For the Pickens Plan to Work, People Have to Misunderstand It

Originally posted at The Seminal.

Last week I mentioned how T. Boone Pickens is trying to pressure Barack Obama into a flawed energy policy. But be forewarned, Barack Obama is not the only target for the Pickens Plan misinformation campaign. The only thing that can stop the Pickens Plan from being implemented is the taxpayers citizens understanding it. If they understand the Pickens Plan, they will not support it.

How can you tell an argument has hit a little too close to home? The bad guys start getting defensive and squeamish. This is exactly what happened to Mitch Jackson, Director of environmental affairs and sustainability at FedEx, when he wrote this well thought out blog post disputing the merits of natural gas vehicles point by point. Here are the three strongest points he made, in my opinion:

3. To use natural gas vehicles, we, as a nation, would have to build a completely new fueling infrastructure for vehicle fueling.

6. Natural gas, like oil (which produces diesel fuel and gasoline) is a fossil fuel which emits carbon emissions when burned.

7. Natural gas, while plentiful within the U.S., is, like oil, a fungible commodity - meaning that it can be transported and sold in other markets that require natural gas - including foreign markets. So, no matter that the fuel would be sourced locally in the United States - its price and availability, again, like oil, would be influenced by foreign demand.

The crack team over at the Pickens Plan responded as could be expected, by crafting a long-winded and rambling blog post, throwing out straw men and using deceptive language to create the illusion of a legitimate debate on the virtues of natural gas vehicles (NGV's). To be clear, among those who are actually interested in transitioning to a secure and stable energy and transportation policy, there is no debate. Nobody who knows what they are talking about really thinks it makes much sense to replace our dependence on one dirty fossil fuel with another.

For now, let's see how the first argument stacks up.

Jackson writes:

3. To use natural gas vehicles, we, as a nation, would have to build a completely new fueling infrastructure for vehicle fueling.

Pickens Plan writes:

Finally, Jackson questions the practicality of building a nationwide natural gas fueling network to power our vehicles. What Jackson fails to realize is that, unlike any other alternative to diesel or gasoline, the nation's natural gas pipelines provide virtually every American consumer or fleet, public or private, with an opportunity to fuel because the backbone of the fueling infrastructure already exists. This is how the rest of the world increased their natural gas vehicle populations by over 300 percent within five years totaling 8.6 million vehicles.

So wait, the argument is that 'natural gas is the only alternative fuel with a backbone of a distribution system already in place'? It's not clear whether the Pickens people are familiar with plug-in hybrid electric vehicles (PHEV's), which can go 40 miles without using any fossil fuel on a quick charge from your standard 110 volt outlet at home.

The Pickens people must also not be familiar with what is going on in Utah right now. Questar Gas Co., which operates a network of 19 natural gas refueling stations in the state, has been providing people who drive NGV's with fuel for less than it costs them. For 20 years, people in Utah who didn't have NGV's were subsidizing the fuel for their neighbors. The reversal of this policy, which is now being mandated by the state's Public Service Commission, is expected to increase rates from 80 cents per gallon to $1.43 per gallon, within six months. NGV drivers are outraged:

I trusted state agencies to provide stable/reasonable pricing for motor vehicle use of natural gas," wrote Michael Millet, a professor of automotive technology at Salt Lake Community College. "If I knew you were going to jack the rate up so high, I would have not gone to the trouble to convert or pay for the expensive equipment to burn natural gas."

This episode is an excellent example of the fact that natural gas vehicles can not pay for themselves. Whether it is taxpayer money in the form of subsidies or consumer money in the form of higher utility rates, any widespread effort to use natural gas as a transportation fuel would be dependent on transferring large quantities of wealth to natural gas companies who don't like us. T. Boone Pickens will never tell you this because for his plan to work, you have to misunderstand it. Look at what he puts his money behind if you don't think Boone is out to line his pockets with taxpayer money.

