

their charter, right?

283

00:15:39,633 --> 00:15:41,735

Because they're

socially responsible,

284

00:15:41,754 --> 00:15:44,777

so they're not Supposed to

have anything ugly in them,

285

00:15:44,802 --> 00:15:47,841

like tobacco and alcohol.

286

00:15:47,866 --> 00:15:50,192

Well, the first company

listed on the list

287

00:15:50,211 --> 00:15:52,085

of those that they

had in the fund

288

00:15:52,104 --> 00:15:56,127

they weren't supposed to

have was Anadarko Petroleum.

289

00:15:56,152 --> 00:15:58,965

Now, that's when you

know Rome is burning.

290

00:16:01,394 --> 00:16:02,941

It's because the

people that don't know

291

00:16:02,960 --> 00:16:04,597

what they're talking

about are in charge.

292

00:16:04,616 --> 00:16:07,265

The protesters can't

drive to a protest

293

00:16:07,284 --> 00:16:09,516

on what the Sierra

Club produces.

294

00:16:09,535 --> 00:16:11,711

Hot air doesn't

get you anywhere.

295

00:16:11,730 --> 00:16:13,907

So that's what I think's

so funny about it.

296

00:16:13,926 --> 00:16:16,336

The only thing hot

air might do is help

297

00:16:16,355 --> 00:16:18,246

Boone Pickens with

his wind farms.

298

00:16:18,265 --> 00:16:21,423

-The public thinks

gasoline comes from--

299

00:16:21,442 --> 00:16:22,922

- The pump.

300

00:16:22,941 --> 00:16:23,808

-That's right.

301

00:16:23,833 --> 00:16:25,173

Where do we got our oil?

302

00:16:25,198 --> 00:16:27,330

Uh, at the Shell

station on the corner.

303

00:16:27,355 --> 00:16:30,757

Almost as ignorant as where they

think electricity comes from.

304

00:16:30,782 --> 00:16:31,931

-The socket.

305

00:16:31,956 --> 00:16:34,666

Well, it's keeping the

price of oil and gas high,

306

00:16:34,685 --> 00:16:36,780

I guess you could

thank them for that.

307

00:16:36,805 --> 00:16:38,881

They're generating

the record profits.

308

00:16:38,906 --> 00:16:39,678

-They are.

309

00:16:39,703 --> 00:16:41,324

They're generating the

record profits and

310

00:16:41,343 --> 00:16:42,926

they're certainly

benefiting from them.

311

00:16:42,945 --> 00:16:47,239

All you have to do is constrict

supply and keep demand going up.

312

00:16:47,258 --> 00:16:49,254

-All you have to do is

keep fear in the market.

313

00:16:49,273 --> 00:16:50,037

-Right.

314

00:16:50,056 --> 00:16:51,136

Fear in the market.

315

00:16:51,155 --> 00:16:54,191

-Keep it in the headlines,

the fear of disruption.

316

00:16:54,210 --> 00:16:57,075

-You know, If they ever

learned the basic theory

317

00:16:57,094 --> 00:16:59,783

of supply and demand,

we could be in trouble.

318

00:17:01,832 --> 00:17:02,681

-That's right.

319

00:17:02,879 --> 00:17:06,897

To them it's supply and

"the man" not "demand."

320

00:17:06,922 --> 00:17:09,256

I like that.

321

00:17:13,653 --> 00:17:16,110

We kind of don't

even have a clue.

322

00:17:16,129 --> 00:17:18,470

When you turn on the

switch for electricity,

323

00:17:18,489 --> 00:17:20,082

how many Americans

could tell you

324

00:17:20,101 --> 00:17:21,629

50% of its generated by coal,

325

00:17:21,648 --> 00:17:24,312

30% by nuclear, and

20% by natural gas?

326

00:17:24,337 --> 00:17:27,846

I'll bet you 1 in

5,000, if that.

