The Pickens Plan: A Windfall for T. Boone?
 

Brownfield Renewal

The Pickens Plan: A Windfall for T. Boone?

The best-laid plans of mice and men often go awry—but those plans are a lot more likely to stay on track when you're T. Boone Pickens.

The 80-year-old Texas oil tycoon rolled out his Pickens Plan for energy independence last summer, pumping in $58 million of his own money to promote the cause of easing America's reliance on high-priced foreign fossil fuels. And despite the staggering drop in the price of oil last fall, along with the collapse of credit markets during a major economic meltdown, Pickens is proceeding apace in his campaign to supplant oil with home-grown wind power and natural gas.

"I want to reduce America's foreign oil imports by more than one-third in the next five to 10 years," Pickens wrote in a Wall Street Journal opinion piece on July 9, 2008, the day after unveiling the Pickens Plan to the media in New York City. "My plan calls for taking the energy generated by wind and using it to replace a significant percentage of the natural gas that is now being used to fuel our power plants."

An energy windfall
Pickens launched his official energy crusade after years of preaching that the days of ample world oil supplies were over. In 2005 he claimed that world oil demand had eclipsed world oil production for good, and predicted that oil prices would ultimately top $100 a barrel. Pickens backed up his opinions with shrewd business moves at his fossil fuel hedge fund, BP Capital in Dallas. He's also the founder and largest shareholder in Clean Energy Fuels Corp., the country's largest supplier of natural gas for fleet vehicles.

And last May, Pickens announced that his Mesa Power Co. had placed an order with General Electric for 667 wind turbines for the first phase of what would be the world's largest wind farm on approximately 400,000 acres in Pampa, Texas. The Pampa Wind Project eventually would be able to generate more than 4,000 megawatts of electricity, which could power more than 1.3 million homes.

The first phase of the wind farm, expected to cost $2 billion, was scheduled to be completed in 2011 but has been delayed because of financing problems, according to Pickens, who said in December that he was "anxious" about the project but still optimistic. "We don't receive turbines until late 2010, so you've got some time for a recovery and we'll see where we go from there," he said in early December, according to a Reuters report.

The Pickens Plan, however, is still going strong after a major advertising and public relations campaign during the summer and fall. Promoting both the plan and his latest memoir, which also advocates for energy independence, Pickens has taken his whiteboard presentation to town hall meetings and briefings around the country. He has pleaded his case to such political heavyweights as Carol Browner, President Obama's designee for White House coordinator of energy and climate policy, and Speaker of the House Nancy Pelosi, D-Calif., and tapped into the power of the Internet with an active blog on the Pickens Plan Web site, along with Facebook, Twitter and other e-community tools.

Pickens Plan basics
The Pickens Plan itself is based on the premise that the United States is the Saudi Arabia of wind power, according to Pickens. "In 2008, the Department of Energy issued a study that stated that the U.S. has the capacity to generate 20% of its electricity supply from wind by 2030. I think we can do this or even more, but we must do it quicker," Pickens wrote in the Wall Street Journal.

The Pickens Plan advocates building wind facilities from the Texas Panhandle to North Dakota at a cost of $1 trillion, plus another $200 billion to construct the infrastructure to transmit the energy, which could supply 20% of the United States' electricity. At present, wind power accounts for enough electricity to serve more than 4.5 million households—about 1% of current demand. Boosting the use of wind power would also help revive the rural areas where wind farms are built, contends Pickens, without threatening food production because the wind turbines don't interfere with farming or grazing.

Generating more electricity through wind power would free up additional cleaner, safer, cheaper natural gas, which currently produces 22% of the country's electricity. That natural gas could then be put to work fueling transportation, according to the Pickens Plan, thus reducing U.S. demand for foreign oil. Pickens estimates that the United States could replace more than one-third of its foreign oil imports within 10 years by putting his strategies into action.

Friend or foe?
Critics have charged that an obvious hitch in the Pickens Plan is where the electricity will come from when the wind isn't blowing. Pickens acknowledges that wind power would need to be supplemented with another power source, such as gas or coal, to provide 24-hour-a-day electricity, but maintains that it can be done profitably.

Others contend that the United States has a long way to go before drivers will be lining up to pump natural gas into their tanks. There aren't many U.S. cars currently made to use natural gas as fuel, and natural gas stations where consumers could fill up are few and far between. Pickens, however, has advocated for tax breaks that could help make natural gas a more attractive alternative to both suppliers and consumers

The Pickens Plan has already garnered support from at least 12 governors, 160 mayors and 50 congressmen, the Fort Worth Star-Telegram reported in early January. And a national survey of registered voters in October, conducted by Public Opinion Strategies and Hart Research, found that 74% of voters said the Pickens Plan will contribute "a great deal" or "a fair amount" to helping solve the nation's energy problems, with 51% saying it is "very" important for the Pickens Plan to be included in an overall strategy to handle U.S. energy problems.

Pickens has conceded that implementing his plan to reduce foreign energy dependence would take a mighty effort by all concerned, but he contends that his "bridge to the future" is a viable option. As Pickens himself likes to say, "A fool with a plan is better than a genius with no plan."

Elizabeth Brewster is a regular contributor to Brownfield News & Sustainable Development magazine


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