In this TEDxChapmanU talk, Yossie Hollander, co-founder of the Fuel Freedom Foundation enlightens the audience about the value of the world’s oil reserves, the impact of our oil addiction, and the ways we can develop cleaner and less expensive American-made fuels.
Audio-Version:
Yossie Hollander
Good afternoon. In 1969, IBM did a worldwide test to see if kids can program. Sounds funny today, I was part of that test and that led for the next thirty one years where I built software companies and I was pretty successful.
And then in 2000, I decided that I am going to change career and I became a philanthropist. And lot of things interested me including the Holocaust program here at the Chapman.
But what’s really interesting was energy. And more and more I became fixated on that, I started donating money to research and to think-tanks in trying to change our addiction on oil.
But then something didn’t click. And I had an aha moment when I was walking on the beach in California and I found the lamp. And after the Genie came out and I asked for world peace and for a good health. Then I asked the Genie for my final wish — can I have all the money and power in the world? Modest. So the Genie, he wasn’t born then, so he started with gold and he said what’s about gold?
I said, “Well, that’s about a trillion dollars, not sure how large that is”.
“So how about all the bank deposits in the world?”
Well, figured out very quickly, I don’t know how that it’s $14 trillion.
And then I said, well, there’s a lot of companies, maybe I can own all the companies in the world as well, and that came out to be $65 trillion.
Now that sounds interesting, then I thought maybe I want to hold government debt. Actually I don’t but then I asked, is this the most we can own? And answer is No.
There is one asset that is larger than all the other assets in the world combined. And that is the value of the world oil reserve: $180 trillion. And that’s a shock.
The simple truth is there isn’t enough money to buy all the oil in the world because all the other assets are less than the oil. Oil is too expensive and it’s bankrupting us.
So I started to think about it, I said let’s try to think about energy, not in terms of energy units, which is all the graphs that you normally see on TV but in dollars. And that is another – that’s the aha moment.
The aha moment is that almost 70% of our national fuel budget is oil. It’s not anything else. It’s oil.
And we import — more than 50% of our trade deficit is oil. It’s one billion a day or more.
China, which everybody complains about, is a distant second and a quarter of what comes from China is oil also to deliver it here.
If you look at coal, coal is only $30 billion. That’s all, versus 500 — you know, those are 2010 numbers. This year’s number 780 and 35.
So the question is – that we found out actually here – that our energy problem is not coal for electricity but petroleum for transportation. And that’s where we should spend our money on.
So what should we do?
Okay. So in the red corner, we’ve got drill baby drill and the nuclear energy. And on the right corner and the blue corner, we have a global warming with conservation efficiency, solar and wind.
Let’s start with the drill baby drill. How fast can we drill baby drill? Well, unfortunately we live in a new oil reality over the world. We don’t decide what’s going to happen to the oil in the world. It’s the emerging world: China, India et cetera. The process is called urbanization.
In China, every year 50 million people move from the village to the city. Now they don’t work to the field, now they’ve got to drive or take a bus to work. We have to bring them the food. We have to export the products from the city to sell them somewhere. That is what’s driving all the money in the world. And it’s happening at the break-neck pace and that’s just China. What about India, Indonesia et cetera?
Then second fact is that it’s very hard to find new oil. Yeah, we all hear about how great new oils we find in the US but it takes much longer to develop and requires much more capital. New oil is expensive. The new oil finds of the United Sates cost $80 to deliver to the refinery. That’s the minimum price. It’s not cheap.
So look at it what’s the result. So we have a domestic drilling at the record level. It grew. Wow, wonderful! But oil is still too expensive. You’re paying a lot for your gas. What’s happening here?
What’s happening here is that world demand is growing at a faster pace, that the world’s ability, not the US ability, the entire world ability to increase supply. Basically if we keep on drilling, it is like trying to outrun the bullet train with a bicycle. And we’re on the tracks.
So bad news and good news here.
We have oil for a thousand years. But it’s going to cost us $1000 a barrel to lift it up.
The question is really not how much oil we have but the costs. And the real question we have to ask is how much oil we have at $50 a barrel and the truth for that is almost nothing. Tar sands, Bakken oil, all are gone because they cost more than $50.
Why $50? Of course that’s the equivalent price of the competition. There is alternatives that exist today cost $50 or less. So the question is therefore how much oil we have at $50?
So is the solution green energy: solar, wind, geothermal, even nuclear, it’s clean, right? You heard about it. Well, there is a small little problem. Green energy that I just described replace coal, not oil. You can’t drive with a nuclear reactor in your car.
So our problem is how to replace oil? The green energy just does not do it.
Let’s look a little bit about global warming, whether you agree or not, look at the facts.