Special Reports
Experts Wary of Pickens' Clean-Energy

By David R. Baker, Chronicle Staff Writer
San Francisco Chronicle
September 1, 2008

T. Boone Pickens, the Texas oilman turned
clean-energy crusader, knows how to grab the spotlight.

He did it last week at the Democratic National Convention, where he pushed
his proposal to spread high-tech windmills across the Great Plains and
fuel many of America's trucks and cars with natural gas. He plans a repeat
performance this week at the Republican National Convention, corralling
any party officials and journalists willing to listen.

He's already had face time with both parties' presidential candidates,
Republican Sen. John McCain and Democratic Sen. Barack Obama. NBC's
reluctance last week to air one of his energy ads only gave him more publicity.

So will his plan work? Energy analysts say parts of it seem plausible,
other parts don't and the timetable is probably unrealistic. It also would
substitute one expensive fossil fuel for another.

Here are the basics of his plan:

Pickens wants to generate at least 20 percent of the nation's electricity
from windmills, replacing electricity from traditional power plants that
run on natural gas. He would take the natural gas that would have been
burned in those plants and use it to fuel trucks and cars instead. That
would cut U.S. oil imports by one-third, he estimates, saving the country
about $230 billion annually.

And he wants to do all this in roughly 10 years.

"We've got to get off the foreign oil," said Pickens, in a meeting with
Chronicle reporters and editors. "We have to get our country to the point
where we're working on the problem and we're not drifting."

Pickens has extensive financial investments in natural gas and wind power
and stands to benefit if the adopts his plan. But he says it's the only
feasible way to make a quick, deep cut in the $700 billion the country
spends on imported oil each year, an expense slowly bleeding the economy
to death. (That figure assumes an oil price of $142 per barrel. At today's
price, roughly $115 per barrel, the total spent on imports each year would
be $565 billion.)

"You can forget about health care, education, social security - because we
won't be able to afford it," Pickens said.

Energy analysts say the country could eventually get 20 percent of its
power from the wind, but probably not in 10 years. A U.S. Department of
Energy study earlier this year found that the country could reach that
figure by 2030 - with effort.

"It's a pretty tall order to put that much wind capacity in place," said
Chuck McGowin, senior project manager at the Electric Power Research
Institute in Palo Alto.

$1 trillion estimate

Hundreds of thousands of windmills would need to be installed throughout
the country's plains, at a price that Pickens estimates between $750
billion and $1 trillion. New transmission lines - worth $64 billion to
$128 billion - would be needed to carry all that power to cities.

The price alone is daunting, although Pickens notes the money would stay
in the United States rather than flow to overseas oil producers. Also
complicating matters: Proposed wind farms and transmission lines often run
into fierce opposition from neighboring communities, making quick
construction unlikely.

"Just getting acceptance from the local populations can be a challenge,
and could become more of a challenge in the future if we build out as much
as proposed," said McGowin, whose organization conducts research for
electrical utilities.

Even if all those windmills get built, few energy analysts expect the
country to stop building new natural gas power plants or close existing ones.

"Those aren't going to go anywhere," said Ken Medlock, an energy research
fellow at Rice University's James A. Baker III Institute for Public
Policy. "We're not going to back out of gas."

Natural gas burns cleaner than coal, making it an increasingly popular
fuel for power plants. Gas plants also produce fewer greenhouse gas emissions.

Much like oil, natural gas has experienced wild price spikes in recent
years. Also like oil, natural gas production in the United States peaked
decades ago, in 1973. Although production has risen sharply in the last
two years - the result of high prices - it is still 11.3 percent below the
peak of 21.73 trillion cubic feet.

That means converting a large percentage of America's millions of trucks
and cars to run on natural gas could push up the fuel's price, if gas
production and imports don't rise.

Costly switch for Detroit

The switch also would be expensive for Detroit and for drivers, since
vehicles running on compressed natural gas tend to cost about $3,000 to
$5,000 more than similar vehicles burning gasoline.

"It's not particularly realistic," said Patricia Monahan, deputy director
of the clean vehicles program at the Union of Concerned Scientists. "It's
going to be a big price tag."

Monahan considers compressed natural gas an excellent fuel for running
small fleets of vehicles, such as buses and garbage trucks. But she
questions the wisdom of trying to replace large amounts of imported oil
with another fossil fuel, especially considering that the United States
already has to import 19 percent of the natural gas it uses.

"We don't want to replace one import with another," Monahan said.
Pickens says the switch to natural gas as a transportation fuel wouldn't
be permanent. He considers it a temporary measure, lasting perhaps 20 to
30 years before the world moves to some form of electric transportation.
He also says the country will soon have more natural gas at its disposal.
Large underground deposits of natural gas trapped in shale lie beneath
Arkansas, Louisiana, Oklahoma, Texas and several Appalachian states. Shale
gas deposits are harder to tap than ordinary gas reservoirs, but high
prices and advanced technology have triggered a drilling rush. As a
result, Pickens said, U.S. natural gas production will soon top the old,
1973 peak.

"The shale has bailed us out, here," he said. "You'll see natural gas
reserves double in the next few years."

Shale boom predicted

Although their numbers differ, many analysts agree that shale gas
development is poised to boom - and increase the U.S. natural gas supply.
Robert Clarke, an analyst with the Wood Mackenzie consulting firm, said
gas production from underground U.S. shale deposits could jump 160 percent
by 2014.

"That's just phenomenal growth," he said. "It definitely appears this will
raise our total production."

Pickens' proposal

-- Within the next 10 years, generate at least 20 percent of the nation's
electricity from windmills, replacing electricity from traditional power
plants that burn natural gas.

-- Take the natural gas that would have been burned in power plants and
use it to fuel trucks and cars instead. That would cut U.S. oil imports by
one-third, Pickens estimates, saving the country about $230 billion


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