Wednesday, July 9, 2008

T. Boone Pickens proposes excellent energy plan

In yesterday's Wall Street Journal, oilman T. Boone Pickens came up with an excellent energy plan. He begins by identifying the problem succinctly:

Each year we import more and more oil. In 1973, the year of the infamous oil embargo, the United States imported about 24% of our oil. In 1990, at the start of the first Gulf War, this had climbed to 42%. Today, we import almost 70% of our oil....

(I)f we don't do anything about this problem, over the next 10 years we will spend around $10 trillion importing foreign oil. That is $10 trillion leaving the U.S. and going to foreign nations, making it what I certainly believe will be the single largest transfer of wealth in human history.

He then proposes the building of windmills in the Rocky Mountains. Specifically:

How will we do it? We'll start with wind power. Wind is 100% domestic, it is 100% renewable and it is 100% clean. Did you know that the midsection of this country, that stretch of land that starts in West Texas and reaches all the way up to the border with Canada, is called the "Saudi Arabia of the Wind"? It gets that name because we have the greatest wind reserves in the world. 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....

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. Today, natural gas accounts for about 22% of our electricity generation in the U.S. We can use new wind capacity to free up the natural gas for use as a transportation fuel. That would displace more than one-third of our foreign oil imports. Natural gas is the only domestic energy of size that can be used to replace oil used for transportation, and it is abundant in the U.S. It is cheap and it is clean. With eight million natural-gas-powered vehicles on the road world-wide, the technology already exists to rapidly build out fleets of trucks, buses and even cars using natural gas as a fuel. Of these eight million vehicles, the U.S. has a paltry 150,000 right now. We can and should do so much more to build our fleet of natural-gas-powered vehicles....

Here is what he suggests the government should do:

The future begins as soon as Congress and the president act. The government must mandate the formation of wind and solar transmission corridors, and renew the subsidies for economic and alternative energy development in areas where the wind and sun are abundant. I am also calling for a monthly progress report on the reduction in foreign oil imports, as well as a monthly progress report on the state of development of natural gas vehicles in this country.

Pickens does not mention increased nuclear power, which should be part of the eventual energy mix. A nuclear plant, however, takes 4 to 6 years to construct. Pickens plan would begin to improve our energy situation much more quickly and could give us time to develop the other parts of the long-term solution. There is no reason why the United States can't eventually become completely self-sufficient in energy production.

Pickens may not realize it, but our failure to deal with mercantilism has left the United States facing an eventual energy crisis. If we were still a country with a strong export-oriented industrial base, we could export manufactured goods and use the proceeds to import oil. But given the fact that we have been giving away our industry to the mercantilist countries of Asia, especially Japan and China, we don't have the exports needed to buy energy. We need to vastly increase our own production of energy before the dollar collapses in world markets, because after the dollar collapses we won't be able to afford imported energy and will have to ration gasoline and oil.

Follow the following link to read Pickens commentary:


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