It’s a sultry afternoon in Dallas, Texas, and T. Boone Pickens, the legendary oil wildcatter, is sitting in his boardroom, staring at a television screen, watching a cable news commentator tell his viewers that America must drill for more oil offshore and in Alaska. “We have to get to every drop of our own oil that we can,” the commentator declares. “Otherwise, we’re in real trouble.”
“Come on,” Boone snaps, tossing a pen on the table. “Has that guy not been listening? Does he still really think some more drilling is the answer?”
What? An oilman decrying oil? You would think that a man who made several fortunes in the oil business (and whose net worth today he estimates at close to $4 billion) would always be found singing the praises of black gold. Yet since last May, Pickens has been mounting a fierce national campaign to convince us that it’s time to rely on other sources of energy. You’ve no doubt seen his network television commercials in which he claims that the country can no longer afford, at a cost of $700 billion a year, to import 70 percent of the 21 million barrels of oil it uses every day. You’ve also probably heard him say that there is not enough oil left in the United States to solve our energy needs. (“We cannot drill our way out of this problem no matter where we decide to drill,” he loves to say.)
What is perhaps most surprising, however, is Pickens’ audacious plan to create more new domestic energy sources. The Pickens Plan, as it is now known, calls for Congress and the next presidential administration to spur businesses to build giant wind farms in what he calls “the wind belt”: the enormous corridor that extends the length of the Great Plains from Texas to the Canadian border. He wants the wind power that will come from those farms to replace the natural gas that we now use to make electricity. (About 22 percent of America’s electricity each year comes from natural gas; the other 70 percent comes from coal and nuclear power, and the rest comes from other smaller sources.) He then wants to use the freed-up natural gas to be used to power our automobiles.
Such a move, Pickens asserts, would replace more than one third of our foreign oil imports, saving us close to $300 billion a year. “And we can do it in ten years,” he says. “All we have to do is get our government’s leaders behind the plan. We need to get them to provide tax incentives to all the companies that want to do wind energy, or build automobiles that can run on natural gas, or re-do their gas stations so that they actually provide natural gas instead of just gasoline.”
To that end, Pickens says he and his followers (so far, more than one million citizens have gone to his website, pickensplan.com, to sign up for what he calls the New Energy Army) are going to descend on Washington within the first one hundred days of the new Barack Obama administration and hold a major demonstration demanding the adoption of the Pickens Plan. “Every president since Richard Nixon has said, ‘Vote for me, and we’ll be energy independent,’ but not one of them has done a damn thing about it,” growls Pickens. “Well, that’s about to change.”
Pickens is so convinced his plan will work that he’s putting his money where his mouth is. Earlier this year, he started work on what he calls “the biggest deal” of his career: the construction of the world’s largest wind energy farm, containing as many as 2,000 wind turbines spread over four Texas Panhandle counties that, when completed, will cost $10 billion and will generate enough electricity to power more than 1.3 million homes. He’s also the majority stockholder and board member of California-based Clean Energy Fuels Corp., North America’s largest provider of vehicular natural gas.
But for all of Pickens’ enthusiasm, is it realistic to believe the country will make such a wholesale change in its energy policy? Can the federal government really do enough to promote more wind energy and more natural gas automobiles? And even if the Pickens Plan is enacted, will it work? Will it come close to solving our energy problems? Or should we be turning to other energy sources such as nuclear and solar power, or perhaps electric cars?
Here is what Pickens, and other experts, have to say:
Pickens is indeed born and bred in oil. Raised in the Oklahoma oil patch (his father was a landman), he immediately went to work as an oilfield geologist after his graduation from Oklahoma State University in 1951 and started his own exploration and production company a few years later. But he has no illusions abut the oil business. “There’s always a declining production curve with oil,” he says. “No matter how big of an oil field you find, it gradually depletes. That’s why I like wind. It’s not only clean and renewable, it never declines. The wind never stops blowing.”
