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Saturday, July 26, 2008

Is Pickens' Plan Good for US?

Who hasn’t seen T. Boone Pickens on TV promoting his plan for American energy independence? Stating “I’ve been an oil man all my life,” Pickens goes on to claim that he has a plan that will free America from the grip of foreign oil, indeed, from the “addiction” to oil in general. The details are explained at his web site, pickensplan.com.

Pickens plan is simple enough in theory—wind turbines for electrical power and natural gas for vehicles. Natural gas vehicles, you ask? Actually, yes, they do exist. But, it isn’t as simple as it might seem. While natural gas vehicles (NGVs) are definitely cleaner burning than gasoline and natural gas is in abundant supplies in the U.S., there are still problems with increased space requirements for the storage cylinders (resulting in less inside room and trunk space in the cars) and the range between fill-ups is only half of a gasoline-powered car. Finding a place to fill the natural gas cylinders is also a problem. There are suppliers for equipment for producing compressed natural gas at home to fill the tanks of your automobile.

Wind turbine power is a little dicier. Pickens admits that it would take thousands of wind generators to make any significant difference and these would have to be strategically located in areas where the average wind velocities are consistent and predictable. Pickens has been a very successful entrepreneur dealing in such diverse activities as oil and natural gas, municipal water supplies and, surprise, wind turbines.

Writing in the Los Angeles Times, David Lazarus had this (T. Boone Pickens could gain from his energy plan, but so might we):


The so-called Pickens Plan would first entail a hefty investment -- more than $1 trillion -- in wind farms on an unusually breezy stretch of countryside extending from Texas to North Dakota.

The wind power would replace the natural gas now used by power plants to generate electricity. The country currently gets about 22% of its juice from natural gas.

All that freed-up natural gas, in turn, would be applied to fueling millions of vehicles that now run on gasoline but would be converted -- it's not clear how, or on whose dime -- to run instead on compressed natural gas.

[…]

[Pickens] and his business partners are investing an estimated $12 billion to build the world's largest wind farm in Texas. That facility, needless to say, would play a pivotal role in meeting the nation's newfound demand for wind power.

Meanwhile, Pickens' more-than-$4-billion hedge fund, BP Capital, is invested in a variety of natural gas companies. He also sits on the board of Clean Energy Fuels Corp., North America's largest provider of vehicular natural gas.

'Mr. Pickens is a very intelligent man,' said Don Martin, vice president of Enmark Energy, a Texas oil and natural gas company. 'People in the oil and natural gas business are rich for a reason. They know where the money is.'


Junkscience.com has done an excellent job parsing Picken's assertions vis-a-vis his television ads (Is T. Boone Pickens 'Swiftboating' America?).
Author Steven Milloy writes, for example
'In 1970, we imported 24 percent of our oil. Today, it's nearly 70 percent and growing,' he intones.

Aside from the fact that the Department of Energy (DOE) puts the import figure at a more moderate 58 percent, Pickens gives the impression that imported oil is scary because it all comes from the unstable Mideast.

His TV commercials feature images of American soldiers fighting in Iraq and he likens the annual $700 billion cost of foreign oil to 'four times the annual cost of the Iraq war.'

But hold the phone. Only 16 percent of our imported oil comes from the Persian Gulf — barely up from 13.6 percent in 1973, according to the DOE. Imports from OPEC countries are actually down — from 47.8 percent in 1973 to 44.5 percent in 2007.

Contrary to Pickens' assertion that oil imports are growing, the DOE expects oil imports to decrease by 10 percent by 2030.

Pickens insists that he is doing all of this “for America” and I have no reason to doubt him. Where is it written that working to help your country isn’t valid unless you end up in the poorhouse? But, when self-interests intersect with national interest it is prudent to examine the plan closely and ask a lot of questions. Many are doing just that and the answers are sometimes self-serving, sometimes patriotic and sometimes a little exagerated, but it appears that Pickens may have a plan that could become a part of a comprehensive energy policy that moves us toward energy independence in the future. And, T. Boone Pickens and his partners could do alright in the process.

Other related stories:

Business Week

Treehugger.com

The Hill


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