By implementing the wind investments and electric grid modernization Mr. Pickens advocates, while replacing our consumer and commercial vehicle fleets with electric vehicles and plug-in electric hybrids, we would essentially be able to fuel our vehicles with wind. Wind power is among the cleanest and most abundant forms of energy at our disposal. Any additional capacity generated by wind (solar, geothermal, hydro, etc.) should be used to take coal-fired power plants off the grid, starting with the dirtiest ones first. Using sustainable energy sources to replace electricity from natural gas, rather than replacing mean coal, is a fundamentally inefficient way to address our energy security.

Richard Kolodziej, president of NGV America, explains the crux of the problem faced by Pickens and others who have placed major bets on natural gas.

Because there are so few natural-gas vehicles, outside of commercial or government fleets, fuel retailers don't have much incentive to sink $500,000 to $750,000 into a natural-gas refilling station capable of handling cars as rapidly as a conventional gas station can.

There are currently about 1,100 natural gas filling stations in the United States (search by zip code here). There are about 115,000 gasoline stations in the United States. As Jackson mentioned, the filling stations and the NGV's themselves represent a chicken and egg problem: neither makes sense without the other. For natural gas to be as ubiquitous as gasoline and diesel currently are, someone would have to pay for over 100,000 natural gas filling stations. At a low-end estimate of $500,000 each, that is an investment of $50 billion. Building just 20,000 natural gas filling stations would cost $10 billion or more. Who do you think is going to pay for that? It won't be T. Boone Pickens, I promise you that.

Follow Josh Nelson on Twitter: www.twitter.com/josh_nelson

Comments

[LeaderofMen]

You really have to ask yourself what the author of this article is driving at (get it?).

We CANNOT sustain our economy on foreign oil. BURNING foreign oil must come to a halt ASAP.

It must come to an end.

Now... tell me an alternative that is distributable to 300+ million Americans to meet their transportation needs that doesn't rely on FOREIGN inputs, FOREIGN dictators, DOMESTIC multinationals that could give a rat's ass about YOUR pocketbook, and can be put into production with a minimal amount of economic pain.

YOU CAN'T DO IT.

Hybrids (there are two in my garage right this second) still rely on FOREIGN oil. Until my hybrid starts running on unicorn dust, I will back any alternate plan that removed FOREIGN oil out of the equation.

[mjt218]

http://www.eei.org/magazine/EEI%20Electric%20Perspectives%20Article%20Listing/2008-11-01-DashGas.pdf

pretty good read on natural gas pricing

[Prole-NY]

Mitch Jackson's "well thought out blog post disputing the merits of natural gas vehicles" (Josh's words, not mine) omits to mention that natural gas produces about 71% of the CO2 emissions of diesel fuel for the same energy output - ie switching to natural gas from diesel reduces CO2 emissions by about 29%.

There are also other emission reductions, but this one comes from the simple difference in the ratio of carbon to hydrogen in methane and diesel.

[Sumocat]

The biggest misunderstanding about the Pickens Plan appears to be the idea that it's supposed to be "green". That is not its purpose; its focus is energy independence. Yes, that means tapping renewables, but the focus is tapping abundant local sources, which includes natural gas. That NG is a fossil fuel has no bearing on the plan's goal.

If we could power all our automobiles with electricity, that would be a key element of the plan, but it can't. Electric vehicles are great for personal transportation, but we currently cannot power buses and trucks on electricity. However, buses that run on NG are in use now. Bio-diesel is an option, but we don't have the supply. NG is abundant today.

Another misunderstanding is the view that the Pickens Plan is designed as a "be all, end all" plan for the future. That's not true. The plan states: "[NG] is a bridge fuel to slash our oil dependence while buying us time to develop new technologies that will ultimately replace fossil transportation fuels." Does the Pickens Plan solve our long-term needs? No, but it's not supposed to.

Pointing out limitations already acknowledged in the plan is wasted effort unless alternatives to its actual goals as also offered. Renewable energy and electric vehicles are the future, but what happens in the meantime? Continue drinking foreign oil or transition to local fuel? Answer those questions and then we'll have a real answer to the Pickens Plan.