327

00:17:27,871 --> 00:17:31,270

The fact we don't know that is

a dangerous, dangerous thing

328

00:17:31,295 --> 00:17:32,795

for our country.

329

00:17:34,319 --> 00:17:38,028

We are still the only nation

on earth that I'm aware of--

330

00:17:38,059 --> 00:17:39,754

and I've been to most places--

331

00:17:39,773 --> 00:17:42,726

Where the energy resources

are not fully exploited

332

00:17:42,745 --> 00:17:44,655

that are domestically available.

333

00:17:45,630 --> 00:17:48,640

When you see the Alaskan

National Wildlife Refuge

334

00:17:48,659 --> 00:17:50,868

being put up for a

vote in Congress,

335

00:17:50,887 --> 00:17:53,225

which has been done

over and over again,

336

00:17:53,244 --> 00:17:56,007

as a possible domestic oil

source for this country,

337

00:17:56,026 --> 00:17:59,347

you don't see what

the ANWR really is.

338

00:17:59,366 --> 00:18:02,125

What you see is you see

snow-capped mountains.

339

00:18:02,144 --> 00:18:03,891

And those ads are paid for by

340

00:18:03,910 --> 00:18:06,681

California-based

environmental associations.

341

00:18:07,063 --> 00:18:08,907

-Well we drill in

a lot of Alaska.

342

00:18:08,926 --> 00:18:12,000

There are parts of Alaska which

are, in fact, oil fields,

343

00:18:12,019 --> 00:18:14,703

and we should continue to

drill in the oil fields.

344

00:18:14,722 --> 00:18:18,371

We are opposed to drilling the

Arctic National Wildlife Refuge.

345

00:18:18,390 --> 00:18:21,515

It is the calving ground

for a huge caribou herd.

346

00:18:21,534 --> 00:18:25,064

And caribou do not want

nor should they have to

347

00:18:25,083 --> 00:18:27,656

have their babies

in an oil field.

348

00:18:27,948 --> 00:18:30,946

-Caribou now love the pipeline.

349

00:18:31,880 --> 00:18:33,226

And there are more caribou now

350

00:18:33,245 --> 00:18:35,352

than there were before

they started drilling.

351

00:18:35,602 --> 00:18:38,789

90% of the coast of Alaska

has been turned over

352

00:18:38,808 --> 00:18:42,175

to the oil industry to be

developed as oil fields.

353

00:18:42,200 --> 00:18:44,322

We think that saving

the remaining 10%

354

00:18:44,341 --> 00:18:47,550

of the coast of Alaska is kind

of a reasonable compromise.

355

00:18:50,210 --> 00:18:54,253

If only a very small percentage

of the world's space

356

00:18:54,272 --> 00:18:56,483

is set aside as wilderness--

357

00:18:57,485 --> 00:19:00,854

and that's true, just only a

small percentage is set aside

358

00:19:00,873 --> 00:19:03,431

as government

protected wilderness

359

00:19:03,450 --> 00:19:05,696

on the surface of this planet.

360

00:19:05,721 --> 00:19:08,870

Why do you always need to

make exceptions to allow

361

00:19:08,895 --> 00:19:11,304

development in that

relatively small space?

362

00:19:16,903 --> 00:19:19,478

Clearly, we've had global

climate change long before

363

00:19:19,497 --> 00:19:21,762

man ever contributed to

any kind of emissions,

364

00:19:21,781 --> 00:19:24,247

so that I'm not persuaded

that it's only due

365

00:19:24,266 --> 00:19:26,768

to man-made emissions

that this is occurring,

366

00:19:26,787 --> 00:19:28,595

nor just to hydrocarbon sources.

367

00:19:32,959 --> 00:19:34,912

Somebody making

$40,000 a year is not

368

00:19:34,931 --> 00:19:36,916

sitting there worrying,

in my opinion,

369

00:19:36,935 --> 00:19:39,489

about global warming. near as

much as they're worrying about

370

00:19:39,508 --> 00:19:42,842

how to put food on their table

the next day for their family.

