Dinner Panel: Mike Milken Interviews Eike Batista and T. Boone Pickens

Core Societal Challenges:

• A panel of Nobel Prize winners identified that ten major societal problems (democracy, disease, education, etc.) can be reduced to two primary drivers: energy and education.
• Four of the ten originally listed problems are directly solvable through energy innovation, including water desalination, food production, and environmental protection.
• Ike Batista asserts that Brazil has achieved an "unleveraged economy" since 1997, with debt-to-GDP at 37% and a surplus-generating financial system.

Boone Pickens' Energy Agenda:

• The "Pickens Plan" aims to replace imported OPEC diesel in heavy-duty trucks with abundant, low-cost domestic natural gas.
• Pickens has personally signed up 1.7 million supporters via PickensPlan.com to advocate for energy independence.
• The plan's elements, specifically the conversion of heavy vehicles to natural gas, were included in H.R. 1835 (Nat Gas Act), which passed the House but failed in the Senate due to the lack of a 60-vote filibuster-proof majority.
• Pickens cites a 51-47 vote loss on a transportation bill amendment as evidence of Washington's inability to function without supermajorities on minor issues.
• Pickens estimates that natural gas conversion saves truckers $1.50 to $2.00 per gallon and could create hundreds of thousands of jobs.
• He plans to retire from lobbying in Washington following the resolution of the current legislative battle.

Economic and Strategic Shifts (Pickens):

• Pickens attributes the U.S. failure to act on energy independence since the 1973-1974 crisis to "cheap gasoline" and a "lack of leadership."
• He argues that had the U.S. acted in the 1970s, the resulting dependency on OPEC would have been eliminated, potentially avoiding the 6,000 deaths and 31,000 injuries associated with conflicts in Iraq and Afghanistan.
• Pickens rejects current criticism that the oil industry pays too little tax, noting he has paid $665 million in taxes since age 70 while employing thousands indirectly.
• He identifies the current U.S. energy landscape as historically unique, possessing the world's cheapest oil (10% lower than global averages) and natural gas ($2 in the U.S. vs. $13-$16 globally).

Ike Batista and EBX Group Operations:

• Batista's EBX Group invested $15.5 billion in Brazil between 2011 and 2012, generating 20,000 jobs in construction and operations.
• Batista sold a $2 billion stake (5.63% of his holding) in EBX to the investment arm of the Abu Dhabi government following a one-year due diligence process involving 18,000 documents.
• EBX signed a $1 billion, 10-year contract with IBM to implement "intelligent solutions" and manage data across its diversified portfolio.
• The EBX portfolio includes six listed companies covering oil fields, production vessels, super ports, logistics, mining, real estate, and catering.
• Batista's primary philanthropic goal is to become the "world's biggest philanthropist," aiming to leave a legacy for Brazil and future generations.

Brazil's Economic and Political Context:

• Since 1997, Brazil has maintained "adult supervision" of its financial system, bringing 35 million citizens into the middle class under President Lula and totaling 100 million in the middle class today.
• Brazil has discovered 100 billion barrels of oil in offshore fields (pre-salt), with lifting costs estimated at $16 per barrel, making the reserves highly competitive globally.
• President Dilma Rousseff, formerly the Minister of Mines, is actively endorsing foreign investment and technology transfer to capitalize on these discoveries.
• Batista characterizes Brazil as the most "Western" of the BRIC nations, welcoming international capital unlike Argentina, which he criticizes for creating "social capital" through restrictions (e.g., banning foreign books).

Global Resource Trends:

• Batista predicts "peak oil" is approaching as giant, low-cost mega-giant fields are tapped out, necessitating immense effort to replace the 80-85 billion barrels extracted annually.
• He identifies Brazil as a critical new frontier for energy, though he notes it cannot alone meet the energy needs of the next 3 billion rising consumers.
• Argentina is cited as a negative example of resource nationalism and instability, described by Batista as a "Rolls Royce driven by Egyptian chauffeurs."

Investment Opportunities and Outlook:

• Pickens advises investors that the U.S. energy market is currently "out of balance" in their favor due to the $2 natural gas price.
• He suggests that students entering geology or petroleum engineering now face less risk and greater opportunity compared to the last decade.
• Batista confirms Brazil offers a clear path for 10 years of consistent growth (4% to 5.5% annually) and invites international partners to invest in its resource sector.
• Over $7 trillion has been invested by the U.S. in the Gulf of Mexico and related security since the 1973 energy crisis, a figure Pickens contrasts with the potential savings from domestic energy production.