Our energy future
By T Boone Pickens
November 16, 2008
Three critical issues face the Obama administration in 2009: first, the collapsing U.S. economy; second, our national security; and, finally, our escalating and costly dependence on foreign oil.
Addressing our perilous dependence on foreign oil is a sure way to solve the economic and security threats. We cannot be complacent and buy into the notion that collapsing oil and gasoline prices have solved the problem. They have added to it. Though prices have dropped, we continue to import nearly 70 percent of the oil we use. The longer we fail to develop a national will and a national energy plan, the worse our national economic and security threats will become.
The recent decline in oil prices is temporary. They will rise as the world’s economies improve and demand cranks up again. Add to that this statement from a study by the International Energy Agency: “Output from the world’s oil fields is declining faster than previously thought … annual output will decline by 8.6 percent.”
Higher demand. Lower supply. Spiking prices.
As an economic issue, the Obama administration will try to jump-start the U.S. economy before the 2010 midterm elections.
It will have to look long and hard at creating new jobs and reducing the amount of money sent overseas for oil—which, at $70 per barrel, will total more than $350 billion this year, even though oil prices have dropped. That number will likely be more than $700 billion over the next two years.
Our energy problem can be solved by focusing on two abundant domestic resources: wind and natural gas. They are the cornerstones of the Pickens Plan.
We produce about 22 percent of our electricity using natural gas. The Department of Energy estimates we can replace almost all of that natural gas with clean, renewable wind power. A commitment to build out wind power capacity from Texas to the Canadian border—the “Wind Corridor”—would add 138,000 jobs in the first year alone and upward of 3.5 million jobs over a 10-year period.
New wind power would free up natural gas to replace diesel fuel and gasoline in transportation, establishing a 20-to-30-year bridge while we develop the next generation of batteries and fuel cells. Incoming White House Chief of Staff Rahm Emanuel is a strong advocate for using natural gas as a transportation fuel.
Seventy percent of the oil used in the United States is for transportation, and a large percentage of that is used in moving goods via 18-wheelers on interstate highways. If major trucking companies were to replace vehicles using (foreign) diesel with trucks using (domestic) liquefied natural gas, it would provide an immediate and dramatic impact on America’s oil imports.
In fact, any fleet—municipal vehicles, buses, express delivery, garbage trucks, regional hub operations—that goes to the same barn every night could easily be upgraded to natural gas with a relatively minuscule investment in fueling infrastructure.
Natural gas is cleaner, cheaper, abundant, available now, and completely domestic.
The Obama administration can show leadership by ordering that all new U.S. government vehicles must use natural gas instead of gasoline or diesel. Such a move would send a clear signal to major manufacturers of cars and trucks that Washington is serious about natural gas and reducing the threat of foreign oil.
A new renewable energy infrastructure including wind energy will create millions of new jobs while freeing up natural gas for use in transportation.
Natural gas is the only fuel that can reduce our oil dependence by 30 to 50 percent within 10 years and keep hundreds of billions of dollars here in the United States, saving more than enough money to pay for our investment in wind power.
Taken separately, these steps are each good ideas. But together they are an energy plan, and that’s what we need right now.
It won’t be easy. Washington lobbyists will work hard to protect the interests of their clients—the big oil companies, the big chemical companies and the big car companies—by preserving the status quo.
For more than four decades low gas prices, failed leadership and a lack of accountability haven’t solved the problem. But with the abundance of domestic natural gas, this is the greatest opportunity we’ve ever had. It’s time to end our addiction to foreign oil.
T. Boone Pickens is founder and chairman of BP Capital.
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