[KillTheMessenger]

The only focus of the Pickens plan is to make Pickens richer. That's pretty much it. Using up our own natural gas resources faster has nothing to do with energy independence. Actually, it makes our future vulnerability worse.

[Prole-NY]

Here are Pickens' four priorities, in the order he gives them:

1 Expand electricity generation from wind and solar sources to lower the overall reliance on fossil fuels, including natural gas.

2 Improve the national electricity grid.

3 Offer incentives for energy conservation, eg home insulation

4 Use US-sourced natural gas in place of partly-imported diesel for powering large trucks while other alternatives are being developed.

[Sumocat]

And that's where the second misunderstanding comes in. This is not a plan for the future; it's a plan to get us to the plan for the future. No, we cannot continue to use NG as our main source of vehicle fuel for decades to come as we have with petroleum, but can it carry us until an all-electric system is in place? Or should we continue with oil in the meantime? These are the types of questions that need to be answered in any alternative to the Pickens Plan. Sniping at the fact Pickens is a capitalist does not address the issues.

[cam]

The article is full of biased commentary and perception. It completely dismisses two very different technologies (as being fossile-fuel based) and sets up its own straw dog arguments, which themselves fail on even the most superficial examination. It completely fails to recognise the geopolitical and economic advantages accruing to developing a viable alternative to petroleum.

Perhaps natural gas is not a viable alternative, but if it is the cost of developing a suitable fuelling infrastructure is hardly reason not to do it.

The author of this article has damaged his own credibility, not Pickens'.

[KillTheMessenger]

"Perhaps natural gas is not a viable alternative, but if it is the cost of developing a suitable fuelling infrastructure is hardly reason not to do it."

You need to explain the logic of this in detail. So the solution is not viable, but that's not a reason not to waste money on implementing it, anyway?

Phew.... yep, if that's the Pickens plan, Mr. Pickens is surely credible now.

[cam]

You misread my sentence, which was admittedly prone to misinterpretation: If natural gas is viable then the cost of developing associated infrastructure is not an insurmountable problem.

[TheHandyman]

What isn't being talked about with electric cars is that we are already at the limit of electricity production. Notice the rolling blackouts during the summer, the conservation programs to raise and lower thermostats? Remember the Ion-lithium computer batteries that caught fire and some exploded? What happens when a 3 kilowatt battery in a car does that or two electric cars collide and the resulting explosion takes out half a block of buildings? Will every electric car be considered a terrorist bomb? Imagine the number of Wind generators it will take to supply the electricity and the natural resources needed. Do you know that south american copper mines who depend on electricity have shut down because they use more electricity than tcan be supplied unless they cut off electricity to the cities and towns? Electric cars require batteries whose manufacturing process creates thousands of gallons of very toxic material. We are running out of iron, copper, aluminum and other metals. So what is the answer?

The Compressed air car. These cars are being produced in France and India, go 60 mph and travel 200 miles on a single charge of air. They can be refilled at any station with an air compressor for approx. $1.50. Newer models will have a solar panel charging a battery running an electric compressor. The cars presently cost $12,000 but would get down to half that with larger production runs. Think about all the benefits. Air is plentiful, renewable, and pollution free.!

[TakeNoNeoConPrisoners]

Air compressors run on electricity and as you have stated we are at the limit of our electricity production. I agree with that being in the electric generation industry. We need to replace coal fired plants (already producing over half the electricty in USA) with greener sources like wind, solar and NUCLEAR, the later is what I advocate. At the same time we are converting over, there will be a tremendous jump in demand as a result of the added need for everyone to go home and plug in to their wall outlet. How will all this extra electricity get to your wall outlet without facing the electric generation and distribution problems we have in this country? Our reserve electric capacity is at the lowest it has ever been thanks to utility deregulation by the Repubs. Our electric grid is outdated and needs to be rebuilt and improved. So demand would increase because of the air compressors you advocate. There is no something for nothing here when it comes to energy. It needs to be produced somewhere cleanly, plentiful, distributed and be cost effective, efficient and green. Nuclear fills that prescription better than any other alternatives under consideration. Yes there is a disposal problem but that is TECHNICALLY solvable problem. What is the obstacle is politics and people's misconceptions about nuclear.

