T. Boone Pickens presents his energy plan to Cleveland

Principal author:: John L. Clark

Abstract

As the first invited guest of the Town Hall of Cleveland, T. Boone Pickens talked about his energy plan. In his presentation and the following question & answer session, Pickens made it clear that his plan is largely similar to the existing approach—requiring increasing exploitation of fossil fuels, giving a nod to renewable sources, and stubbornly ignoring the problem of growth—but focusing on domestic resources instead of foreign ones.

T. Boone Pickens, the oil mogul who woke up two years ago with a drive to provide for the energy needs of the United States with resources from the United States, stumped for his energy plan to Cleveland at the first of the new Town Hall of Cleveland series yesterday. Sponsored by Case Western Reserve University, it seemed like this session was attended largely by students. Pickens's eponymous Plan consists primarily of switching from (mainly, and increasingly) foreign oil to domestic natural gas. “The economy is helped any time you are on your own resources.”

Pickens spent the lecture portion of the session telling us his story, convincing us of his commitment, and then illustrating the difficulties that he has faced thus far on his crusade. He has donated $70 million of his own wealth to the cause, but he has faced an uphill political battle. Referring to politicians, he joked that “it's real hard to hold their attention. ... The first thought in their head in the morning and the last at night is getting reelected.” With great nationalistic poise, he emphasized that the United States is economically dependent on foreign interests, and that this is increasingly dangerous. “We've never been tasked to figure out energy.”

Pickens noted that the overwhelming majority of our oil use is for transportation fuel, and he claimed that the infrastructure is in place to allow us to switch over to using natural gas liquids (NGLs) for a transportation fuel if the appropriate investment is made to convert vehicle engines to use this fuel. His plan targets the extensive United States fleet of shipping trucks ("18-wheelers") for an initial retrofit. According to Pickens, this would pay off fairly quickly because a volume of NGL is currently much cheaper than an equivalent amount of diesel fuel. He predicts that in 10 years, a thousand cubic feet (MCF) of NGL will cost $7–8, in contrast to $150 for a barrel of oil.

In the Q&A portion of the Town Hall, one question asked about the utility of an increased gas tax to encourage migration off of oil. Pickens emphasized that he is a Republican, but said that he had decided to stop working politically in order to focus on his energy plan. With that background, he said that he thinks gas taxes are a good idea. “Go ahead and increase it. ... I would pick [gas] number one to tax.” That said, he hinted at the fact that such a tax is extremely unpopular.

The moderator summarized a number of questions about the continued use and availability of domestic oil. Pickens firmly believes that the “oil industry has done a good job”. He emphasized that the oil accidents that we've seen, historically, have been remarkably few, and those were caused by operator error. “Exxon Valdez ... was [the fault of] a drunk boat driver”. Pickens thinks we'll be lucky if we get 2 million barrels of oil a day from offshore drilling in the lower 48 states (and he cited a trusted advisor who said that number should be reduced to 20,000), and that we are pipeline-limited such that “all you can produce from Alaska is 2 million barrels a day”. We currently use about 21 million barrels of oil a day in the United States.

Pickens said that as far as oil availability goes, we are “blessed to have Canada as a neighbor” because they are so willing to provide us with resources. He suggested that we create a North America energy alliance, which would help to “make their oil and gas available to us”. He pointed out that Mexico may become an oil importer soon.

The moderator relayed a question about the comparative global warming effect caused by using natural gas instead of oil; Pickens, however, spoke to the concerns about pollution from natural gas extraction. He denied any problems from fracking as “bogus”. “Fracking wells is safe. ... I don't know one instance where the aquifer was damaged.”

Although Pickens includes wind energy as part of his plan, it only provides 20-25% of his imaginary future energy portfolio. He excoriated those who want to eliminate use of coal for electricity. “Be real about it. ... It isn't even possible to do that. ... You have to use coal: no doubt about it. ... No way you're going to be able to get away from fossil fuels.”

When asked about the possibility of ramping up the use of nuclear energy in the United States, Pickens expressed general support. The question had emphasized that nuclear energy was clean, and Pickens agreed: “no question [nuclear power] is clean”. He pointed at the French model, noting that they produce 80% of their electricity from nuclear sources, although he joked that “I very seldom like to look at France”. Pickens did not mention the fact that France uses electricity for powering trains. In fact, he did not mention mass transit or freight rail as part of his plan at all.

Although I submitted such a question, the moderator never asked Pickens when domestic natural gas extraction is likely to peak in the United States, and how his plan accounts for that situation in the face of economic growth pressure.