Enbridge and TransCanada Would Benefit from Pickens Plan

The quest for energy independence in the United States could bring a windfall of fortune for Canadian natural gas companies, according to analysts.

First Energy Capital has parsed the so-called Pickens Plan, named after legendary Oklahoma oil investor-turned-protectionist T. Boone Pickens, who has been actively lobbying Washington to switch off Gulf oil for years. Mr. Pickens also endorses the doctrine of peak oil, and that the U.S. needs to quickly move on alternative energy as fossil fuel reserves shrink.

His solution, crafted in July as oil topped $147 a barrel: invest $1-trillion in growing the U.S. wind-powered electricity generation by 1900%, taking the number of turbines currently installed on U.S. soil — 16,800 — way, way (way) up to 309,000. The Plan would substitute wind power for natural gas in heating homes, freeing up the fuel for use in transportation.

So, is Mr. Pickens blowing hot air? Analysts at Calgary-based First Energy seem to give the plan merit.

They note in their review released this week that industry group Global Wind Energy Council has already said North American-wide capacity could reach 366 Giga-Watts by 2030 under its "moderate" scenario.

"This is an independent confirmation that the Plan's 309 GW of installed capacity in the U.S. is at least possible," the analysts said.

Heavy use of natural gas for transportation would benefit the companies that move it around to high-demand areas — which would increase. TransCanada Corp. (TRP) is one of those companies. Its existing network of pipelines already move the fuel from its U.S. gas fields to market, and it has planned a high-voltage direct current power line called Northern Lights that would connect Alberta to the U.S. power grid.

Enbridge Inc. (ENB), which owns part of the Alliance Pipeline, is another. The Alliance line imports natural gas from Canada, while Enbridge is proposing expanding with a line that joins the Rockies to Chicago.

Of course, Mr. Pickens himself stands to gain. His Mesa Power LLP, still in construction in Texas, will be the single largest wind farm in the U.S.

Comments

[john s. gordon:]

i'm all in favor of high voltage superconducting DC xmission.
> jack

2008 Dec 24 08:37 AM

[Teak:]

Boone Pickens became a billionaire through investments in oil for energy. I wouldn't bet against him if he is investing in wind for energy. Not an Oil Man, but an Energy Man. The answer, my friend, is blowing in the wind.....

2008 Dec 25 03:29 AM

[Ferdinand E...:]

Although this is Christmas and a lot of people are due in a few hours, I'm glad that I glanced at my computer.

As I understand the situation, Pickens is closing shop in Texas where his wind project is concerned. It was and is strictly off-the-wall, although apparently the 2 billion dollars that they say he has lost recently might have caused him to be less enthusiastic where energy matters are concerned. As for his plans for gas, I suggest that his supporters learn a little algebra and then try to figure out what would happen to the price of natural gas if Pickens' dreams for that resource came true.

Someone mailed me yesterday about the claim in my energy economics textbook that natural gas is less plentiful than people believe. Please let me repeat say that I meant exactly that..

2008 Dec 25 08:07 AM

[Hmm?!:]

Enbridge does not own Alliance Pipelines. I believe Fort Chicago Energy Trust owns Alliance Pipelines. Please check your facts.

2008 Dec 27 11:16 PM