371

00:19:49,009 --> 00:19:52,319

There's some observable global

warming that's taking place.

372

00:19:52,344 --> 00:19:56,983

As a scientist, I will tell

you that I have a hard time

373

00:19:57,008 --> 00:19:58,737

imagining that it's--

374

00:19:58,762 --> 00:20:02,391

That it's caused by humans.

375

00:20:03,163 --> 00:20:05,682

-Yeah, I have a

science background.

376

00:20:05,701 --> 00:20:08,255

So I look at it with a little

different perspective.

377

00:20:08,280 --> 00:20:11,994

I know for a fact that

the-- uh, the globe has

378

00:20:12,013 --> 00:20:15,549

heated and cooled ever

since it was created.

379

00:20:15,550 --> 00:20:18,359

And it is not something

that's man-made.

380

00:20:18,360 --> 00:20:20,545

And this hype that

you hear today

381

00:20:20,564 --> 00:20:22,794

about the man-made

global warming,

382

00:20:22,813 --> 00:20:25,429

and we're causing this

and causing that,

383

00:20:25,430 --> 00:20:26,819

It-- it's just not true.

384

00:20:27,370 --> 00:20:30,345

The world's climate scientists

overwhelmingly agree

385

00:20:30,364 --> 00:20:34,080

global warming is real,

Global warming is serious.

386

00:20:34,099 --> 00:20:37,494

It is largely man-made and we

can do something about it.

387

00:20:37,513 --> 00:20:40,448

That is not in dispute

scientifically.

388

00:20:40,467 --> 00:20:42,113

And the fact that

a guy who knows

389

00:20:42,132 --> 00:20:43,566

a lot about petroleum geology

390

00:20:43,585 --> 00:20:46,686

wants to argue with a guy who

knows a lot about the ice caps

391

00:20:46,705 --> 00:20:48,290

makes about as much sense as

392

00:20:48,309 --> 00:20:50,440

my telling me where

to drill a hole.

393

00:20:50,459 --> 00:20:52,589

And the fact is, I

drill a dry hole.

394

00:20:52,590 --> 00:20:55,702

And when they play climate

scientist, they get it wrong.

395

00:21:00,050 --> 00:21:03,879

The scariest channel

on TV right now

396

00:21:03,904 --> 00:21:05,713

is the Weather Channel.

397

00:21:05,738 --> 00:21:06,536

Right?

398

00:21:06,561 --> 00:21:10,651

You don't have to get no

Netflix to have a scary night.

399

00:21:10,670 --> 00:21:13,018

Just watch the Weather Channel.

400

00:21:13,037 --> 00:21:15,573

We have--

Iowa was underwater.

401

00:21:15,592 --> 00:21:16,807

Arkansas underwater.

402

00:21:16,826 --> 00:21:20,383

We have a 12-month fire

season now in California.

403

00:21:20,402 --> 00:21:21,475

We have droughts.

404

00:21:21,494 --> 00:21:22,753

We have floods.

405

00:21:22,772 --> 00:21:24,045

It's getting biblical.

406

00:21:25,732 --> 00:21:27,822

Don't tell me about

50 years from now,

407

00:21:27,841 --> 00:21:30,823

your grandma could tell you

the weather is wacky today.

408

00:21:30,842 --> 00:21:32,478

So we've been taken our

carbon out of the ground

409

00:21:32,497 --> 00:21:33,479

and putting it up in the air.

410

00:21:33,504 --> 00:21:35,393

That's called a

combustible engine.

411

00:21:35,418 --> 00:21:37,209

That's called the

Industrial Revolution.

412

00:21:37,228 --> 00:21:39,154

And at some point, we

got to stop doing that.

