Stimulus and Energy
President Obama's team is settling into their new offices and the new Congress is getting used to those new people talking about new approaches to America's problems. A major issue they should all pay close attention to is the national security threat posed by Russia.
In the deepest part of this winter, Russia held most of Europe hostage to a natural gas fight it was having with Ukraine. This wasn't the first time. In fact, this was the eighth time since the mid-90s that Russia has used natural gas supplies as a weapon to impose its will on its customers.
What is the U.S. national interest in this? Our interest is about $500 billion per year.
We import more than two-thirds of the oil we use every day. Look at where we are now. The recession is getting deeper and oil prices have dropped $100 per barrel since last summer. Even with all that, in December, 2008 we imported two-thirds of the oil we used; a total of 379.6 million barrels of oil which cost us of $19.3 billion. One month.
That's at currently (and, I believe, temporarily) reduced prices. Even if oil stayed at these prices for a full twelve months, we would spend more than a quarter of a trillion dollars per year in 2009 and every year into the future.
If oil prices reach the price point that OPEC seeks -- $75 per barrel -- that annual bill will go up by an additional $100 billion over the next 12 months.
We won't have to worry about what's in the stimulus package. We won't be able to afford any of it in five years.
About half of the oil we import comes from countries which we know don't have our best interests at heart, or are from unstable areas of the world, or both. According to the Energy Information Agency, 51 percent of our oil is imported from the Middle East, Africa and Venezuela.
Russia, which used to send a few observers to meetings of the Organization of Petroleum Exporting Countries (OPEC) recently sent 22 high-ranking officials to an OPEC meeting. Russia is going to be a full member of OPEC. And soon.
So, we will have Russia, which has more than a decade of practice using fuel as a weapon in Europe, teaching the other OPEC members how to run that same tactic against the United States.
The last time there was a major disruption in oil imports was in the early 1970s during the "oil embargo." That was when OPEC wanted to change America's foreign policy in the Middle East.
I remember the disorder that embargo caused. I was in the oil business at the time. But, here's the important point to keep in mind: In 1970 we imported less than a quarter of our oil; about 24 percent.
Today, we import nearly 70 percent of our oil. Even a minor disruption in oil deliveries -- in the Russian style -- would be a huge jolt to our economy which is already on the rocks and would send oil prices through the roof.
We don't have to be at the mercy of OPEC, with or without Russia as a member. We have the capacity to reduce our dependence on foreign oil by 50 percent overall which would allow us to reduce to zero the amount of oil we import from the Middle East, Africa and Venezuela.
In his inaugural address, President Obama called on us to utilize our wind and solar resources to generate electricity. No matter what your position on "clean coal," it is obvious that a generation system which uses no fuel whatever is going to be cleaner than even the cleanest fossil-based generation method.
The U.S. wind corridor is a huge swath of the Great Plains which runs, two states wide, from northern Texas to the Canadian border.
A Department of Energy study in 2007 said that building out our wind capacity in that corridor could provide up to 20 percent of our power needs and, in addition to generating electricity would also generate 138,000 new jobs in the first year and up to 3.4 million jobs over a 10-year span.
Those numbers don't take into account the additional energy and jobs which would be generated by building out our solar capacity in the corridor running east and west from western Texas to California.
But all that, plus building a 21st century transmission grid, will take time and every day which goes by without reducing our oil imports is another day which sends nearly $650 million dollars out of the country.
The fastest method to cut down on oil imports is to incentivize trucking companies -- large and small -- to replace their heavy trucks burning diesel fuel with trucks which will run on natural gas.
A battery will not move an 18-wheeler. That technology will come, but it doesn't exist now. The only fuel which will replace imported diesel is domestic natural gas. Natural gas is in abundant supply in the United States.
We should subsidize truckers to replace 350,000 trucks with natural gas engines in the normal course of fleet renewal. There are about 6.5 million heavy trucks on the road. That's about five percent of the U.S. fleet.
That one program would have the effect of reducing our petroleum imports by over five percent. As manufacturers ramp up to meet an increasing demand, the cost-per-truck will come down and a subsidy will no longer be necessary.
With lay-offs announced by companies in the business of building heavy-duty engines, like Caterpillar, building hundreds of thousands of engines using natural gas would save jobs which are on the chopping block or add jobs for those already laid-off.
Over the course of the next 10 years, getting 18-wheelers off diesel and on to natural gas would reduce our imports by 50 percent. That would be the 50 percent we now import from the Middle East, Africa and Venezuela.
