T. Boones's T-Bone

Some thoughts about T. Boone Pickens Plan:

1) The bulk of Pickens assets are in U.S. and Canada, with Oklahoma and Texas the central focus. These are very mature areas for oil, but still have some natural gas to be developed. So, it is a way for him to make more money, a lot of money. If he has his way your home heated by natural gas will see a 200% price increase on the monthly bill. So, be careful what you wish for. $100 for the month of December will be $300.

2) 15 to 20 years ago he made a big push to use more natural gas for electricity generation. At first I really liked this idea, until I noticed that the gas bill went up. He made a lot of money from this idea, while the average person with natural gas in their homes had less.

3) I advocated 15 years ago that all government entities make it mandatory for their fleets to convert to natural gas (as did Pickens), but we still have not done that, although we have gotten closer. If every city, county, state, and federal vehicle was on NG, then that would free up a good chunk of fuel. This also helps with infrastructure, if these large government fleets converted, the fueling stations could be at key central locations (all police cars fuel up at the sub-station, all postal trucks at the post office, county vehicles at the county yard, etc.). In this way you do have to worry as much about having stations all over the place to serve the retail consumer.

4) But, if I have to choose between money going to Iran, Iraq, Qatar, UAE, etc. and Northwestern Colorado's Uinta-Piceance Basin, or even Alberta then I choose the latter. At some point the money leaving this country might not come back.

5) The power gird in this country needs to be over-hauled, re-worked, and upgraded. We need Washington to institute a national investment in the power grid, and do a Roosevelt type program to get this done. It will pay jobs now, and electricity stability later.

6) These can't be the only answers, only part of the solution. If we built some nuclear power plants to compensate for the increased use of natural gas, this would be even better. The bottom line is that T. Boone Pickens' plan is self-serving, of course this is his money and what this country if all about, but it may not be the most beneficial to all Americans.

We MUST have a National Energy Plan, that states by 2020 where we are going. And by 2050, we must be there: 15-20% solar, 15-20% wind, 15-20% geothermal, 15-20% nuclear, and some legacy coal and NG. T. Boone Pickens' idea is just a short term idea to make him more money and less for the Middle-East. As for passenger vehicles, we must also have a balanced approach: 33% electric, 33% hydrogen, and 33% NG (government and other large fleets). Heavy-Duty trucks will probably have to stay on diesel (but these should be the only ones). We must also improve technology in rail freight transport, rail is three times more efficient than long haul trucks, and if we improved the technology, we might easily get that to five times. Downside, it employs a lot less people, but there is also a shortage of long-haul truckers and future demographics point to an increasing problem in finding more drivers. This most likely means that emigrants from Mexico and elsewhere will start filling this void. Instead of New York City taxis, they will be driving for Roadway and ABF. At some point the large trucking companies will see this and start recruiting in places like Monterrey, they'll get needed bodies and pay less for drivers.

So, again there are no easy answers, and we need to do a lot of solutions. We NEED nuclear, we need to drill in North America. Did you know that most natural gas outside of North America and Western Europe is still flared (burnt off into the air), including most all off-shore rigs? When do we stop this practice and capture this "by-product" of off-shore drilling? Probably when T. Boone Pickens' gets his way and the price of natural gas goes to $20.00 (last quote $7.449).

Don't forget we also need to keep pushing to go back through existing technology, like the lighting and heating in buildings and upgrade them to newer technology, which can save from 15% to 30% of current electricity usage!

Rob Bradley of the Institute for Energy Research article: "Picken's plan leaves U.S. energy security blowing in the wind: "The Pickens plan relies on special government mandates and subsidies to pick the pockets of American taxpayers and ratepayers. Wind power is inefficient, unreliable, expensive, and a burden to the electricity grid. Natural gas vehicles are a niche product at best. As such, this plan is Robin Hood in reverse: taking from average Americans to subsidize wealthy political entrepreneurs. Finally, the Pickens Plan misdirects the public and policymakers from real solutions: less government for more abundant and affordable energy."

The CATO Institute claims that instead of allowing the market to work, Pickens wants government to limit imports of foreign oil along with installing the wind plants so that he can become richer at the expense of consumers. He also opines that if wind power were a sensible economic investment, then it would not require the "lavish federal and state subsidies already in place or the additional largesse sought after by Mr. Pickens." He says if energy production would be left to the free market, then "Mr. Pickens would be out a lot of money, which is probably why Mr. Pickens wants to hard-wire the market to consume the things he's investing in and have the government lavish him with subsidies in the course of doing so. I wish Mr. Pickens well in the course of his wind energy business, but I see no reason why taxpayers, ratepayers, or consumers ought to be forced to sacrifice in order to fatten his already ample bank account."

Kevin Drum, in an opinion piece for the The Washington Monthly, also questioned Pickens' motives. He speculates that Pickens actually wants land seized by eminent domain so that he can obtain it for free to transport sellable water to Dallas.

The Intelligent Community Website argues that there are several problems with the natural gas portion of Pickens Plan, including the following: 1) Natural gas is not a renewable resource, so substituting one nonrenewable resource for another will ultimately subject the United States to the same issues presented by oil; 2) Natural gas, while cleaner than gasoline, still produces significant greenhouse gases, which will ultimately subject the United States to external costs which need to be paid by taxpayers; 3) A better use for natural gas is to provide a backup to wind power, not to power cars. 4) Natural gas is burned far more efficiently in power plants than in internal combustion engines, and would be better used to power electric cars.

8) FINALLY: You had better buy some natural gas shares, like EnCana Gas, Chesapeake Energy, Devon Energy, EOG Resources, Apache, etc. (or a natural gas fund or ETF), and companies shares that make the wind turbines (General Electric; where T. Boone is buying his; ABB, Vestas, etc., or a wind fund or ETF) and PRAY that the capital gains and dividends from these investments will pay for the increase in your power consumption (natural gas bill) going forward.

Labels: , ,

Comments: Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?