413

00:21:39,173 --> 00:21:41,046

Because if we keep going

the way we're going,

414

00:21:41,065 --> 00:21:42,349

we're going to bake the planet.

415

00:21:42,368 --> 00:21:44,854

At the same time, we need to

respect and honour the people

416

00:21:44,873 --> 00:21:46,509

in the oil industry,

in the coal industry,

417

00:21:46,528 --> 00:21:48,446

who have gotten

us to this point.

418

00:21:48,465 --> 00:21:50,226

They're heroes in a way.

419

00:21:50,245 --> 00:21:53,757

They got society from the horse

and Buggy to the jet age.

420

00:21:53,776 --> 00:21:57,412

And they need to be

retired with dignity.

421

00:21:57,431 --> 00:22:00,170

I would say, retire them

with dignity, with honour.

422

00:22:00,189 --> 00:22:01,418

Stop the name calling.

423

00:22:01,437 --> 00:22:02,936

Let's work together.

424

00:22:02,955 --> 00:22:08,334

It is possible to go from the

oil age to the solar age

425

00:22:08,353 --> 00:22:12,080

in a way where the wisdom

and the genius of our

426

00:22:12,099 --> 00:22:15,730

existing energy sector

is tapped and utilized.

427

00:22:15,749 --> 00:22:18,288

They know more about

energy than anybody else.

428

00:22:18,307 --> 00:22:21,196

We now need to use that

genius for the next stage.

429

00:22:21,495 --> 00:22:32,045

[MUSIC PLAYING]

430

00:22:32,260 --> 00:22:36,116

I was born in 1934

in Orient, Texas,

431

00:22:36,135 --> 00:22:39,756

at what was a marathon

oil company camp,

432

00:22:39,775 --> 00:22:43,689

in the nurses quarters because

we didn't have a doctor in town.

433

00:22:43,690 --> 00:22:46,830

Mrs. Greenhall

delivered 70 children.

434

00:22:48,254 --> 00:22:53,383

An oil camp is where the

company builds small houses

435

00:22:53,402 --> 00:22:55,441

for the employees to live in.

436

00:22:55,460 --> 00:22:59,589

There was probably 8 or 10 oil

company camps scattered around

437

00:22:59,590 --> 00:23:01,989

this little town of 900 people.

438

00:23:01,990 --> 00:23:05,889

And the camps would have-- oh,

a minimum of 10 or 15 houses,

439

00:23:05,890 --> 00:23:07,638

up to 100 houses.

440

00:23:07,663 --> 00:23:10,885

I had started to work in the

oil field on a pulling unit

441

00:23:10,910 --> 00:23:12,729

when I was 12 years old.

442

00:23:12,754 --> 00:23:15,103

I worked as a rough neck.

443

00:23:15,128 --> 00:23:19,131

I was working as a derrick man

up in the top of the derrick

444

00:23:19,150 --> 00:23:21,905

by the time I was

16 or 17 years old.

445

00:23:21,924 --> 00:23:24,056

I worked in the summers

for the 5 years

446

00:23:24,075 --> 00:23:25,442

that I went to Texas A&M.

447

00:23:25,461 --> 00:23:28,123

I was studying

petroleum engineering.

448

00:23:28,142 --> 00:23:32,629

And I came to Houston with

$2,500, three little kids.

449

00:23:32,630 --> 00:23:35,249

I immediately caught

on as a consultant.

450

00:23:35,250 --> 00:23:38,659

I was working for most

of the banks in town.

451

00:23:38,660 --> 00:23:42,377

Our firm was reporting

reserves on about 15%

452

00:23:42,396 --> 00:23:44,986

of the total flowing gas

in the United States,

453

00:23:45,005 --> 00:23:47,009

thousands and

thousands of wells.

454

00:23:55,213 --> 00:23:56,436

I'd say in about 1930,

455

00:23:56,455 --> 00:23:58,881

that's when the East Texas

Field was discovered,

456

00:23:58,900 --> 00:24:01,729

the largest field in the United

States before Prudhoe Bay.

