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Pickens' Plan Is Bold Too Bad It Won't Work


By Loren Steffy
Houston Chronicle
July 10, 2008


Billionaireoilman Boone Pickens supports building wind farms across nation.

Houston dodging $4-a-gallon gasoline so far Loren
Steffy's business blog Pickens Plan's focus differs from candidates Track
the current price of oil in Energy The Pickens Plan isn't the boon for
energy independence that it purports to be.

Dallas billionaire investor and oilman-turned-wind-farmer Boone Pickens on
Tuesday unveiled an audacious plan that he hopes will prod policymakers
into a more realistic discussion of energy issues.

It calls for, among other things, spending $1 trillion to build wind farms
from the Texas Panhandle to the Canadian border that he says would meet 20
percent of the nation's electricity needs.

With the generation from those turbine fields, we could shift natural gas
that's used for generating electricity to powering cars and trucks. That
would reduce our oil imports by 38 percent, Pickens claims.

The plan is riddled with potential pitfalls, but fed by a $50 million
media campaign, that may not matter. At a time when presidential
candidates and lawmakers eschew meaningful discussion of our mounting
energy problems, Pickens' plan is stirring it up.

His Web site, www.pickensplan.com, has generated "phenomenal" traffic and
already inspired at least one supporter-led meeting at an Applebee's in
Georgia that attracted dozens of people, said spokesman Jay Rosser.
"My point is, I haven't seen a plan in 40-plus years that's going to solve
the problem I'm talking about," Pickens told me.

The proposal is typical Pickens, who's known for bold predictions and
grandiose proposals. His plan for a billion-dollar water pipeline from the
Texas Panhandle early in the decade still doesn't have any takers.

With prices soaring and America importing 70 percent of its oil, something
has to be done, he argued.

"Oil now is going to look cheap in a few years, " he said. "We need to get
ahold of the situation ourselves."

It's hard to grasp, though, how parts of the plan would be implemented.
Assuming all the rights to millions of acres could be acquired and the
wind farms built, there's still the problem of wind itself. It doesn't
always blow.

A recent study by Cambridge Energy Research Associates found that wind
power is least available between June and September, the peak months for
electricity consumption.

When the turbines are becalmed, we'll need other power plants primarily
gas-fired ones, which can be started more quickly than other types of
generation to meet demand.

What's more, someone has to pay for building transmission lines to carry
the power from the prairies. Guess who? In Texas, the cost of new
transmission lines is born by consumers, not the generators.
Pickens argued that wind technology will improve as more farms are built,
and as commodity prices rise, it will become a cost-effective power source.

"As it moves in, the natural gas will move out," he said. "The price of
natural gas will still be better for vehicles and still be cheaper than
foreign oil."

Pickens has championed natural gas vehicles since he converted his
Cadillac and drove around Dallas in the early 1990s, but it's unlikely
average drivers would do the same.

Thousands of service stations would have to spend millions to install new
pumps and storage facilities.

Why don't we just switch to plug-in hybrids, which automakers say they
already have in development? We already have the infrastructure we need in
our wall sockets.

Then the natural gas generation already in place could still be used and
we'd decrease our foreign oil dependency at the same time. Wind could
still be used to augment generation as it becomes more viable.
Pickens is quick to acknowledge that his plan isn't the only solution.

"If there's a better one, get it out there and let's talk about it," he
said.

His plan follows his own businesses. His Mesa Power is pouring about $12
billion into what would be the world's largest wind farm near Pampa,
Texas. He's on the board of the country's biggest provider of natural gas
for vehicles, and his hedge fund company, BP Capital, with some $4 billion
under management, has bet heavily on natural gas producers.

Depending on your view, that either makes his plan self-serving or shows
he's willing to put his money where his mouth is.

I don't begrudge Pickens his profits. He's a successful businessman, and
if he gets richer from solving America's energy problems, so be it.
He wanted to get the country talking, and in that, he's succeeded. His
plan favors alternative fuels that would be better for the environment and
lessen our dependency on foreign oil.

As such, it's a good starting point for discussion and broadening the
public understanding of the problems even if doesn't work.

 

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