[cam]

Nuclear is expensive and there are problems with the waste and decommisioning the stations. On the other hand nuclear enjoys some clear advantages - it would certainly improve transmission stability and efficiency.

While we are blue-skying what about deep geothermal. If we could tap into shallow magma pockets we could actively cool them and significantly reduce the risk of catastrophic erruptions. We could also drain magma and use it for construction. The engineering would be way beyond our current capabilities - it is not clear it would be possible - but it does seem like the obvious answer to so many of our problems. Yellowstone could probably power the US instead of destroying it.

[TheHandyman]

No, air compressors run on any kind of fuel source you need them to run on. European countries are beginning to build small electrical generating plants that provide power for a small number of homes and locate it within that area. It takes huge amounts of electricity to push power down a line so you get enough electricity to where you want it because of the resistance of the power lines. The Japanese have built a 5 gigwatt close system electric generator that needs no servicing and will produce enough power for a hundred homes. Since it is located in the midst of the homes the expense of wiring is miniscule when compared to bring power hundreds of miles.

Once again, a 12 volt on board compressor run by a 12 volt battery charged by a solar panel on the car puts no demand on the electrical grid. And the Nuclear Power Plants you want have never produced the amount of power they were supposed to and they operated at a loss. Not to mention their potential for a catastropic explosion. Nuclear power is nothing more than an extremely dangerous steam engine. Yes, anything is possible when it comes to disposal but you seem to fail to see that after 50 years it still hasn't been solved and in the meantime the clock is still ticking on this toxic and dangerous mess! Sorry, nuclear power is an idea that just didn't work out!

[cam]

It takes energy to compress the air. The higher the compression the less efficient the process. In other words, compressed air is probably great if you want a cheap, light vehicle with limited range, but you have to ask yourself where the primary energy source is and how much more pollution are you generating than if you simply employed the primary energy source directly?

Agreed, the electric car is not (yet) a viable answer.

[TheHandyman]

Excuse me, a light cheap car with limited range? What do you think the first gas driven cars were? There are all kinds of systems out there producing on demand electricity. No, what you need to look at is all the energy that is required to produce the electricity plus the pollution. Solar panels take huge amounts of energy to produce plus leave tons of toxic by-products. Even a small one cylinder gas driven on board compressor would still give a compressed air car multiple hundreds of miles to the gallon. You are trying to turn something simple into something complicated.

[greendestiny]

Handyman - that's false. The DOE released this study (http://www.pnl.gov/news/release.asp?id=204) that states there is enough off-peak electrical supply right now to power 70% of all cars-- that is, if they were plug in vehicles.

That's a lot of cars. Imagine how clean our air would be.

[slarabee]

The Pickens plan is an appropriate name becuase the primary beneficiary of the plan will be Pickens.
All this plan does is exchange one master for another.
I suppose we could trust the rich to have our best interests at heart but I think we see how that worked out. Truth is if our only goal is to quit sending money to the middle east the Pickens Plan would accomplish that in the short term. Eventually though our reserves will run low and we will have to seek NG supplies elsewhere (Russia? Dubai?) leading us right back to where we are now.
It's a flawed idea with limited return except for the wealthy.

[JimR]

But NG is only meant to be a transition until other, renewable, energy technologies are developed.

[ObjectiveRealist]

Where was this "Pickens" in the run-up to the Iraq Oil War? At that time, a government­-subsidize­d emergency switch to natural gas, combined with Obama's current plan for a long-term switch to renewable energy, would have been a two-fer. Now, it's obsolete.

[mjt218]

"7. Natural gas, while plentiful within the U.S., is, like oil, a fungible commodity - meaning that it can be transported and sold in other markets that require natural gas - including foreign markets. So, no matter that the fuel would be sourced locally in the United States - its price and availability, again, like oil, would be influenced by foreign demand."