457

00:24:01,730 --> 00:24:03,658

Seven billion barrels.

458

00:24:05,320 --> 00:24:09,479

And they had derricks that were

derrick leg to derrick leg.

459

00:24:09,480 --> 00:24:10,279

Solid.

460

00:24:10,280 --> 00:24:13,120

I mean, they were

drilling them as close

461

00:24:13,139 --> 00:24:15,077

as this room to each other.

462

00:24:17,360 --> 00:24:19,129

And they flooded the market.

463

00:24:19,130 --> 00:24:22,889

And they drove the price

of oil to $0.10 a barrel.

464

00:24:22,890 --> 00:24:24,689

$0.10 a barrel.

465

00:24:26,820 --> 00:24:30,273

Well, then they sent

the National Guard in

466

00:24:30,292 --> 00:24:32,039

to shut the field in.

467

00:24:32,058 --> 00:24:35,095

The Railroad Commission

then was the only agency

468

00:24:35,114 --> 00:24:38,858

that was big enough to

govern the oil business,

469

00:24:38,877 --> 00:24:41,428

so they incorporated it

into what they called

470

00:24:41,453 --> 00:24:44,752

the Railroad Commission that

did control the railroads.

471

00:24:45,533 --> 00:24:48,764

Then they got specialists that

would become the commissioners.

472

00:24:48,783 --> 00:24:50,549

It became an elected office.

473

00:24:50,550 --> 00:24:56,564

Well, in pretty short order,

Texas was the OPEC of the day.

474

00:24:58,471 --> 00:25:02,745

And the way they began to

control the price of oil

475

00:25:02,764 --> 00:25:05,259

was by - quote - "proration."

476

00:25:05,260 --> 00:25:10,064

By the 1950s, where

we had lots of oil,

477

00:25:10,083 --> 00:25:11,191

they would say - quote -

478

00:25:11,210 --> 00:25:14,379

"the producing days"

at 8 days a month.

479

00:25:14,398 --> 00:25:16,870

You can only produce 25% of what

480

00:25:16,889 --> 00:25:19,651

your well is capable

of producing.

481

00:25:19,670 --> 00:25:22,249

So we were holding

oil off the market

482

00:25:22,268 --> 00:25:25,099

to drive the price of

oil to $3 a barrel.

483

00:25:25,100 --> 00:25:26,199

Public was saying,

484

00:25:26,218 --> 00:25:29,009

you're controlling the

Price of the product.

485

00:25:29,010 --> 00:25:32,349

And the Railroad Commission's

official answer was always,

486

00:25:32,374 --> 00:25:34,388

No, we're not

controlling the price.

487

00:25:34,413 --> 00:25:36,280

We're conserving energy.

488

00:25:36,299 --> 00:25:38,537

Which was a good

thing to say because

489

00:25:38,556 --> 00:25:40,303

everybody's for conservation.

490

00:25:40,322 --> 00:25:44,436

What we were really doing is we

were Conserving $3 a barrel.

491

00:25:44,455 --> 00:25:47,694

"Such scientific conservation

methods mean progress.

492

00:25:47,713 --> 00:25:51,009

And nobody knows it better than

the state conservation man

493

00:25:51,028 --> 00:25:53,811

who works with the

oil companies."

494

00:25:53,830 --> 00:25:57,437

"That's right, taking out

oil as fast as possible

495

00:25:57,456 --> 00:25:59,449

is inefficient and wasteful."

496

00:25:59,450 --> 00:26:01,525

"Well, time to eat."

497

00:26:03,990 --> 00:26:07,499

And we controlled the price

of oil in the United States--

498

00:26:07,500 --> 00:26:10,229

virtually the whole world--

499

00:26:10,230 --> 00:26:13,892

from the early '30s until 1973.

