Tom Petrie, chairman, Petrie Partners: I'm Tom Petrie, class of 1967 United States Military Academy. Beside me here is General Wesley Clark, class of '66, and whose 38 years of service to this country really has just addressed some of the most important issues we have in America for our security. Not just our energy security, but our economic security, and he's really challenged our audience to think about articulating our raison d'etre—our reason for being—and we sat through and listened to some of the people talk about technical advances that we're making in this industry. We're innovators. The Shale Revolution was a transformation versus expectations. When I was in Russia in 1984, I challenged the Russians that they were doing some things that were very detrimental to their industry and they kept telling me that they knew what they were doing. As it turned out, they were buying U.S. submersible pumps for the world for, at that time, one of the world's largest oil fields in order to deal with the rising water cuts.
When they did that, they created even more rising water cuts and they gutted a field, a field that was producing just at four million barrels a day was taken down in half a decade to 220,000 barrels a day. So they destroyed several million barrels a day not knowing what they were doing. The world we're in today really requires us to play to our strengths, play to our technological advantage. This is what we heard from General Clark today, and it's up to us to make sure we broaden the appreciation of what that's all about. I really commend you for making the points you made, not just about how we deal with our adversaries or enemies. As it turns out, some may be one or the other. But also to not think that going to war is the answer. Sun Tzu talked about that and the great victories come, as he said, when you figure out how not to have that happen and to prevail still.
General Wesley K. Clark (Ret), CEO, Wesley K. Clark & Associates: Well, Tom, thanks very much and thanks for hosting me here and your very enlightened and probing questions. This is a great industry and it's got a great future, not only here but around the world and there's something you said about fracking in 1984 that rang a bell with me, and it's this: the ingenuity, the support, the innovation that's marked America's oil industry for well over a hundred years, a lot of that's come with government support and that fracking, somebody had an idea but he didn't do it without some government help. And it's that industry government partnership that we've got to cultivate and strengthen in America. We've got to make sure our U.S. government and our citizens appreciate what this industry does for America, what it has to do in the future. At the same time, the industry has to understand that it's not just about making money, it's also about national security and economic security for the American people.
TP: Yes, indeed. And what we're talking about is intellectual capital. It's that ability to figure out what happened. When I started as an oil analyst after I came out of the army, oil production in the U.S. was at that point just under 10 million barrels a day. It dropped down steadily all through the '70s, again through the '80s, and until we figured out new technical ways to unlock the hydrocarbons, we thought peak oil was with us forever and there was really no turnaround. As it turned out, we found out with the right technology, it could be different.
WC: And we're still only scratching the surface as we saw in the presentations today about fracking, you're getting a seven and a half, 15 foot wide path through and you're setting them 50 yards apart or 50 feet apart in there. There's so much oil left, but the point is we're not going to run out of oil. There is no peak oil. It is a matter of economics, technology, and of course government regulation, and government support. The trick is to have it all in balance. There are certain things oil does well, we got loads of natural gas and we need to be using that natural gas more effectively. That's why I'm doing my gas to liquids plant up in Little Rock or Pine Bluff, Arkansas, because we can take that natural gas and transform it chemically. Germany taught us how to do that a hundred years ago with coal.
We bombed every one of their ... fuel plants in World War II, and South Africa stole the secrets and that created Sasol, and that technology is and continues to be enhanced. It's a good technology today and we can use it to produce even cleaner hydrocarbons for transportation fuel in the near term. Now, maybe 100 years from now, maybe it's going to be all electric, but we've got to get there, and we've got to do it in a competitive world and we got to take the American economy forward step by step. We're far too early in this transformation to say we're going to phase out oil and gas. It's just not going to happen. I remember President Obama said he wanted a million and a half electric cars on the road in 2015. I think the actual number was like 300,000.
And it's just a fact, there's convenience here. What we really need to do, if we're really serious about climate change, we've got to figure out how to take carbon out of the atmosphere. We've got to do it economically and we got to find a value for carbon. That is the ultimate solution. Not getting rid of carbon, but pulling it back and then using it for something. I've run across a company that can produce fertilizer using that carbon, CO2 coming right out of the smoke stack and they produced a different kind of fertilizer, needs a little bit of work, but it could take the place of something like Ammonium Sulfate, which we're producing right here in Texas, and it's becoming really important for farmers. Well, if you take that CO2 out, that carbon molecule connects to everything and that carbon molecule is what holds the nitrogen and the hydrogen and the other things together, the nutrients that the soil needs. We need to find a way to take that carbon and use it to enrich tropical soils. So there's so much we can do that we haven't done.
TP: You made that point about the geopolitics that we're dealing with, and we really need to find a path where the geopolitical competition is there, but it's based on mutual respect. The lack of mutual respect is something we ceded to China. You made that point, I think it was right on. We also in our own society here have two parties, a two-party system, and the idea of one party trumping another party, no pun intended of course, but the idea that one party prevails versus the other, decisions that get made where there's open debate and on the merits of what we're trying to achieve really matters. And part of why Chairman Xi believes that he's got a superior system is there's only one party and they don't plan to be eliminated.
