Special Reports
Don't Dismiss Pickens' Plan Yet

By David Lazarus
Los Angeles Times
July 9, 2008

When a guy heavily invested in natural gas and wind power says the answer to our
energy woes is natural gas and wind power, it’s hard not to smirk at his
Texas-size gumption.

But let’s not be hasty.

Energy tycoon T. Boone Pickens unveiled a plan Tuesday to wean the United States
from its dependence on foreign oil. By shifting to natural gas as a
transportation fuel and increasing our reliance on wind power, he said, we could
cut oil imports by as much as 38%.

“Our dependence on imported oil is killing our economy,” Pickens said in a
statement. “It is the single biggest problem facing America today.”
He called the country’s oil purchases from places like Saudi Arabia “the
greatest transfer of wealth in the history of mankind, sending billions of our
dollars overseas to buy … a commodity that lasts 90 days until burned in our gas tanks.”

Pickens, a legendary oilman, said his plan could change things within five to 10
years “if we can get Congress and the administration to act quickly.”

That’s a big if. Another big if is getting the auto industry to play ball by
manufacturing more vehicles that run on natural gas instead of gasoline. And yet
another wild card is whether the oil industry would support new energy priorities.

“These are big question marks,” said Dan Becker, director of the Safe Climate
Campaign and former head of the Sierra Club’s global warming program. “There are
a lot of things out of Mr. Pickens’ control.”

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.

I couldn’t reach Pickens to ask him these questions. But he told the Associated
Press that he wasn’t guided by personal gain. “I’m doing it for America,” he said.

Well, that’s heartening. But the fact remains that he 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.”
But Becker at the Safe Climate Campaign said he didn’t begrudge Pickens’ turning
a buck with the Pickens Plan.

“If he can find a way to make money and help the planet, I don’t have a problem
with that,” Becker said.

However, he said, natural gas may not be an easy substitute for oil. Natural gas
prices have been climbing in tandem with oil prices and are up 30% this year.
Increased demand by the United States would push global natural gas prices
higher, Becker said, thus mitigating any relief consumers might initially feel
at the pump.

Moreover, we’d still have to import more than a third of our oil – assuming
everything went according to plan – and would probably end up importing a
greater share of natural gas as well.

Our friends in Russia are the leading natural gas purveyors, accounting for
almost 15% of world exports.

“We really need to kick the tires on this and see what works,” Becker said.
For his part, Pickens said he’d be spending $58 million on a multimedia campaign
designed to raise awareness of the country’s energy troubles and his plan for
fixing them.

He’ll also try to prod the leading presidential candidates, Barack Obama and
John McCain, to pay more attention to the issue.

“Sometimes it takes a crisis to awaken us from our slumber,” Pickens said. “But
once aroused, the American people can accomplish miracles.”

That some may get even richer in the process shouldn’t necessarily deter us from trying.


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