500

00:26:17,050 --> 00:26:18,509

We were so lucky,

501

00:26:18,528 --> 00:26:22,885

because if we were talking

in the mid to late 1960s,

502

00:26:22,904 --> 00:26:26,686

everybody, with the exception

of maybe a handful of people,

503

00:26:26,705 --> 00:26:30,408

believed that there was

no reason to assume

504

00:26:30,427 --> 00:26:32,424

that the United

States wouldn't be

505

00:26:32,443 --> 00:26:34,610

the largest producer

of oil on earth.

506

00:26:39,244 --> 00:26:42,233

You know, gasoline was so cheap,

507

00:26:42,252 --> 00:26:44,639

and the demand was

going like this.

508

00:26:44,640 --> 00:26:47,809

We built our federal highway

systems all on the concept

509

00:26:47,810 --> 00:26:51,289

that we would be the mightiest

oil producer forever.

510

00:26:51,290 --> 00:26:52,973

And we'd have so much left

511

00:26:52,992 --> 00:26:56,487

we could export it to most

other parts of the world.

512

00:26:56,838 --> 00:27:14,713

[MUSIC PLAYING]

513

00:27:15,163 --> 00:27:17,389

Turned that old Dr.

M. King Hubbert,

514

00:27:17,408 --> 00:27:19,615

who in 1956 gave the

shrill warning,

515

00:27:19,635 --> 00:27:22,655

the States was going to probably

peak in the Early '70s.

516

00:27:22,674 --> 00:27:26,075

And thereafter, go into

irreversible decline.

517

00:27:26,094 --> 00:27:28,260

We peaked December 1970.

518

00:27:31,978 --> 00:27:36,860

The first 100 years of this

business were from 1870 to 1970,

519

00:27:36,879 --> 00:27:41,149

an era of total US

control and of plenty.

520

00:27:41,150 --> 00:27:46,179

That all ended in 1970 when

the US reached capacity.

521

00:27:46,180 --> 00:27:47,357

As that happened,

522

00:27:47,376 --> 00:27:50,820

the foreign producing

governments and exporters,

523

00:27:50,839 --> 00:27:54,076

the OPEC countries, realized

that they could then move in

524

00:27:54,095 --> 00:27:56,029

and have control

of this business.

525

00:27:56,030 --> 00:27:59,229

That's when they began

their expropriations.

526

00:27:59,230 --> 00:28:03,229

-They were not happy with

$3 a barrel for oil.

527

00:28:03,230 --> 00:28:06,194

We had enough capacity

there we thought

528

00:28:06,213 --> 00:28:08,194

to be able to handle OPEC.

529

00:28:08,213 --> 00:28:09,269

We didn't.

530

00:28:09,270 --> 00:28:14,039

We were producing about

50 million barrels

531

00:28:14,058 --> 00:28:19,419

and OPEC had 28 million barrels

of capacity, maybe 30 million.

532

00:28:19,420 --> 00:28:24,385

So they had over half of the

capacity for oil in the world.

533

00:28:24,939 --> 00:28:29,111

Well, in '73, OPEC shut us off--

534

00:28:30,378 --> 00:28:31,197

Period.

535

00:28:31,510 --> 00:28:39,739

[MUSIC PLAYING]

536

00:28:40,346 --> 00:28:43,158

Once they cut the oil off,

537

00:28:43,177 --> 00:28:45,127

then the market

is willing to pay

538

00:28:45,146 --> 00:28:48,110

whatever the going price

is to get it back in here.

539

00:28:48,129 --> 00:28:51,129

Well, immediately it went--

it doubled to $6 a barrel.

540

00:28:53,867 --> 00:28:58,869

Gasoline lines were three

hours long in '73 and '74.

541

00:29:03,533 --> 00:29:07,852

In all of the 186 State

of the Union messages,

542

00:29:07,871 --> 00:29:12,522

this is the first in

which the one priority,

543

00:29:12,541 --> 00:29:15,322

the first priority, is energy.

