I’ve been taking a close look at The Pickens Plan. T. Boone Pickens, the 80-year-old oilman, is pushing this idea. “I’ve been an oilman all my life,” Pickens says. “But this is one emergency we can’t drill our way out of.”
The Pickens Plan is to use wind power to generate electricity. The plan calls for wind farms across the Great Plains, generating around 22% of our electricity. That number is important: it’s the amount of electricity we currently generate using natural gas. Pickens wants to use the natural gas to fuel our cars. It’s cleaner than gasoline or diesel, it doesn’t impact our food supply like ethanol, and we have more of it. Using natural gas this way (instead of in electricity generation) would reduce our dependence on foreign oil by around 38%. (We currently import almost 70% of the oil we need.)
The plan costs around $1 trillion for the wind farms. It could save us nearly $300 billion (at today’s prices?) that we would have had to spend on foreign oil. It would take around ten years to implement.
This is the kind of idea we need to be talking about. When I see candidates talking about opening up areas for offshore drilling as “real energy reform” I feel sick. This is the kind of idea that needs to be discussed.
And there’s a lot to discuss. Because this plan is not perfect. I have some questions. Starting with the fact that our electricity generating demand is constantly growing, and it appears that we will soon face a peak in natural gas production in this country. In 2002, Matthew Simmons discussed the need for our natural gas supply for electricity generation to grow by at least 35% by 2010. So we’re not talking about replacing 22% of our electricity generation in ten years; it’s more like 30%. Canada supplies the US with natural gas, but has been using more of it as part of the extraction process to get oil from the tar sands.
Natural gas prices have jumped recently as supply struggles to keep up with demand.
Update (May 9, 2009): From Shortage to Glut and Boom to Bust — America may have a lot more natural gas resources than we thought.
From The Oil Drum:
Natural gas use, as you may have noted, has been increasingly, over the last few years, the fuel of choice for new power stations. And the increase in demand has led to a current increase in US production, although at a significantly higher price. However, a significant fraction of this new production is coming from shale deposits, where the high level of demand and the decline pattern of the wells (50% drop in the first year and economic exhaustion within 4 years) means that this is really a transient resource, with drilling having to increase more and more just to keep up with existing demand, and with the likelihood of that not being possible within the next few years. This becomes germane relative to the Pickens Plan, since by the time it becomes fully effective, it is likely that natural gas will be in significantly shorter supply than it is at present.
Then there’s the questions around how many natural gas vehicles can be produced (and bought). This is a start, but the Pickens Plan does not look like the answer.
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