Special Reports
Pickens on Energy Plan

By Kent Bernhard, Jr.
National Green News
October 31, 2008

Legendary oilman T. Boone Pickens has a lot to say about his plan to wean the
United States from foreign oil. He spoke about it with editors of American City
Business Journals' 40 local business journals this week on a tour that included
stops in Charlotte and Nashville. He also sat down for an interview about his
efforts aboard his private jet on the flight from Charlotte to Nashville, where
he took part in a town hall meeting broadcast on the RFD network.

In essence, Pickens' plan calls for using natural gas as a transportation fuel,
at first in heavy trucks and then possibly in cars. Using it for heavy trucks
gets the biggest bang for the buck. He sees the possibility that the U.S. could
reduce the amount of oil it imports by 38 percent within 10 years. Natural gas
makes up 22 percent of the fuel used in the U.S. for electricity generation.

Much of that would be replaced by wind farms generating power in a corridor from
west Texas to North Dakota. Private industry would build the wind farms and the
natural gas powered trucks. But government intervention would be required in the
form of incentives for buying the natural gas trucks and getting the wind power
to the biggest markets. To get the power from the Great Plains to the nation's
population centers, the government would create easements for transmission lines
in a process Pickens likens to the creation of the Interstate highway system in
the 1950s.

Without a plan to reduce imports, Pickens warns, the nation faces disastrous
consequences. The world is already producing as much oil as it can, he says. The
United States imports 70 percent of the oil it uses. And while prices are low
now, they will ultimately increase. He expects oil prices could rise to $300 a
barrel within 10 years. Those consequences, he says, are why he's willing to
spend $40 million to advertise and create a grassroots army of supporters geared
toward getting action in Washington supporting his plan in the first 100 days of
a new administration.

During our conversation on the plane, he talked about his plan, why it's
important, and how he expects it to gain support in Washington. Here are edited
excerpts of that conversation:

On why an 80-year-old billionaire would spend his time and money trying to pitch
this plan

"Because I'm a patriotic American. That's what it's all about. I didn't want to
come and go and have the answer to a question as critical as this is to this
country, and nobody else have it and not speak up ... let them go over the side
without me telling them watch out, it's coming. This is the way to solve the
problem. And I truly believe I'm the only one in America that was willing to do
that. I'm still the only one with a plan. (If someone else comes up with a plan)
I'll go to their plan and help them. I don't have to have my plan."

On the prospects of his plan passing in the first 100 days of a new McCain or
Obama administration

"I think the plan makes sense. It's absolutely necessary to have a plan. And I
think Congress is ready to go. (So far, though, neither candidate has thrown
support behind Pickens proposal) You can help. All of you that are in the press,
the media ... put them on the spot. You need to start asking them: "You say ...
we're going to be energy independent if you're president. How exactly are you
going to accomplish this?" and McCain's going to tell you all of it and Obama's
going to tell you plug in hybrids and that's (fine), now you know neither one of
them are going to solve the problem. If I was asking them the questions ... I'd
say, okay, how much will you reduce foreign oil with a plug-in hybrid. You can't
move an eighteen wheeler with it, so how exactly are you going to do it? ... If
I was talking to them directly I would say come on, you gotta be (kidding) me if
you think you're going to reduce foreign oil with plug-in hybrid or nuclear.
None of that stuff's going to do it. You don't really understand the problem
that you're facing...

"I think the people I've talked to, 1,500,000 people (who have signed onto the
Pickens Plan online community), they understand it. Yeah, they understand it...
we're importing 70 percent of our oil and in 10 years it'll be 75 percent. (But)
You won't ever get to 10 years. The whole thing's going to blow up ... (with the
cost of oil soaring to $300 a barrel, twice its price during this summer's oil
shock)... I'm hoping that with help from 1,500,000 people we can show the
urgency that is required to get it done. Let's get it done in 100 days. Let's
not take four years to come up with the answer that we had for you right (now).
You know, if somebody doesn't agree with you, what is it that they don't agree
with? What would it be? I don't know because it's so simple. It's not
complicated at all."

On how he thought of his wind and natural gas proposal

"I used the experience of many years ... It isn't hard to come up with. We only
have one resource that can do it. That's natural gas. Oil would but we don't
have the oil. But when you list all your resources off... use everything that's
American and try to get off of foreign oil... Natural gas can replace diesel and
gasoline. There's nothing else that will do it. (some think) You have a
potpourri of things you can use, but you don't. There's only one thing We're
very, very lucky that it's abundant, it's ours, it's cheaper, and it's cleaner.
Why wouldn't you use it? ...

"I used advisors on how we put the campaign together. (But not on the plan
itself) I went to (Warren) Buffett (and other business and government leaders)
with it. Talked about (it) ... but it doesn't take somebody very long to see the
merit to it. It's not a big selling job. You list the resources available and
there's only one that will do it if you want to get off of foreign oil. You have
one that you're lucky that it's abundant, cheap and clean. If you want to solve
the problem. If you're willing to use foreign oil, that's a different deal...

"If you go back over my record I tried to sell natural gas for transportation
(for decades) and couldn't get it done. When I first started saying, in 88 I
said hey look, it's cleaner, it's cheaper, it's domestic and I thought, well,
who can turn this down? ... the oil companies didn't want it. The chemical
companies didn't want it. And another thing, the reserves (of natural gas) were
questionable until we (came up with a process that opened immense natural gas
deposits like the Barnett shale near Dallas, and other potential deposits in
Appalachia and Louisiana) ... But now you're telling them, 'hey look do you want
to be using foreign oil (or) a domestic fuel' ... I want the president and the
Congress coming in to say, 'hey look, we're going to use a domestic fuel.'"

Do you have the wind farms first, or natural gas for transportation first

"You try to reduce the imported oil as quickly as you can. (So start with
natural gas for big trucks). You don't take it away from utilities. You just let
it happen. Natural gas will move into the best market and the best market will
be transportation. It's available and it's cheap. So it should be an easy sell.
(Wind can then be used to augment natural gas for electricity)."

On the affect of the financial meltdown and falling natural gas prices on wind
and natural gas projects

"Natural gas you can do it without project financing (which is hard to come by,
these days). Wind you have to have project financing. (And wind power is priced
depending on the price of natural gas, which has fallen, making wind a less
attractive investment)... You can't get any money now, to do anything with, the
price of natural gas is so low it kills the wind. So you're sort of knocked out
for two reasons there. But you could go forward with natural gas as a
transportation fuel. (And do the wind power) afterwards ... There are projects.
Some are under construction. They'll go forward. But you won't see any new ones
kicking in."


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