Can Pickens plan end oil addiction?
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By Jack Money
Published: July 9, 2008
Analysts are applauding Boone Pickens' latest quest to cure the nation's dependency on foreign oil.
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The Pickens plan
Pickens Tuesday called for the declaration of a national emergency and governmental leadership to address the country's dependence upon imported oil.
He proposes addressing the issue in two ways — using wind-generated power to meet the nation's growing electricity demands and using natural gas to power the nation's trucks and cars.
He said his plan is achievable in less than a decade if Congress and the nation's next president act quickly.
"Our country has a crisis that we can solve by working together and by acting quickly and decisively,” Pickens said. "We must take strong and bold steps and challenge all of our leaders in this election year to get on board to truly change the landscape today for a better tomorrow.”
The problem
Pickens said he estimates the U.S. gets 70 percent of its oil from foreign nations, and the country is exporting $700 billion annually to pay for it.
"Our dependence on imported oil is killing our economy,” he said. "It is the single biggest problem facing America today. As we import more and more of our energy, we are participating in the greatest transfer of wealth in the history of mankind.”
Renewable energy needed
Pickens said today's renewable energy sources — wind included — represent just 2 percent of the country's resources. But wind power alone could generate at least 20 percent of needed electricity, he asserted.
Once that power is on the grid, the nation can shift natural gas being used now for electrical power generation to replace gasoline and diesel being burned in the nation's automobiles and trucks today, Pickens said.
"This plan creates an energy platform that cuts more than one-third, or more than $230 billion, off the nation's yearly payments to foreign countries,” Pickens outlines in his plan.
Politics aside
Pickens told The Oklahoman earlier this year he had been working with presidential candidate John McCain about his proposed energy policies.
But on Tuesday, Pickens said his plan is bipartisan. It has its own Web site, too: www.pickensplan.com.
"We are asking the American public to get behind this plan and to help us reduce our dangerous dependency on foreign oil. This has to be the number one priority in the country, starting today, and that's what this campaign is all about.”
How analysts see it
Gheit said wind farms are all over the world, and America needs more of them and everything else that will reduce dependence on imported oil.
"Congress must view energy security as key to national security and it is about time to have a national energy policy that aims at improving our energy security.
"Oil prices are inflated by excessive hype on exaggerated fears of potential shortages and the government inaction has helped this ‘fleecing of America' by financial players to go on unchecked,” Gheit said.
Molchanov, meanwhile, noted that Pickens about six weeks ago announced he would build the largest wind farm in the world in the panhandle of Texas.
The farm, once operational, is forecast to generate four gigawatts of power — about what two nuclear plants could generate — and Pickens will spend about $12 billion on the development.
Wind power, Molchanov said, is an attractive source of energy because it is clean, renewable, and already cost-competitive with more conventional electricity production. He called the opportunity to expand its share of the U.S.'s energy supply substantial.
And wind power is providing a substantial amount of electricity elsewhere — 20 percent in Denmark, and 8 percent in Spain and Germany — because their governments support it.
But Molchanov was more skeptical about Pickens' plan to use natural gas as a transporation fuel.
"That is a bigger challenge,” he said, "because the nation's transportation market consists of 300 million Americans who are very consumer oriented.
"It would involve major changes, not just in automobile manufacturing, but more importantly, in the distribution of our fuel and how customers perceive their fuel sources. Imagine how many gasoline stations there are around the country, and how long it would take to put in the infrastructure to take us from a liquid system to natural gas.
"It may happen in the long-run, but of the two proposals that Pickens makes, rapidly increasing the uptake of wind in the power grid can be a lot easier. That is just the nature of the beast.”
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Boone might not live long enough to see an ROI on his wind energy plans but most of us will if we invest with him. Personally, I can't believe I'm saying this, but Boone is undeniably correct.
While it isn't reasonable to think we can eliminate the need for oil as a transportation fuel, the use of compressed natural gas over the next ten to twenty years could substantially reduce our dependence on oil and fill a need until alternative fuels research and implementation is accomplished (not a short term project).
CNG would have limited use (commercial and commuter), but would be very economical - unless the additional demand pushed up the price of natural gas. (Honda is selling a Civic GX now along with a home filling station that reportedly gets 38 mpg at the equivalent of about $1.50 per gallon.)
Which brings us to why wind energy was mentioned - to relieve the demand brought on by diverting natural gas to power automobiles.
Is Pickens plan complete? No. But at least it's a place to start. And it's a whole lot better than all the influential people who are not coming up with any plan at all.
Let's applaud at least a noisy beginning to a long and difficult path the United States HAS to take.