Yossie Hollander Discusses Ending Our Oil Addiction at TEDxChapmanU (Transcript)

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.

So what do you want to work on? You want to work on oil which is used in transportation; it’s $500 billion a year or more, and it’s the number one emitter of the greenhouse gases and urban pollution in the United States.

But coal, on the other hand, is used for electricity; it’s $30 billion and it’s really as far as emission is second or third. It’s quite interesting, right?

So why are we focusing so much on coal? The government spends all the money on coal. If you run your business and spend all your money on the $30 billion and not the $500 billion, you’ll be bankrupt. And by the way we are bankrupt.

So if the red corner doesn’t get it and the blue corner doesn’t get it, so what do we do? We need to break oil monopoly in transportation. Let me tell you how.

We need fuels that exist today. You heard about them. Some of them you may have not. Methanol, ethanol, natural gas and electricity. You may not heard about methanol. Methanol is a liquid fuel made from natural gas, any carbon – actually even from garbage and we are the Saudi Arabia of garbage.

So those fuels exist in this country – they are all domestic. They’re cheaper; all of them are cheaper than petroleum without subsidies. All of them are cleaner. All of them meet fuel greenhouse gases. All are domestically produced and all generate American jobs — a dream come true.

There’s only one problem: the market doesn’t accept the price signal, which is sometimes to 1 to 8.

What’s happening? Well there seems to be three interconnected market barriers.

The first one is the car. Your car cannot take another fuel. So it doesn’t matter if the fuel is cheaper, even if you had it available you couldn’t put it in your car.

So – but we have cars that are coal flex-fuel. It’s a technology that has been known for 40-50 years; it’s not like rocket science.

In Brazil, people put fuels in the car which is a combination of ethanol and gasoline; in China methanol and gasoline. This technology exists. Why shouldn’t all our car be like that to allow us a choice?

But that’s not the only thing, because even if we had the car, there’s no station we can buy, for example, ethanol or methanol. There is one new station right here not far from Chapman, the first one in Orange County. Wow! So what’s happening? Why don’t we have more gas station if it’s cheaper somebody would want to sell us? It’s for the same reason why – when you go to McDonald’s — the McDonald’s franchisee cannot buy fries from Burger King. The distribution channel is blocked.

We had that one before. In the ‘80s, AT&T did not allow any competitor to access the local loop. MCI, Sprint, the long distance carrier couldn’t market to anybody because they couldn’t get to the customer. AT&T was only the way.

So what happened – we said, no, no, AT&T, now you have to give access to MCI and to Sprint through your local loop and the customer can choose the long distance carrier.

Within three years, the price of a long distance call went down from $3 to $0.30 a minute. And that’s why we have smartphones. Otherwise you’d still have one black and white telephone owned by AT&T.

So we need to break that monopoly.

Another interesting thing that we found out is that there’s something called emissions regulations. They were all done for a good purpose; the results sometimes is not so good. For example, if you want to convert your car to drive on natural gas, it’s very simple – there are many cars or trucks that run on CNG. The cost of it in Italy, for example, is $2000. The cost in the United States is between $6000 and $16,000; same car. Why? All regulations.

Let’s look in another ridiculous regulation. I own two electric cars. One, a Fisker Henrik is a great car and a Tesla. So you know, the Tesla paid a fine of $275,000 to the EPA because they didn’t have a emission certificate. Apparently you need to test emissions for electric cars as well. The problem is they couldn’t get the certificate because they couldn’t find an exhaust to put something in.

I can go like that for an hour. We need to modernize our regulations to support what we need and change them to allow competition in this market.

What we’re talking about is actually a very new concept.

First of all, you must know your car, the one you’re having right now in that parking lot probably under the stadium there, can probably convert it for a very small amount of money, on any replacement fuel that we discussed. It costs $2 a gallon or less. Can you think about it? $2 a gallon, right now, today.

And your car could be converted probably at $100 or less to almost all those fuels, not to electricity, that’s slightly different but to liquid fuels like methanol, ethanol, et cetera and others.

But it’s not allowed. You can’t change your car. It’s not legal. You can’t improve your car; it’s illegal.

So standing our ways are those outdated regulations and existing distribution system, because the solution exists in the American system. The fuel exists in the American system. The natural gas, ethanol, the methanol, they all exist here.

What we really need is fuel competition. Like in everything else. You can decide which television you buy, what other products that you compete; you can decide which long distance carrier you take in, which cell phone you’re looking at. Why not decide which fuel you want to take?

If we will have competition, the price will be down. We want choice at the palm, so not the government will decide what to do but you will decide what to do.

I can assure you if those fuels and those conversions to the cars were legal, and that could be done, tens of millions of Americans will do them right away and the Walmarts of the world and the Safeway and et cetera will put those palms right away and you’ll go there to foot for $2 a gallon. And soon enough all the gasoline station will.

So how do we get there?

We created a foundation called the Fuel Freedom and the idea is to get cheaper cleaner American-made replacement fuel to the market. We cannot do it alone. We cannot do it in Washington. There’s no chance that this will happen in Washington.

This has to happen in America, by Americans, then Washington will move.

So we need your help.

There’s a lot of ideas how to do it. I can’t cover them today but what I ask you to do is to go to www.fuelfreedom.org; register so you can get information. If you want to become active, please become active. We need all the help we can get and if you’ll help us to help yourself we will have a different America.

Thank you.

 

About the Speaker

Yossie Hollander is the co-founder of the Fuel Freedom Foundation, a nonpartisan, nonprofit organization based in Irvine, which is dedicated to removing barriers to competition to promote the development of cheaper, cleaner, American-made fuels. He is a successful serial entrepreneur and philanthropist with 43 years of experience in the software industry, and founder and chairman of Our Energy Policy Foundation, which aims to create open dialogue and agreement on U.S. energy policy. Yossie serves on the executive board and management committee of the Weizmann Institute of Science, where he launched a renewable energy initiative. He is a member of the Board of Councilors of USC’s College of Letters, Arts and Sciences, and serves on the advisory board of Cornell University’s Center for a Sustainable Future.

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