There are currently no facilities capable of turning natural gas into a liquid for export to other countries here in the United States. There is no incentive to do so since the US is a big market for gas and since all the other big markets are already supplied by other gas reserves (Europe - Russia, Middle East and West Africa, Asia - Middle East and Australia).

I'm not too familiar with how the markets price natural gas, but I don't think it's nearly the same global commodity that crude oil is.

[booboo111]

I had heard that cow flatulence is the way to go.

[sheila]

BTW, we import huge amounts of LNG. Check out Sempra in SoCal. it is extremely energy-intensive to drill, liquefy and transport the fuel across the world from Indonesia and elsewhere, and we import it from those places because they have no safety or environmental standards to minimize harm.

[Prole-NY]

LNG imports represent about 10% of our natural gas imports - which themselves represent about 16% of our current natural gas use (ie imported LNG represents about 1.6% of our NG use). Most of our gas imports come by pipeline from Canada, and some comes from pipeline from Mexico.

In 2008 we used about 23,000 Bcuf of natural gas. About 348 Bcuf was imported LNG, down from 770 Bcuf in 2007.

[mjt218]

We do import LNG, but we don't have any infrastructure in place to export natural gas produced here, except maybe to Canada.

What basis do you have on your comments on safety and environmental standards? LNG is imported from other locations to the US because there is a market for those products here in the States.

[research]

It's good to Question Picken's plan and motives.

But

Pickens always intended the natural gas to be for truck fleets, not passenger cars, which he agrees should be electric plugs in hybrids.

We SHOULD use up all the natural gas we can to avoid another Methane Extinction.

Then we can switch to wind and solar hydrogen using the same natural gas infrastructure.

Natural gas is the cleanest fossil fuel we have, and also the cheapest electricity per Watt for backup power, even though it is a little more expensive to run than coal.

Coal IS the fuel we desperately need to STOP USING.

recent Models show that just replacing coal use would avoid the predicted climate disaster.

[Nikola Tesla]

Stop making sense!

[dayala]

that was my understanding of the Picken's Plan as well, CNG would be used for large transport/cargo trucks along with a combination of hybrids/electric for regular cars.

[urp]

Pickens NG plan is probably good for only the truck fleet. They have room for the larger tanks necessary. Filling stations would have to be built at only 3000 truck stops as opposed to more than 100,000 auto stations.

His wind ideas are just a little shakey. He wants you and me to pay the billions for the power lines to move the electricty around the country.

While wind and solar is good, many expect too much from it. It s not now going to supply a large part of our electricity, or will it anyplace on our horizon. How many solar panels do you suppose it would take to power a steel mill?

[ObjectiveRealist]

Rex Tillerson is entitled to his own opinions, not his own facts.

quote:
How many solar panels do you suppose it would take to power a steel mill?
/quote

A few square yards, and an acre or two of mirrors.
http://english.ntdtv.com/?c=154&a=2483

[cam]

I have not seen any analysis of what happens when there are enough wind turbines that they start slowing the wind. This idea that the wind is a limitless resource or that there are only positive environmental consequences is naive.

[Osprey3]

I believe the Picken's plan calls for substituting CNG for diesel in heavy vehicles (large trucks & buses), rather than the driving public at large. These engines are readily adaptable to use CNG. In fact, many municipal bus companies have already converted over. Diesel engines do indeed burn much cleaner with CNG and reducing the demand for diesel fuel would allow refiners to produce more gasoline.

[TheHandyman]

You obviously don't know that every barrel of crude oil produces the same amount of gas, kerosene, diesel, engine oil, aviation oil, etc. That is what the refining process does is tyo break each gallon down into it's many products and seperate out that quantity of each product. The amount of diesel produced has nothing to do with the amount of gas produced. It will always be the same.

