T. Boone Pickens, Visionary or Profiteer?
Natural gas is the cleanest fossil fuel, produces the fewest emissions, and costs much less than petroleum fuels. T. Boone Pickens wants the US to use this fuel in cars, trucks, and buses. He also seeks to install more windmills across the US and begin the conversion of fossil fuel powered electricity generation to renewable fuels. Does T. Boone Pickens just want to make a buck or does he try to wake up this country?
T. Boone Pickens, a billionaire with large natural gas holdings, is spending more than $50 million to convince US politicians and the public that natural gas should become a transportation fuel and should be priced much higher. Gasoline costs ten times as much as natural gas when compared on energy content. To make his case, he also wants to invest in wind power for electricity generation. This second move is intended to avoid a major increase of electricity costs as a result of increasing natural gas prices and to make his proposal politically more attractive.
T. Boone Pickens is a businessman. He wants to increase the value of his holdings. He may also provide a service to his country. The US is hopelessly naïve in understanding energy, its countless blessings, and its very serious, perilous, and pitiless shortcomings. The public and its political representatives must begin to understand world energy markets and the hidden, external costs of energy. Mr. Pickens's advertising campaign will put some light on world energy markets and will not be appreciated by oil companies. His efforts are bound to contribute to a better understanding of energy and its many facts, faces, and features.
Consumers are afraid of further petroleum price increases. An economic recession and rising fuel prices at the pump have left them with less and less disposable income. They are looking for solutions, any solution. Mr. Pickens is offering one small but plausible remedy. His advertising campaign will make it difficult for politicians to not accommodate him in some ways.
Gasoline and diesel prices have been skyrocketing. Prices of natural gas are held down by the slow growth of energy demand in electric power generation, home heating, and in a shrinking manufacturing industry. The demand for natural must go up before prices can follow. Increased drilling for oil in the US, promoted by politicians to reduce petroleum prices, will discover mostly natural gas and only some crude oil. Drilling for oil in the US will never affect gasoline prices at the pump. Future increases in the price of natural gas will, however, be slowed by additional drilling and new supplies.
This is the situation that T. Boone Pickens wants to change. If he is successful, he will indeed increase national demand for natural gas. He knows that increased drilling for oil in the US will have two effects; it will increase the profits of those oil companies that find additional oil reserves and it will increase natural gas supplies from the numerous wells that will not produce oil but gas. Expecting that that US oil companies will ever sell domestic crude oil below OPEC prices is delusionary.
T. Boone Pickens will contribute marginally to US energy supplies if he succeeds in convincing Congress to extend special tax incentives and subsidies for installing windmills. Producing 20% of all electric power with windmills in the US is the 100% correct prescription for reducing greenhouse gas emissions when accompanied by the retirement of outdated, coal fired electric power plants. However, there are no market forces to accomplish this radical, much needed change. Only the taxpayer through its representatives can accomplish this conversion.
The major economical problem, which the US must resolve immediately, is its complete and politically irresponsible dependence on foreign petroleum supplies. Economies cannot function without plentiful, affordable and secure engine fuels. The nation's defense is in an especially precarious predicament. Our nation's defense will collapse after consuming its limited strategic oil reserves. The US must develop domestic, alternate liquid fuel sources posthaste and eliminate this outrageous security risk.
This country better wakes up soon and addresses the monumental issue of increasingly costly, liquid fuel supplies. We cannot wait until our oil industry has pumped the last gallon of petroleum from depleted domestic oil wells. We cannot wait until all oil executives have retired to locations in cooler highlands. We must begin to find alternatives now and we must force the oil industry to share its vast knowledge of oil processing and of synthetic oil production with producers of renewable liquids in exchange for precious drilling rights.
Natural gas powered cars will not relieve our country's dependence on fossil fuel imports perceptibly. Installing a distribution system for compressed natural gas will be very expensive and will be useful for only a small fraction of automobiles, trucks, and local busses. It might however, be practical to install compressor stations in large, metropolitan areas. The US desperately needs to act and put the world on notice that it will fight global warming and will act decisively to regain energy independence. The US can reclaim leadership by immediately instituting a Manhattan style project with the single mission to produce renewable liquid transportation fuels domestically.
In his thinking, T. Boone Pickens is miles ahead of the rest of the country. He sees that the installation of windmill farms will increase and not decrease natural gas consumption for electric, peak power production. He knows that the transportation sector is desperately looking for alternative energy sources. He knows that natural gas as a transportation fuel is inferior to gasoline and to diesel. However, he needs the demand from the transportation sector to elevate natural gas prices across the board and to make his efforts of promoting windmill farms worthwhile.
There are not many patriots in the energy industry. T. Boone Pickens may just be one of the very few.
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ABOUT THE AUTHOR
Dr. Hemsath recently published the book: CLIMATE CHANGE - GOLD RUSH OR DISASTER? For 50 years he has worked as scientist, process engineer, Corporate Vice President of R&D, Company President, CEO, and Inventor. He holds more than 60 US Patents. He is working on a new book: "THE SOLUTION FOR ENDING GLOBAL WARMING AND CLIMATE CHANGE". Go to http://www.thermalexpert.com