Special Reports
How T. Boone Pickens' Energy Plan Just Got Killed

By David Morris
AlterNet. Posted
October 9, 2008.

The new bailout plan passed by Congress may have put the nail in the coffin on
Pickens' dangerous energy proposal.

The financial bailout bill passed by Congress may have once and for all put an
end to T. Boone Pickens' energy plan. Let me explain.
Until the financial meltdown obliterated all other news coverage, T. Boone and
his energy plan were everywhere. His book, The First Billion Is the Hardest, is
number two on the bestseller list. During the Republican and Democrat
Conventions his press conferences were attended by a fawning media, virtually
all of who filed stories with the theme "oil man turns wind energy advocate."

Indeed, even the more than casual reader might come away believing the Pickens
Energy Plan was all about wind energy. T. Boone's web site does little to
contradict that impression. It displays nothing but wind turbines.

But expanding wind energy is not the key element in his plan. The reason is that
that the plan's goal is to reduce our dependence on oil and the electric sector
uses very little oil. Thus expanding wind-generated electricity does little to
move us in that direction. Instead, the heart of Pickens' plan is to purportedly
use increased wind energy to back out the natural gas in our electricity system.
Pickens wants to eliminate our use of natural gas to generate electricity and
instead use it to in our vehicles.

In California, Pickens has been more upfront about his intentions. The Texas oil
and gas billionaire has single handedly financed a ballot initiative that would
raise $3 billion for incentives for vehicles using cleaner fuels. The initiative
heavily favors natural gas vehicles. The biggest rebates would go toward the
purchase of heavy-duty trucks and transit buses fueled by natural gas. Only
natural gas vehicles would quality for the largest rebate for passenger vehicles
-- $10,000.

The primary beneficiary of this ballot initiative would be Clean Energy, the
nation's biggest supplier of natural gas for transportation needs. Mr. Pickens
is majority shareholder of Clean Energy.

The Pickens energy proposal has a fatal flaw. Transforming our transportation
fleet to natural gas will require massive investments in new engines and new
fueling systems. Although largely buried in the fine print, Pickens isn't
proposing to use natural gas to entirely replace transportation fuels derived
from oil. His goal is a 20 percent replacement. So after 15-20 years and the
expenditure of tens, if not hundreds of billions of dollars we would then have a
transportation system still 80 percent dependent on oil and 20 percent dependent
on a fossil fuel whose life expectancy is not much longer than oil's.

A far better plan, and one proposed by a growing number of groups and
individuals (including my own, the Institute for Local Self-Reliance, in a
recent report titled Driving Our Way to Energy Independence)is to electrify our
transportation system. Instead of converting part of our transportation system
to natural gas, only to have to then convert it again to renewable fuels, we
should convert the transportation system to electricity, and make that
electricity increasingly renewable as solar and wind power expand.

Electric vehicles have important advantages over natural gas (or gasoline)
powered cars. They are more efficient. They are quiet. They generate no tailpipe
Moreover, their combined battery storage capacity could usher in a more
democratic energy system where households generate transportation fuel from
their rooftop solar array and store it in the vehicles' batteries, and, if
needed, use their electric vehicles as backup power plants for their homes.
Unlike natural gas cars, electrified cars also lend themselves to being
introduced incrementally. There is no partial natural gas car. On the other
hand, there is a plug-in hybrid electric vehicle, the first generation of which
will be introduced commercially in 2010. The initial PHEVs might have a limited
driving range. As a result, initially electricity might power only 25 to 50
percent of the total miles driven. But as battery performance increases and
costs drop, electricity will provide a majority and perhaps even 100 percent of
the fuel used. Even at lower percentages, if the backup engine for the PHEV were
a flexible fuel engine, then biofuels could replace oil, bringing the total oil
displacement above 85 percent.

In June 2007, Senators Obama, Orrin Hatch (R-UT) and Maria Cantwell (D-WA)
introduced a bill that would give handsome incentives to manufacturers of
electrified cars. After the House of Representatives rejected the initial
bailout bill, the Senate added on some $110 billion worth of incentives for a
wide range of purposes and industries. The Obama, Hatch, Cantwell bill was one
of them. It offers a tax credit of up to $7,500 for electrified vehicles. The
incentives phase out after sales of electrified vehicles, either plug in hybrids
or all electric cars, reach 250,000 in any calendar quarter.

The passage of that bill will accelerate the already vigorous rush by
manufacturers to develop a high performance, long lasting and inexpensive car
battery. Companies are working on dozens of configurations and in the last two
years progress has been swift. The incentives offered should cover 25-50 percent
of the cost of these new car batteries, shaving the payback period for
electrified vehicles to under 5 years or less.

The financial meltdown probably has killed Pickens' chances of gaining passage
of his natural gas initiative in California. Few voters there will approve
putting the state even further in debt. And the passage of the Congressional
bailout bill should mark the demise of his overall plan, as electric cars go
mainstream, leaving the idea of natural gas cars in the dust.


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