So far, wind produces still only a little over 1 percent of the country’s total amount of energy. The Department of Energy claims the U.S. has the capacity to produce wind power in 45 states, easily enough to generate at least 20 percent of our nation’s power. One 3-megawatt wind turbine, which stands 410 feet tall, with blades that stretch 148 feet in length, can produce the same amount of annual energy as 12,000 barrels of imported oil. What’s more, those turbines produce no air or water pollution and do not interfere with land use.
And as a side benefit, construction of wind farms would yield billions of dollars’ worth of economic development to the country’s stressed rural economy, creating thousands of jobs and bringing more income to farmers who lease their land to their new wind-energy partners. But the wind doesn’t blow 24 hours a day. Nor can power generated by wind be stored. That means electric companies that buy wind energy will always need backup sources of power to fill in the gaps when the wind does not blow.
The most daunting challenge, however, centers on the fundamental question of how customers will actually get the electricity generated by the wind turbines. For the Pickens Plan to succeed, the U.S. transmission grid will need to be overhauled. Thousands of miles of high-voltage transmission lines, at a cost of tens of billions of dollars (and maybe more), will have to be built to carry the electricity from turbines clustered on the prairies in America’s heartland to distant cities, where the electricity is most needed.
Pickens is undeterred. “What we need is a commitment among our leaders that’s equal to the Eisenhower administration’s commitment to constructing the Interstate Highway system,” he says. “We came together to get our interstates built. And we can come together to get a wind energy system in place.”
Prior to Pickens’ advertising campaign, many Americans had no idea that vehicles could be retrofitted to run on compressed natural gas, or CNG. Now, just about everyone has heard the statistics: the price of natural gas as an automotive fuel is not only half that of gasoline, it burns much cleaner, releasing one-third fewer carbon gas emissions than gasoline. “The best thing of all is that all the natural gas we need can be found right here, not over in the Mideast,” Pickens says. “How can you beat that?”
There are more than 8.7 million natural gas vehicles operating worldwide, yet only 120,000 of them are in the United States. And almost all of those are heavy-duty buses and trucks. Automakers certainly know how to build natural gas cars: the Honda Civic GX (which Pickens often drives these days) is rated as the cleanest internal-combustion vehicle in the world. But the reason you don’t see many of these cars, of course, is because there are very few places to fill them up. Only 1,600 natural gas stations are scattered throughout the country.
Clearly, an entirely new infrastructure has to be built to get natural gas cars on the road. Pickens wants the federal government to offer tax credits and other incentives to gas stations that would offer natural gas as a fuel, and he also wants tax breaks to automakers to build the cars that would run on it. Without waiting for government action, his Clean Energy Fuels is building 35 to 40 filling stations across the country. Recently, the company purchased a Toronto firm that sells a home fueling device which lets people gas up at home via a natural gas line (sort of the way an outdoor barbeque is connected to the home’s natural gas line). But it’s expensive: the machine costs about $5,500, including installation ($1,500) and shipping ($200).
There is also the question of just what would happen to the price of natural gas if the Pickens Plan were enacted. Some experts believe that a larger demand for gas would cause the price to climb—and the price increase would inevitably be passed on to those who use natural gas to heat their homes.
Pickens acknowledges gas prices would rise to some degree, but he says with the recent discoveries of huge natural gas shale fields around the country, the rise would not be significant—certainly not compared to the way the price of oil is going to rise. “It’s not just us but countries like China and India that are demanding more and more oil, which means the price of oil is destined to rise. If we maintain the status quo and come up with no other plan, we’ll inevitably see the price hit $200 a barrel, which means America will be spending $1 trillion a year for our foreign oil exports. I sure as hell would rather have that money circulating in our economy than in Venezuela and Saudi Arabia.”
OTHER ALTERNATIVE ENERGY SOURCES
Although the Pickens Plan focuses on wind and natural gas, Pickens is hardly averse to the country using other renewable energy sources. “I’ll take just about anything as long as it gets us off foreign oil,” he says.