[Prole-NY]

The proportions are not fixed: they can be adjusted to a degree at the refinery by cracking etc. Residuals can be converted into lighter products, predominantly gasoline. Recent growing diesel demand is favoring changes to the refineries to increase the conversion to diesel.

[cam]

Wrong. You adjust your feedstock and your process to optimise your products. Agreed, a pure fractional distallation will yield constant ratios of product but other processes can be employed to crack long hydrocarbons (such as diesel) and synthesize them into gas.

[cayuse]

I live next to one of the first Windmill farms built in the US.

Our local Utilities did not participate. The Utilities came from California or the Big Cities of Washington. The target of the energy is discounted energy to California, Florida and Texas. People of Washington lost free space in the beautiful mountains

The owners are from the UK. But their cost contribution is minimuml becuase of Tax Incentive from government grants. The farmer gets $1000 per month per windmill, Government Grant pay for building 1/2 the farms, Windmills are built in China, GOD makes the energy for FREE

GREEN cash is not cheap, free energy either. Clean for what price?

[KillTheMessenger]

Discounted energy from Washington to Florida? Hardly.

Your local utilities probably didn't participate because they had just built that brand new natural gas fired power plant that needed to be paid for. Shucks.

If you want to retaliate, you can always invest in a wind farm in the UK. That will show them!

Nobody said green energy was cheap. Quite the contrary. But including hidden costs it's not any worse than any other technology.

And, oh, God doesn't make energy. At least no more. All the energy in the universe has been there since the very first femtosecond. It just keeps changing from one form to another. Ultimately it will all turn into photons and the universe will cool down to a uniform dark canvas. Rest in peace. But it's about 10^100 years until then. So keep watching the action!

:-)

[cayuse]

Thanks for the response because for Green to be successful the people must see what they are really getting.

No, my local community is 3000-10000 acre farmers who get 100 bu/acre yields with dry land farming, so they get about 90% of all farm subsidy, 100,000 to 1,000,000 a year.

UK would not give a Tax Incentive so my cost would be 0, Grants pay for the building and allow to ship it to Florida

Free renewable wind is not like depleting oil. Its ownership is for ever. Monopoly ownership will rise the price over time.

I am talking about: Nature and of Nature's God. Call it GOD or what Science does not know and admitingly will never know, the UNKNOWN. So you can call it OLSEN the one GOD or UNKNOWN does not make any difference to me. The unknown of my meditation glows brilliant Light for the single eye of the unknown. But as you say, the ELECTRON of light in every atom is the light of the universe, that cannot be created or distroyed. As science says it is in the consciouness of the grossor single cell that make up man himself

[ObjectiveRealist]

quote:
The owners are from the UK. But their cost contribution is minimuml becuase of Tax Incentive from government grants.
/quote
Of course we should not be paying other countries and foreign companies for this work. And the location of windmills is also worthy of discussion. I do believe that, like my state of Oregon, east of the Cascades we both have a decent supply of, ahem, unspectacular scenery with substantial winds, quite suitable for vast square miles of windmills, don't you agree? The ones in Southern California along Interstate 10 actually add to the scenery in my opinion.

[Cacaoatl]

George W. Bush promised us a hydrogen based economy when he took office but in typical Bush fashion didn't do a thing to bring it about. I think the Pickens plan is great....for T. Boone Pickens.

[bduboftexas]

The Pickens plan focuses on wind energy - a completely environment friendly, renewable source. The use of natural gas was to 'tie us over' until alternative fuels or the use of wind for energy is ready. And natural gas is much cleaner than gas or diesel. There's also plenty here in our area and they are busy drilling for it as we speak. I'm not really thrilled by the natural gas idea - I'm afraid to light pilot lights and always think I smell gas and therefore am going to blow up. But hey, wind isn't scary to me at all! Further, farmers who are being paid to NOT grow crops on their lands, or those that are getting subsidies to grow certain crops or have cattle - those people could make much more money if they simply would allow wind turbines on their property. I truly am hopeful for wind and solar energy in the near future. Let's see what kind of power the middle east has when we no longer need oil.