Pickens Plan

It is now time for the third and final installment in my series on the major Energy Plans. In case you missed it, part one in the series (Obama) an be viewed here. Part two (McCain) can be seen in its entirety here. Today I will address the plan of a non-politician, T. Boone Pickens, who has personally financed a massive national campaign to promote his Pickens Plan for energy.

For those of you that don't know, T. Boone Pickens is a Texas billionaire who made his fortune in oil and natural gas. He has formed and run several companies, most notably Mesa Petroleum. Pickens came to the national stage while running Mesa due to his attempts at hostile takeovers of much larger oil companies. He made big money in in these takeover attempts, and later in oil and natural gas futures. What I'm trying to get across is that this man has amassed his billions playing the energy game, and he understands it very well.

Unlike the plans of the politicians, the Pickens Plan is a series of relatively simple ideas and largely lacks details like dollar amounts, money from the federal government, and timetables. This plan was designed to get some basic ideas into the heads of the country so we will make our elected leaders figure out the details and make it happen. So here it is (Sorry, I'm pulling the points out of Chapter 13 of his latest book, so you'll either have to take my word for it or read the book):

• Move natural gas out of power generation and into transportation
  
• Clean up coal
  
• Step up nuclear power
  
• Replace the power currently generated with natural gas with wind and solar
  

Well, that's really it. There are more details that I will get into as I discuss each point, but what it all boils down to is: stop using fuels we don't have and start using fuels that we do have. Allow me to discuss.

Bullet 1): We are currently importing 70% of the oil we use. Also, 75% of the oil we use goes directly to transportation. It does not take a leap of faith to see that if we use another fuel for transportation, we won't need to import nearly as much oil. Natural gas is the logical alternative. True, it is not a renewable energy source, nor is it pollution-free. But we have the technology NOW and we have the natural gas NOW. Los Angeles runs the majority of its buses on natural gas, as do multiple other municipalities. Overseas, natural gas use in vehicles is not an uncommon thing. We know how to do it. Natural gas is also cheaper than oil (though the difference was much larger when oil was $140/barrel). The switch is completely feasible.

There are drawbacks and criticisms, of course. The biggest criticism is that Pickens has big money in natural gas, so of course it makes sense for him to promote it as the next big fuel. I agree that he does have hundreds of millions (if not, billions) of dollars in natural gas and thus needs natural gas to work in order to make A LOT of money. However, his argument is a valid one. The technology is ready today, and the fuel is domestic and cheap. Drawbacks as they exist in my head: Infrastructure and the fact that this plan will require not just one, but two MAJOR shifts in transportation fueling.

It is painfully obvious to anybody who does happen to have a natural gas-powered car that there is not a nationally available system for fueling CNG (compressed natural gas) vehicles. Making natural gas available at gas stations will require some investment of cash. This money should come from the gas station companies, not the public. If station A sells CNG and has a massive consumer base while station B across the street is missing out, station B will get CNG. There just has to be a demand for the fuel before it is going to be available. The problem is that nobody will buy a car that they can't use due to lack of a fuel source, so the demand for that fuel source will never be there. You can actually buy systems to fill your CNG car up at home, but these are multiple thousands of dollars and are thus cost prohibitive for most people. This is thus a circular problem. Also, we could use plug-in vehicles (for passenger cars anyway, not buses and trucks) or CNG-electric hybrids. Pickens does not mention the use of these types of vehicles.

The thing that I really like about the Pickens Plan is that it seeks to provide a bridge between non-renewable, dirtier energy and renewable, clean energy by replacing oil with fuels that we have readily producible in the United States. It is a short term, transitional plan. It basically buys us thirty to fifty years to figure out the energy source of the future. Thus, once everybody is finally used to having and using their CNG-powered cars and all the fuel you need is readily available, whether in your garage or at stations, we will have to make another change. We will have finally developed a limitless, clean energy source that is usable in transportation, and everybody will need new cars again. Yeah, this sucks, but you know what? It gets us thirty to fifty years of not sending trillions and trillions of dollars overseas to terrorist-sponsoring nations to buy a fuel that is running out. I don't think that there is a better solution out there right now.

This is already massively long, so Bullets 2 & 3): Coal is the only fuel source (used on a large scale) that we have that is more abundant than natural gas. Yes, if somebody can figure out how to use is much more cleanly than simply lighting it on fire, it will help us make electricity. We already get 50% of our juice from coal, but it is dirty. This needs capital to work. I don't know where clean coal stands on the feasibility scale, but if we can get it in use, we will have abundant supplies of cheap electricity. Nuclear plants need to be constructed. Yeah, they produce radioactive waste. True, nobody wants to store it. But nuclear power is otherwise perfectly clean (really, the radioactivity is the only by-product) and perfectly safe. This country is actively building nuclear power reactors every year. We use them on aircraft carriers and submarines, amongst other vessels. I don't know about you, but I can't think of a more confined space to be stuck with a nuclear reactor than a submarine. They are safe. We need to use more nuclear power.

Bullet 4): The United States is windy. This is a completely free energy source that is never going to be depleted, and we should use it. To harvest the wind only requires the construction of wind turbines. They aren't the most attractive thing in the world, but they do leave the land around them entirely intact. That is the drawback of solar. We have a lot of sun (in the southwest, for example) and a lot of land. However, you can't harvest the sunlight without taking it away from the plants and animals on the ground. Massive solar farms by definition will destroy the environment on which they would sit. Wind doesn't have that downside.



So let people and companies invest in wind power from Texas to North Dakota. Give them a way to get the power out from the wind farms (this is another issue that goes back to updating the electrical grid (see McCain Energy post)). There is money to be made, so it shouldn't require taxpayer input. North Dakota could supply 1/3 of the nation's electricity needs, with Texas capable of producing an almost equal amount. Mind you these are gross overestimates because there is no way to harvest all wind in these states, but it give you an idea.

Bottom line: This is a transitional, national energy plan that does have its drawbacks. It also has a lot of good ideas. It still relies VERY heavily on the unknown (i.e. development of renewable energy sources), but does provide a way to stop sending trillions to terrorists. I agree it is not a perfect plan. There is no single, world-changing, snap-of-the-fingers energy solution, and I think that this plan is based in reality. The plan should be more inclusive of other alternative energy sources, as well as plug-in-type vehicles. Overall, B- to B.