WC: And they're technocrats. And the truth is here right now, we're stuck in these crazy culture wars and it's destructive. And I'll just share this with you. Newt Gingrich was one of the heroes of so many of us in the military. I met him when he came out to the National Training Center just before the start of the Gulf War in January of '91. He said something to me, he said 'My stepfather's in the military,' he said. 'I grew up in Columbus, Georgia,' he said. 'I taught military history at Georgia State College' or whatever it is, he said. And he said, "We politicians, we need to learn more from you generals," he said. Because he said 'politics is like war, and I know you've got a lot of tricks on how to destroy your enemy." Well, I was a one star general, he was my guest. I didn't want to start a big argument with him, but the truth is politics is not like war. We shouldn't be trying to destroy each other. We're supposed to be working together to get the best deal for the country. So, it's really important that we pull this country back together again.
One of the things that's causing us problems is these people abroad like Xi Jinping and Putin, they don't understand democracy. See, this is a self-correcting system. That's the big deal: is if you don't like it, okay, there's another election in two years. Yeah, we're going to put a few more people in there. This system moves, it changes itself. Under Xi Jinping, there is no self correction. He's going to do what he wants or it's your head. And Putin has become the same way. So, they may look like they've got stronger systems, they may think this system is weak, but as long as we the American people understand that we're all in this together and we work together, I think the democratic system is much stronger than a dictatorship.
Now, we are being attacked from left and right by China and Russia and they're doing everything they can to discredit our system, to pull our policies into destruction. The Soviet Union tried for years to start a race war in this country, but what's happened is with social media now, there's so much more, let's call it, attack surface. We're so vulnerable and there's so much money in politics and you don't know where it's coming from. A lot of it's coming from abroad because the truth is the American president and he always gets the blame or credit for the economy, but he can't do that much. Where he does a lot is in foreign policy. So it's a natural thing. Every government abroad wants to intervene in our election for our president and we've got to work this democratic system so that it doesn't happen.
TP: And, as we're hearing in recent weeks, there's this new level of concern about AI and the fabricated smoke above the Pentagon that just happened two days ago or yesterday they were talked about. [That] tells you that we do have a big challenge there, but we do. As you were talking about, I was thinking we did have a real war—a civil war. And even at that time, the party that got elected, which was a relatively new party at that time, and certainly Lincoln realized when he went to create his cabinet, as Doris Kearns Goodwin tells us in "Team of Rivals" how important it was that he basically brought in many of the people who were not successful in getting the nomination for president, but who he knew he needed to get something done effectively. There's so much that can be done with that wisdom and that Reaganesque charm when he used it against one of his candidates there in '84: 'I will not use age and lack of experiences as a weapon against you.'
WC: 'I will not exploit my adversaries youth and inexperiences,' or something like that.
TP: That's it. Yeah. That.
WC: Yeah. Lincoln had that charm.
TP: He did.
WC: He was amazing. People really underestimated him at first. He was very smart, he was very charming. It does take leadership. We've got to get the right leaders in this country. But what I found in the army is that basically you're always going to get some good people in battalion command, in brigade command. And we used to judge these units by the quality of the battalion commander's order and he standing there, this pointer just like we used to recite in math at West Point, right? But actually what we discovered at the National Training Center using laser engagement systems starting in the early 1980s. The real key to success is not the leader. The leader can lose it, but the winning is done at the bottom. It's the soldier, the tank driver, the rifleman, the guy loading the artillery piece.
It's that ability to put steel on target to get the fuel and food up to the troops and so forth, the truck drivers. That's what makes the units successful. We're seeing that of course in Ukraine today. But the point I want to make is that's the American people. You'll always have brilliant, charismatic, I mean, varying degrees, but there'll always be men and women who want those leadership positions in America. The question is who are the American people? Who are we? We're the ones that, it's our government. We're the ones that have a say and so they have to reflect our culture. We'll win or lose, stand or fail. Have a great country 100 years from now or not based on the culture of the American people, our education, our tolerance, our ability to work together, our ability to see past cultural divisions, ethnic divisions and so forth, and bring out the best in each other. That's the real challenge we face as Americans.
TP: I couldn't agree with you more. I never knew this when I was at West Point, but my sixth great uncle was Rufus Putnam who built Fort Putnam at West Point. And he also was the one who Washington had dinner with during the siege of Boston and down from Benedict Arnold—before he was a traitor—captured Fort Ticonderoga, turned those cannons over to Major Knox who brought them down on sleds and delivered them. And Washington said to Rufus, 'You need to get those up on the Dorchester Heights in one night.' And the question was, 'well, why just one night?' 'Well, the British Navy is out there in Boston Harbor and if they see you doing it the next day you are going to be gone.' So, he figured out how to do it.
But it's one of those things that happens, that people learn how to pull the oars in rhythm and if you're the boys in the boat, how do you win? How do you win in the 1936 Olympics, the gold medal in crew? The winners were sons of lumberjacks from the University of Washington. Big, strong people, but that wasn't the way they won that. They won it when they learned how to pull and paddle in rhythm. And that's what you're talking about. That's the analogy. It helped me in a recent program I had for a campaign for the Russell Museum where I kept saying every day that I was dealing with people, 'If we're going to get to our goals, we got to be pulling these paddles in rhythm.' And that's what was not happening there. The very first days of the Ukrainian invasion, Russia had not really figured out what you were talking about in the U.S. Army. Learning how you do it in rhythm and everybody pulls their weight, it's so important and it's really important in our energy industry today with a message you delivered here at SUPER DUG. Thank you very much. I can't tell you how much I appreciate it.
WC: Thank you Tom. Really great to be with you and see you again.
TP: Same. Indeed. Maybe the Army Air Force game. I'll invite you to it.
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