OPEC would no longer be a threat and we would replace a intuitively dirty, expensive, imported fuel -- diesel -- with natural gas; a fuel which reduces carbon emissions by 30 percent and produces 93 percent fewer toxic emissions; which is cheaper (in fact, the United States has the cheapest natural gas in the world); and which is domestic (about 98 percent of our natural gas comes from North America).
Natural gas is not a permanent solution as a transportation fuel. It is the bridge to reduce our dependence on foreign oil by up to 50 percent while the technologies are developed to completely remove fossil fuels for transportation.
These are the basic tenets of the Pickens Plan. The Congress and the Obama administration can address the environment, the economy, and our national security by adopting these steps as part of its larger strategy.
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I joined the Pickens plan army today. So far Pickens is the only one who has a plan to wean the US off of OPEC oil in 10 years. Al Gore and John McCain never shut up about French nuclear power technology, but the US is decades behind them thanks to federal cronyism and mismanagement by US nuclear contractors. Hydrogen fuel cell patents right now are only slightly better than perpetual motion machines. I waited to see if Obama would attract another energy czar but there is no one. Either invest in Pickens shares or else into OPEC, ExxonMobil, and the big 3 hybrid subsidies. Its really your choice.
I think the Pickens Plan is great as far as it goes but it is not the total answer. It is one step on the way.
Unless I am missing something, we still do not have a coherent national energy policy even for the Pickens Plan to fit.
What is the "Vision?" Where do we want to be in 10 years or 50 years? If we don't know, how can we even guess how to get there.
Until we have a vision, we only have a pork barrel list of pet projects like ethanol, biodesiel, nuclear or wind, all of which have a place but none of which is the total answer.
natural gas for trucks, plug in hybrids for cars, wind and solar for the bulk of our electricity, biodeisal bio char ethanol for farm waste only, and no nuclear since it leads for more mushroom cloud via proliferation.
that works fine for 10-50 years, depending natural gas supplies.
Then we install more wind and solar and use excess electricity to generate hydrogen, we then use in the natural gas infrastructure.
http://www.huffingtonpost.com/users/preferences/index.php
I am not so much against a centralized solar solution as I am for a distributed architecture. Distributing the panels to each individual roof top will virtually eliminate any one big target for terrorists.
The “free” market brings forth innovations, efficiencies, wealth to a few and employment for many. It is not a solution to every problem. Government, not in Republican hands, brings forth order, security, the ability to mitigate inequalities and set a National course. It is not a solution to every problem. Natural gas is a good intermediate solution to many of our pressing problems both economic and environmental. I noted that when the price of gas fell below a certain level it made wind power “uneconomical”. This is solely based on “market” forces.
The free market exists to serve those within its sphere. People and the Earth do not exist to serve the free market. When a viable solution runs afoul the market the market must be changed to allow the solution to be implemented. One simple solution is to place a tax on gas used to generate electricity as a variable rate to yield an overall cost that makes wind power “competitive”. If market forces pushed gas up the tax would go down and vice versa. In that way investors would be assured of a return on their investments in wind power. The gas that is freed up could be used as transportation fuel.
It would also be of great benefit economically to place a higher tax on automobile gasoline and diesel. This tax would not be levied on natural gas or biofuels. An 85% ethanol blend would escape 85% of the tax. Biodiesel would be untaxed.
To make Picken's plan work,
We must rapidly install rooftop solar in out hottest locations.
This will reduce the demand for Natural gas,
Since Natural Gas is the most used "Peaking" electrical generators used for air conditioning.
Otherwise, the price of Natural Gas will Spike, to Picken's favor.
While I am no fan of Pickens, it seems to me that the mudslinging here in the comments is unhelpful. (I am not, incidentally, debating the factuality of most of it.) You and I might not care for the guy, but there are plenty of people in the climate-change-denying, drill baby drill camp who do, and we ought to be glad that he's flogging this message to them since they will resolutely ignore people like Al Gore.
Moreover, a true statement is a true statement whether it comes from the mouth of Mother Teresa or Adolf Hitler. Building out our wind and solar capacity would create jobs and it would produce huge amounts of clean, sustainable energy. Let's remember that and not get bogged down in matters of personality, okay?
I don't think there is much "mudslinging" going on.
But the fact remains if you have a heroin habit, your dealer is probably not the best guy to take advice from on how to quit.
Still you are correct about wind, he is wrong about NG.
We would also have the capacity to make you, Mr. Pickens, more fabulously wealthy by following your plan. Oh all that NG you hold. You, yourself stated that you tried to "sell" this plan in the early 90's and no one listened. Sell being the operative word. Pfft.
There is nothing wrong with Pickens pursuing his self interest so long as his interests coincide with the interests of the nation at large.
