Special Reports
My Plan to Escape the Grip of Foreign Oil

By T. Boone Pickens
Wall Street Journal
July 9, 2008

One of the benefits of being around a long time is that you get to know a lot
about certain things. I'm 80 years old and I've been an oilman for almost 60
years. I've drilled more dry holes and also found more oil than just about
anyone in the industry. With all my experience, I've never been as worried about
our energy security as I am now. Like many of us, I ignored what was happening.
Now our country faces what I believe is the most serious situation since World War II.

Texas billionaire T. Boone Pickens says his "Pickens Plan" to increase natural
gas and wind power's role as energy sources is not a play for personal gain.
Steve Gelsi reports. (July 9)The problem, of course, is our growing dependence
on foreign oil it's extreme, it's dangerous, and it threatens the future of
our nation.

Let me share a few facts: Each year we import more and more oil. In 1973, the
year of the infamous oil embargo, the United States imported about 24% of our
oil. In 1990, at the start of the first Gulf War, this had climbed to 42%.
Today, we import almost 70% of our oil.

This is a staggering number, particularly for a country that consumes oil the
way we do. The U.S. uses nearly a quarter of the world's oil, with just 4% of
the population and 3% of the world's reserves. This year, we will spend almost
$700 billion on imported oil, which is more than four times the annual cost of
our current war in Iraq.

In fact, if we don't do anything about this problem, over the next 10 years we
will spend around $10 trillion importing foreign oil. That is $10 trillion
leaving the U.S. and going to foreign nations, making it what I certainly
believe will be the single largest transfer of wealth in human history.

Why do I believe that our dependence on foreign oil is such a danger to our
country? Put simply, our economic engine is now 70% dependent on the energy
resources of other countries, their good judgment, and most importantly, their
good will toward us. Foreign oil is at the intersection of America's three most
important issues: the economy, the environment and our national security. We
need an energy plan that maps out how we're going to work our way out of this
mess. I think I have such a plan.

Consider this: The world produces about 85 million barrels of oil a day, but
global demand now tops 86 million barrels a day. And despite three years of
record price increases, world oil production has declined every year since 2005.
Meanwhile, the demand for oil will only increase as growing economies in
countries like India and China gear up for enhanced oil consumption.
Add to this the fact that in many countries, including China, the government has
a great deal of influence over its energy industry, allowing these countries to
set strategic direction easily and pay whatever price is needed to secure oil.
The U.S. has no similar policy, because we thankfully don't have
state-controlled energy companies. But that doesn't mean we can't set goals and
develop an energy policy that will overcome our addiction to foreign oil. I have
a clear goal in mind with my plan. I want to reduce America's foreign oil
imports by more than one-third in the next five to 10 years.

How will we do it? We'll start with wind power. Wind is 100% domestic, it is
100% renewable and it is 100% clean. Did you know that the midsection of this
country, that stretch of land that starts in West Texas and reaches all the way
up to the border with Canada, is called the "Saudi Arabia of the Wind"? It gets
that name because we have the greatest wind reserves in the world. In 2008, the
Department of Energy issued a study that stated that the U.S. has the capacity
to generate 20% of its electricity supply from wind by 2030. I think we can do
this or even more, but we must do it quicker.

Martin KozlowskiMy plan calls for taking the energy generated by wind and using
it to replace a significant percentage of the natural gas that is now being used
to fuel our power plants. Today, natural gas accounts for about 22% of our
electricity generation in the U.S. We can use new wind capacity to free up the
natural gas for use as a transportation fuel. That would displace more than
one-third of our foreign oil imports. Natural gas is the only domestic energy of
size that can be used to replace oil used for transportation, and it is abundant
in the U.S. It is cheap and it is clean. With eight million natural-gas-powered
vehicles on the road world-wide, the technology already exists to rapidly build
out fleets of trucks, buses and even cars using natural gas as a fuel. Of these
eight million vehicles, the U.S. has a paltry 150,000 right now. We can and
should do so much more to build our fleet of natural-gas-powered vehicles.

I believe this plan will be the perfect bridge to the future, affording us the
time to develop new technologies and a new perspective on our energy use. In
addition to the plan I have proposed, I also want to see us explore all avenues
and every energy alternative, from more R&D into batteries and fuel cells to
development of solar, ethanol and biomass to more conservation. Drilling in the
outer continental shelf should be considered as well, as we need to look at all
options, recognizing that there is no silver bullet.

I believe my plan can be accomplished within 10 years if this country takes
decisive and bold steps immediately. This plan dramatically reduces our
dependence on foreign oil and lowers the cost of transportation. It invests in
the heartland, creating thousands of new jobs. It substantially reduces
America's carbon footprint and uses existing, proven technology. It will be
accomplished solely through private investment with no new consumer or corporate
taxes or government regulation. It will build a bridge to the future, giving us
the time to develop new technologies.

The future begins as soon as Congress and the president act. The government must
mandate the formation of wind and solar transmission corridors, and renew the
subsidies for economic and alternative energy development in areas where the
wind and sun are abundant. I am also calling for a monthly progress report on
the reduction in foreign oil imports, as well as a monthly progress report on
the state of development of natural gas vehicles in this country.

We have a golden opportunity in this election year to form bipartisan support
for this plan. We have the grit and fortitude to shoulder the responsibility of
change when our country's future is at stake, as Americans have proven
repeatedly throughout this nation's history.

We need action. Now.

Mr. Pickens is CEO of BP Capital.


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