Laredo CEO on national energy policy: Drill
October 27, 2008
The Journal Record
By Kirby Lee Davis
TULSA - Randy Foutch offered a one-word answer for America's energy crisis: Drill.
"We just need to do a lot more of what we're doing," said the chairman and chief executive of Tulsa-based Laredo Petroleum, which is active in the Permian, Anadarko and Arkoma basins.
Foutch admitted he spoke with an industry bias - but with the benefits of petroleum, he didn't care.
"The U.S. uses more oil than anyone else," he told a University of Tulsa Friends of Finance luncheon audience Friday. "My view on this is, that's where I want us to be. That's where I want my kids to be. That's where I want the next generation to be."
Foutch even contested the term "energy crisis," redefining and refocusing that to the transportation sector's 95-percent dependence on petroleum-based fuel.
"That's the problem," he said, adding that there were all sorts of possible solutions to diversify and adapt with alternative energy sources, no matter how small a dent they make. "Every little bit helps. Any incremental impact of that helps dramatically."
In offering the Foutch energy policy, the developer of four successful oil and gas companies said today's modern nuclear power plants offer a strong alternative for electrical generation, although choosing that option would still make the nation dependent on foreign suppliers.
"Half the uranium comes from places I don't even know how to pronounce," he said. "I don't think that's good for us."
With the nation's coal, natural gas and wind supplies, he thought each offered viable alternatives. But ethanol he called a joke - while the thought of bioengineering and releasing enzymes into the nation's food stocks opened frightening scenarios
"No matter how you add up the BTE use," he said, "it doesn't add up."
That brought him back to oil, which he said the nation has in far greater abundance than press reports admit. With 50 times the nation's proven conventional oil reserves available just in oil shale and tar sands, Foutch said Americans should weigh the cost of drilling as they do the cost of battling terrorism and national security.
"There's no debate there," he said, noting how 700 organizations filed lawsuits to stop drilling efforts over the last few years. "That's just not good."
Although he may contest some global warming conclusions, Foutch said he understood environmental concerns and shared them, as do others in the industry. He pointed to statistics that said less than 1 percent of oil entering the oceans comes from drilling and exploration. The rest comes from natural geological seams that leak.
"What I'd like to do is have a debate with facts and not emotion," he said of working with environmentalists. "The industry is finally getting it pretty well to be environmentally conscious. That doesn't mean not to drill."
What the nation needs, he said, is leadership, and not politics. Our leaders must mitigate the negatives and look at the advantages, understanding there is no short-term solution.
"We got into this oil crisis because we made choices," he said. "It took us decades to get here. It's going to take us decades to get out."
An audience member asked Foutch which presidential candidate best understood his position.
"I thought Abraham Lincoln was a wonderful president," he said.
"I've spent time with both candidates," he continued after the laughter died down. "I worry that they may get it, but the general public doesn't, so they will look at some poll and make the wrong decision."
We need more securities regulation?
TULSA - With his initial slide, Randy Foutch illustrated one folly of today's securities regulations, and why increasing that may not help the nation's struggling markets.
"This presentation," began the PowerPoint presentation, "contains certain forward-looking statements based on current but almost unrealistic expectations, forecasts and guarantees from my loyal and indentured employee base, that involve risks and uncertainties and potential unemployment, and also some input from the big dog himself.
"These statements are based on current market information, dreams, tea leaves and information from a homeless guy named Jake, which were available to Laredo Petroleum, Inc. as of sometime last week. Laredo Petroleum, Inc.'s actual results, although very stellar in their own right, could differ slightly from those stated or implied, due to risks and uncertainties associated with its BCS Standings, the performance of the TU football team, and the amount of Red Bull and Vodka on hand.
"Forward-looking statements include statements regarding Laredo's expectations that are enhanced by such verbiage and phrases as "anticipate," "Budget," "ESPN," "BCS," "team," "shot gun formation," "7 and 0," or similar words and phrases. Laredo assumes no obligation to update the information included in this presentation, whether or not we can still find the person who thought it all up."
While he used that humor to open his presentation to Friday's University of Tulsa Friends of Finance luncheon, the chairman and chief executive of Tulsa-based Laredo Petroleum said it captured some of the regulatory issues now confronting the nation's securities industry.
"I don't think they understood the problem," he said, referring to the Enron debacle that led to the Sarbanes-Oxley Act of 2002. Foutch considered it a great overreaction that provided no help in stopping the subprime lending fiasco or our nation's financial meltdown. "I don't think it did anything for anybody. I suggest that it hurt America."
- Kirby Lee Davis