But his interests do not represent our interests. You will find that out the hard way if the Pickens Plan is implemented and you heat your home with Natural Gas.
We will never get free of oil until we quite subsidising it we have the natural gas and ability to use it as fuel but do you think the major oil companies are going to let that happen they make their money purchasing and refining the oil into gasoline. They don't care what they have to give for a barrel of oil they just pay it add a nice profit then refine it into gasoline and sell it to the distributors. These oil companies get more tax breaks than a Republican on steroids
The Oil companies also own the NG. Just remember that.
Mr. Pickens has some decent points. About energy.
But I must confess to throwing up a bit in my mouth when I hear him vilify Russia for using natural gas as a "weapon". Coming from a rapacious capitalist, for whom "charge what the market will bear" is an unholy creed, this is rank hypocrisy. Not to mention that the America he professes to care about has used real weapons (care for a daisy-cutter? How about cluster bombs?) to enforce its economic will on the world.
So, Boone, stick to kilowatts and megajoules. Leave the morality of it aside, because you, and we, are irrevocably tainted.
Note to T. Boone - stop listening to "W's" ideas on how to clean up your image. It won't work for him, it won't work for you.
You made all that money destroying companies (and the jobs that went with them) in the '80s. And now you wanna clean-up that ole' "T. Boone" image?
Keep it - we ain't buyin' today (or ever)! Keep your TV commercials, Keep your magazine ads - keep it all. You're buying it with money taken from workers and families that needed it a LOT more than you ever did.
Use your money instead to buy a nice retirement rancho next to "W" there in Texa$. You should at least enjoy it - the people you took it from can't - and besides, you guys go good together!
Or should I say " deserve each other "?
Hey, if you ever have some brush that needs cuttin' George can bring "Buzz" over and hep ya out!
--
Pickens is for Pickens, pure and simple.
30% of our petrol fuels consumption is diesel not 50% and only a portionof that is used by trucking transportation (I don't know the number although I am sure it is the lions share) .
70% is gasoline.
The numbers are skewed to push a completely faulty plan.
If we were to begin to implement a diesel to NG conversion for the trucking industry it will cause a sharp increase in the cost of NG which would cause great pain to middle income families (like mine) that use NG for home heating.
What's more is a plan that converts us from one limited non-renewable resource to another is simply trading one master for another.
The Pickens plan will have great benefit for Pickens though as he holds huge interests in the NG industry and the companies that would implement the new infrastructure.
T Boone! You were great on "Dallas"!!!
Oh, and pay no attention to these whiny libs. If it wasn't for people like you, they wouldn't have their t.v.'s to watch Will and Grace on. I love you! I just want to skinny dip in an oil reservoir with you, and listen to Davis Allen Coe!
Brilliant comment. You are a real deep thinker aren't you?
Wind farms are not good policy. They can only produce energy when the wind blows. If it blows too hard..they have to shut down due to the possibility of fire from friction in the blades. The energy can't be stored . The wind farms can't be close to people so a lot of electricty is lost in transmission. The lines are already at capacity. That is the reason for 3000 miles of new transmission lines. Money for infrastructure in needed for roads and bridges. Not for spits and spurts of heavily subsidized power.
How wrong you are.
Most of the draw backs you just mentioned are the same for all methods of electrical power generation.
Storage issues are the same and distant problems are the same.
Wind is an excellent renewable energy source and the more that we sink into the technologies in terms of infrastructure and research and development the more we will learn and the more efficient we will find this valuable resource.
The "can't do" attitude of people like you is not the way to fix our energy problems.
That said the NG side of the Pickens Plan is pure business rhetoric designed to make lots of maony for Pickens.
Wind farms are good policy. True, they only produce energy when the wind blows, etc. The energy doesn't need to be stored if the total output is less than the total consumption; in any case, the energy can be stored; it is already (eg pumped storage reservoirs such as Dominion's in Bath County, VA). The wind farms can be close to people, particularly if those people already live in the wind belt. It can also be close to industry; server farms, for instance, could easily be relocated near wind farms. The new transmission lines are a necessity, even without the advent of wind farms.
Final point: current oil supplies are subsidized more heavily than any other energy source (perhaps excepting nuclear), through massive defense spending. You didn't really think that our misadventure in Iraq was about spreading Freedom, did you?
Wind farms can store energy during low demand periods. One system uses compressors to store compressed air for running generators during higher demand.
Obama will lose a few trusted advisors here and there. I believe in him and trust him as well. Larry Summers needs to go. do not give up the integrity of your blog to protect Enron types....even if they are dems.
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