544

00:29:17,822 --> 00:29:20,674

I have been assured, through

my personal contacts

545

00:29:20,693 --> 00:29:23,534

with friendly leaders in

the Middle Eastern area,

546

00:29:23,552 --> 00:29:26,976

that an urgent meeting will be

called in the immediate future

547

00:29:26,995 --> 00:29:29,368

to discuss the lifting

of the oil embargo.

548

00:29:30,670 --> 00:29:35,622

[APPLAUSE]

549

00:29:35,864 --> 00:29:38,829

Let this be our national goal.

550

00:29:39,294 --> 00:29:42,544

At the end of this decade,

in the year 1980,

551

00:29:42,563 --> 00:29:46,139

the United States will not be

dependent on any other country

552

00:29:46,158 --> 00:29:48,790

for the energy we need

to provide our jobs,

553

00:29:48,791 --> 00:29:49,908

to heat our homes,

554

00:29:49,927 --> 00:29:51,669

and to keep our

transportation moving.

555

00:29:51,826 --> 00:29:57,685

[APPLAUSE]

556

00:29:57,849 --> 00:30:00,051

Once they turned the

spigot back on,

557

00:30:00,070 --> 00:30:02,729

once they started sending

the ships back in,

558

00:30:02,748 --> 00:30:05,742

we had plenty of oil,

plenty of gasoline.

559

00:30:05,761 --> 00:30:07,220

We were happy again.

560

00:30:07,239 --> 00:30:12,149

Now, oil is floating up because

they kept shutting the oil back.

561

00:30:12,575 --> 00:30:16,859

You've got a relatively small

population, 10 million people,

562

00:30:16,878 --> 00:30:20,077

that's got the rest of

the world held hostage.

563

00:30:23,356 --> 00:30:28,619

Make no mistake, we do have

a real energy problem.

564

00:30:28,620 --> 00:30:33,559

One third of our oil, 17%

of America's total energy,

565

00:30:33,560 --> 00:30:40,143

now comes from foreign sources

that we cannot control.

566

00:30:40,162 --> 00:30:45,811

We must push with renewed

vigour and talent research

567

00:30:45,830 --> 00:30:48,769

in the use of non-fossil fuels.

568

00:30:48,770 --> 00:30:52,082

The power of the atom,

the heat of the sun,

569

00:30:52,101 --> 00:30:55,708

and the steam stored

deep in the earth,

570

00:30:55,727 --> 00:30:58,680

the force of the winds and water

571

00:30:58,699 --> 00:31:04,454

must be main sources of

energy for our grandchildren.

572

00:31:04,473 --> 00:31:06,099

And we can do it.

573

00:31:06,100 --> 00:31:18,639

[APPLAUSE]

574

00:31:18,894 --> 00:31:23,267

I went before your senators and

representatives in Congress

575

00:31:23,286 --> 00:31:28,145

with a comprehensive plan to

make our country independent

576

00:31:28,164 --> 00:31:32,350

of foreign sources

of energy by 1985.

577

00:31:34,327 --> 00:31:39,689

Now, what did the Congress

do in February about energy?

578

00:31:39,690 --> 00:31:42,679

Congress did nothing.

579

00:31:43,203 --> 00:31:46,462

What did the Congress

do in March?

580

00:31:52,080 --> 00:31:56,608

What did the Congress do

in April about energy?

581

00:31:59,069 --> 00:32:00,679

In May?

582

00:32:01,811 --> 00:32:06,066

Congress did nothing, and went

home for a 10-day recess.

583

00:32:06,085 --> 00:32:10,757

As of now, the Congress

has done nothing positive

584

00:32:10,776 --> 00:32:14,145

to end our energy dependence.

585

00:32:1

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Film: Houston We Have a Problem

http://www.journeyman.tv/film/6513

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