'Pickens Plan' Comes in the Nick of Time

|
 |  Includes: OIH, USO, XLE
by: Paul Killinger

If you've been watching TV lately, you've probably heard about the "Pickens Plan" for American energy independence. This is a lofty goal from an improbable source to be sure. But as unlikely as it may sound, these ideas just may work.

To begin, who the heck is T. Boone Pickens anyway, and why is he so concerned about America's energy crisis? Well, Mr. Pickens is a Texas oil billionaire who owns, among other entities, BP Capital. He is 80 years old, although he looks to be in his mid-60's, and his mind is still as sharp as a steel trap. He says he used to be a Republican, but he gave that up so he could convince Congressmen and Senators from both political parties his plan is "non-partisan" and deserves their consideration.

So what exactly is this fellow proposing? Well, if you've seen his TV commercials, which he says he is paying for with $58 million of his own money, he believes our nation's energy crisis is alot more serious than our having to pay $4 a gallon right now for gas at the pump. He says we're sending $700 billion a year overseas to pay for imported oil, which over the next ten years, will result in "the largest transfer of wealth in the history of mankind."

He believes, therefore, that until we can develop the next generation of non-polluting fuels to power our country, we need to take immediate, drastic action so we don't go broke in the meantime. By this, Pickens is referring to the construction of vast wind farms, and utilizing our nation's surplus of natural gas [NG]. He has maps that show the U.S. is the "Saudi Arabia of wind," as he likes to put it, and that there is enough NG in America to power our transportation needs for many years ahead.

So how would this work and what would it mean to consumers? Pickens claims that if we got serious and started right now, we could build enough wind farms in the mid-section of the U.S. (from North Dakota down through Texas, where the best wind is) that we could generate 20% of our nation's electricity from this renewable resource in the next THREE YEARS. Utility companies would provide the transmission lines, and all he needs from Congress is access to rights of way across property, whose owners would be fairly compensated.

This, in turn, would free up a like amount of NG now being used by utilities to provide electric service to our homes and businesses, which could be used to fuel our cars and trucks instead. Would this mean we would have to convert our existing vehicles to operate on NG in lieu of gasoline or buy new ones? No, but we might want to. NG has been used as a transportation fuel for decades, and already powers many large vehicle fleets. And drivers love NG in Utah and Oklahoma, where they are paying less than $1 a gallon (wow!) to fill up today.

You may ask what Mr. Pickens is going to get out of all this. Well, he owns trash trucks that operate on NG now in San Diego, CA, where municipal vehicles are presently using NG to arrest their air pollution problem. And he has put together a consortium of private investors who have ordered $2 billion of wind turbines from GE on land they already have access to in Texas. But he says he's not in it for the money, and with $4 billion in the bank it's easy to believe him.

So, what are the chances the Pickens Plan will be successful? As he was testifying before Congress this week, it was obvious he had done extensive research on his proposal, and he knew a great deal more about the real promises and pitfalls of the U.S. energy crisis we are facing than the Senators and so-called energy experts he was addressing. And the money he's spending to inform Americans about the mess we're in because we now have to import 70% of the oil we use can't hurt either.

This may sound old fashioned, but I believe T. Boone is spending his own time and fortune to demonstrate that the Pickens Plan can actually work, and he's doing it, as he says, because he believes in America. Moreover, I'd say we ought to take him up on the interest this 80-year old self-made American entrepreneur has shown in our country's future while there's still time left to do it.

If you like, you may go to PickensPlan.com for a complete explanation of the Pickens Plan and additional information.