The $62M Pickens Project: Natural Gas Legislation by Memorial Day?

Mar. 7.10 | About: The United (UNG)

By Eric Wesoff

T. Boone Pickens, the Chairman of BP Capital Management, spoke at the Wall Street Journal ECO:nomics event on Thursday afternoon. The 81-year-old oilman and geologist is on a mission to get the U.S. off of OPEC oil and on to natural gas -- and he doesn't have a lot of time. He insists he doesn't have time for Research and Development. In his words, he doesn't "have ten years for R or ten years for D." Despite that claim, at his current level of feisty -- I have little doubt he'll live to 101.

Pickens said that his mission was catalyzed by listening to presidential candidates over the last few decades, (both Republican and Democrat) say, "Elect me and we'll be energy independent" but never making good on their promises. And they got away with those lies because the press allowed them to, according to T.

Pickens claims that the United States has natural gas reserves that are equivalent to 700 billion barrels of oil and it is his personal crusade to move that ocean of natural gas into the American transportation sector. He claims to have already spent $62 million on this quest, known as the Pickens Plan.

He's going to do that by getting the Natural Gas Act (HR 1835) through the House and Senate Bill 1408 through that august body. Transitioning the nation's 18-wheelers to run on natural gas is his first target.

Boone wants the U.S. to "just get eight million trucks done." We have 250 million vehicles in the U.S., "so eight million is doable." Once those eight million are done, according to Pickens, the results will be "so outstanding" that we can move to light-duty trucks. He said that AT&T's fleet is already moving entirely to natural gas.

Pickens said that we're going to have the Natural Gas Act legislation by Memorial Day. He has a $100 bet with Jim Kramer on that.

A Ford Motor Company representative in the audience was asked if Ford can make the change to natural gas. Her response, unenthusiastic according to Pickens, was that it costs $600,000 to put in a fueling station for CNG and that it will take a lot to put that investment in. Pickens dismissed her and gave us this choice: "Make the transition or use foreign oil."

Boone wanted to hear the following from the President at the recent State of the Union: "All federal vehicles will be run on domestic fuel." That would have sent a message to the world, according to Mr. Pickens. He says the U.S. needs to cut down the amount of oil imported from OPEC. The American people are concerned "because five million barrels of oil per day are being imported from the enemy."

Closing words from Mr. Pickens: "We are five times bigger than the Saudis" in terms of natural gas reserves / fuel equivalent. Natural gas is "cleaner" and "it's under our feet." He also said that the U.S. would go down in history as the dumbest country ever to have graced the globe if we do not make this transition.

He said that he "loves electric vehicles," that he "loves anything American" and that we need to "get the goddamn problem solved."

Oh, and by the way, he said he will be running for President in 2012. He may not have been serious. And he predicted an oil price of $85 to $95 per barrel by the end of the year because of spikes in global demand.

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The Congressional Research Service created this summary of HR 1835:

New Alternative Transportation to Give Americans Solutions Act of 2009 - Amends the Internal Revenue Code to: (1) allow an excise tax credit through 2027 for alternative fuels and fuel mixtures involving compressed or liquefied natural gas; (2) allow an income tax credit through 2027 for alternative fuel motor vehicles powered by compressed or liquefied natural gas; (3) modify the tax credit percentage for alternative fuel vehicles fueled by natural gas or liquefied natural gas; (4) allow a new tax credit for the production of vehicles fueled by natural gas or liquefied natural gas; and (5) extend through 2027 the tax credit for alternative fuel vehicle refueling property expenditures for refueling property relating to compressed or liquefied natural gas and allow an increased credit for such property. Requires 50% of all new vehicles purchased or placed in service by the U.S. government by December 31, 2014, to be capable of operating on compressed or liquefied natural gas. Authorizes the Secretary of Energy to make grants to manufacturers of light and heavy duty natural gas vehicles for the development of engines that reduce emissions, improve performance and efficiency, and lower cost.