Peak oilman sticks to his guns

It never hurts to check up on what T. Boone Pickens is saying and doing. The Texas oilman, corporate raider, and philanthropist has serious cred, and it's unlikely that he's giving interviews in order to pump up his investments. His portfolio is well known, and, as he says, "There isn't anybody who can talk a commodity market up more than three or four minutes. The fundamentals will take over at some point."

In a recent interview with the Houston Business Journal, he reiterated his view that global oil production has already peaked:

PICKENS: I think you'll see $80 oil before the end of the year. There's no question in my mind that oil has peaked. If you've already peaked, you'll start to decline. Can you replace it? Probably not.

There's obviously a lot of disagreement on this, but Boone's position is worth noting. Moving on to electrical power generation, he voiced concern on natural gas:

Q: Here in Texas we're struggling with our long-term power-plant needs, trying to pick among coal or nuclear or natural gas. I guess you'd pick nuclear to fuel the Texas plants?

PICKENS: Yes. You've got to get nuclear in because you don't have the other fuel to supply it, unless it's coal. You're not going to have enough natural gas. 

You would think that Texas would have access to plenty of natural gas, but Pickens's calculations must show that it won't be enough for a serious ramp-up of gas-fired power plants. Pickens, a stalwart Republican and big fundraiser for presidential contender Rudy Giuliani, has recently endeared himself to greens with plans to build the nation's largest wind farm near Amarillo in west Texas, a burgeoning center for wind energy. 

Pickens summed up his emerging ethos to the WSJ recently:

I'm an environmentalist because caring for what we have is a reality that is going to be on page one a long time. We have got to pay for that, and I think we can do that without damaging our economy."

I think that's a sentiment that will resonate on both ends of the political spectrum.


Buzzword watch: "flexicurity"


A popular saying within the EU depicts politicians as having "the punctuality of the Italians, the flexibility of the Germans, and the humility of the French"—to which they now might want to add the marketing talents of, say, the Bulgarians.

Exhibit A: The European Commission is pushing something called "flexicurity" (pdf) as a way to sell its labor market reform plan to the EU Council and Parliament. As the Commission explains:

Flexicurity can be defined as an integrated strategy to enhance, at the same time, flexibility and security in the labor market.

The Commission's awkward marketing strategy reflects past failed attempts to shake-up Europe's labor markets. As the turmoil that torpedoed the career of Dominique De Villepin demonstrates, Europeans simply don't like reforms that cut into their cherished safety net in the name of greater labor market flexibility, no matter how clever the portmanteau used to describe them.

And yet, with unemployment rates hovering around 8 to 9 percent, Europe badly needs a shakeup, and the Commission's reform would do just that. And from the standpoint of textbook economics—where the U.S. labor market is the ideal type of flexibility and Europe a paradise of security—"flexicurity" isn't a bad name at all. It envisions more flexibility than in the current European labor markets, and more security than in the current U.S. system. But in the eyes of a European citizen, it just means increasing flexibility and cutting on security. And so, "flexicurity" is likely to be ridiculed as a blatant attempt to sweeten a bitter pill for Europeans to swallow.