Here’s his take on some of the other alternatives:
Solar: Boone believes more solar energy plants should be built in the southwest, which he calls the “solar corridor.” Solar energy, he says, has all the benefits of wind energy: it’s constantly renewable. But it has the same problems. For one, a whole new system of transmission lines would have to be built to get the electricity from the southwest to the cities. Pickens believes the government’s focus should first be on a wind program—(studies do conclude that wind turbines can produce more electricity than solar panes)—and then later build a strong solar program.
Nuclear: The 104 nuclear power plants now operating in this country supply nearly 20 percent of the nation’s electricity. During the presidential campaign, the centerpiece of John McCain’s energy plan was the construction of 45 more nuclear plants by the year 2030 at a cost of between $6 to $7 billion per plant. He called nuclear power “safe and clean, and it creates hundreds of thousands of jobs.”
There is no question that nuclear energy is one of the best ways to minimize serious harm from global warming that comes with the large amount of carbon emissions due to burning fossil fuels. Pickens says he supports nuclear power, but he does say the government needs to be certain it knows what to do with the radioactive waste it produces. (Scientists are split about the safety of the present nuclear-waste disposal plan: burying it deep in a mountain in Nevada.) He adds, “A nuclear plant can’t run a car or an 18-wheeler.” His point: nuclear power only provides electricity. If there is no additional plan to get rid of our oil addiction, he says, “then we are just spinning our wheels.”
Ethanol: Pickens is not wild about ethanol, a gasoline substitute made from corn. He says if we distilled our nation’s entire corn crop into ethanol, the fuel produced would displace less than a sixth of the gasoline we currently guzzle. As for other biofuels on the market, he points out that they produce only 85 percent of the energy of gasoline, require retrofitting car engines, and are incompatible with existing oil pipelines, meaning they would be almost impossible to move around the country. “A natural gas car is so much more efficient,” he says.
Electric Cars: Pickens does not deny that automobiles powered by electric batteries could radically transform the use of oil in the United States. In fact, automakers are working hard to improve battery and electric drive technologies. Chevrolet promises that its Chevy Volt plug-in hybrid will be in showrooms in the fall of 2010 (at a cost of $40,000 each). Another company—A123 Systems—will soon be supplying plug-in retrofit kits for the Toyota Prius hybrid that will enable the cars to run solely on electricity for 40 miles and increase gas mileage to 100 miles per gallon.
But Pickens argues the country “still has a long way to go” before the highways are full of electric cars. He notes that Barack Obama’s goal during the presidential campaign was to get one million plug-in hybrids on the road in ten years. “That’s a drop in the bucket, considering that we’ve got 250 million vehicles in America,” Pickens notes. “With the right government incentives, we can start putting more natural gas cars on the road today.”
Pickens is very aware that critics claim he is pushing wind energy and natural gas vehicles only because he has a monetary interest in seeing them succeed. And yes, he admits, he does want his projects to make a profit. “But I want to make money so that other entrepreneurs will realize they can make money doing the same thing,” he says. “Come on, I’m eighty years old. I’ve got more money than I’ll ever need. I’m pushing the Pickens Plan because it’s the right thing to do for this country. No, my plan is not perfect, but at least it’s a plan. And right now, this country has no plan.”
In the past few months, as the world financial system has unraveled and a steep drop in oil prices has eased the public’s alarm about energy costs, Pickens has found it more difficult to keep the Pickens Plan in the spotlight. But he insists he is not letting up. He is spending an average of five days a week on his jet, crisscrossing the country, meeting with everyone from top political leaders to college students, warning them of the crisis that is on its way.
“The bottom line is that total global production of oil is at 85 million barrels a day; total global demand is now hitting 87 million barrels a day, and we can’t make up the difference,” he says. “It’s frightening—I mean, flat-out scary. Is that what we really want for our future? Is that what we really want?”
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