Wednesday, October 28, 2009

Pickens comes to Notre Dame

A Town Hall event with T. Boone Pickens

This week, I had the opportunity to visit a town hall meeting hosted by T. Boone Pickens in the Debartolo Performing Arts Center.

The event was kicked off by an ND alum, Salem Abraham (class of '88), Pickens' friend and neighbor and the head of Abraham Trading Company, a commodity trading company based in Canadian, Texas.

Pickens came to Notre Dame as part of a college speaking tour across the country to promote his ambitious energy proposal, the Pickens Plan. The Plan kicked off in July of 2008 with the goal of reducing American dependence on foreign oil with investments in natural gas and wind farms. Pickens has invested $62 million of his own money into the Pickens Plan, which boasts over 1 million supporters.

Pickens' lecture largely focused on expanding the use of domestically produced natural gas as a substitute for oil. He believes that global oil production will never exceed the current rate of 85 million barrels per day, meaning that we have currently reached peak oil, the maximum rate of global petroleum production. He also also cited the increasing percentage of imported oil in the total consumption of oil in the United States as a concern.

Foreign Oil

He recalled that President Nixon once promised that the United States would not import oil by the end of the 1970s. In that time, foreign oil imports actually increased from 24% to 28%. Since then, Pickens said that he has seen every subsequent presidential candidate promise a reduction in oil imports. Meanwhile the actual percentage of the oil Americans consume that comes from outside the country has continued to increase. Currently, around 67% of our oil comes from overseas, and Pickens expects that number to go up to 75% in the next ten years if there isn't a significant change in our energy policy. He added, "I don't think the folks in Washington lie to us about energy. They just don't understand it."


He commented briefly about his meetings with both John McCain and Barack Obama during the 2008 elections to discuss their energy proposals. John McCain proposed increasing nuclear power, while Barack Obama wanted to focus more on renewable fuels. Both of them wanted to invest in battery technology for transportation. As Pickens' story goes, he asked both of them "You know a battery won't move an 18-wheeler, right?" to which both candidates responded "It won't?".

Speaking further about President Obama, he recalled that he criticized Obama's promise of 1 million plug-in hybrids by 2015 for being "too small". While Pickens himself drives a fuel-efficient car that runs on natural gas, he's more interested in focusing on commercial vehicles like trucks which consume much more oil and produce more pollution than cars.

Though he claims his movement "doesn't have anything to do with politics, it has to do with being Americans", Pickens hasn't been at all cautious about involving himself in politics. Pickens is a supporter of HR 1835, the "New Alternative Transportation to Give Americans Solutions Act of 2009" which he dubbed, "the climate bill".

Natural Gas

Pickens went into more detail about his plan, which can be broken into two parts. First, Pickens predicts that the United States' electricity consumption will increse 20% in the next ten years. Most electricity in the US comes from coal fired plants, but Pickens argues that natural gas and, eventually, renewable fuels can be used to meet that demand in an effort to reduce costs and environmental damage.

Second, Pickens supports the expanded use of natural gas-powered trucks instead of diesel trucks. The majority of his speech consisted of outlining his plan to incentivize the replacement of what he referred to as diesel "heavy-duties" (big trucks), with more efficient trucks powered by natural gas engines. He cited the use of natural gas to fuel garbage trucks in Los Angeles as an example.

Aside from the benefits of diminished cost and pollution, Pickens notes that at over 2000 Tcfs (trillion cubic feet) the United States has the largest natural gas reserves in the world, so we could be replacing foreign fuel with a domestic one.

"6.5 million heavy-duty vehicles can be switched to natural gas. We can cut 2.5 million barrels (of oil imports) per day. That would cut half of the amount that we import from OPEC"


Q & A

After his 30 minute lecture, Pickens stayed for 30 minutes of the audience's questions. Here are some of his answers to what I thought were the best questions:

Q: What's your stance on Cap and Trade?
A: Cap and Trade will be in the Climate Bill, which I support. But, I think Cap and Trade is really just a tax, and as a businessman I don't like taxes. If Congress wants to raise revenues with an energy tax they should pass a gas tax.

Q: What about ethanol?
A: I support anything made in America. Corn ethanol won't move an 18-wheeler either, but it'll help

Q: What about nuclear power?
A: Nuclear won't move vehicles, but it makes up 20% of our power generation. It could be a clean alternative to coal, and it's American, so I'm for it.

Q: In 2008 you were promoting the idea of creating wind farms from Texas to North Carolina. What happened to that?
A: In 2008, gas was more expensive than it is today. When gas is cheap, wind is not affordable. When the cost of gas goes up, wind power will be a better option. Both wind and solar technology will improve and be more useful in the future. But for now the storage technology isn't good enough either.

Natural gas is a bridge. Right now we need to reduce our dependence on foreign oil. Hopefully in 50 years we can move completely to renewable fuels, and batteries and fuel cells. As long as those batteries are American. As I told Al Gore, I don't want to trade Saudi oil for Chinese batteries.

Q: What about volatile gas prices and the role that speculators have in driving up the cost of energy?
A: Speculators don't manipulate the cost of energy. The commodities market is different than the stock market. When someone sells shares of a commodity, someone else actually has to buy it. Energy markets are volatile, but part of the volatility comes from the fact that too much of our energy comes from foreign oil. We can't be buying oil from people that don't like us.

Q: Don't you agree that oil has been demonized too much in the national discussion of energy policy? We need oil for synthetics and other petroleum products like plastic.

A: 70% of the oil we use goes to transportation. Right now we have no energy plan. We have to get one. Oil from the enemy is likely to become very expensive. 5 years ago OPEC made $250 billion. In 2008, OPEC made $1.25 trillion.
This post is getting kind of long, so I'll put my own impressions of the town hall and the Pickens Plan in general in the comments section. If anybody else went to the town hall and wants to share their thoughts, feel free to add comments.


Bill said...

I was hoping to hear more about renewable sources of energy from Mr. Pickens, and was disappointed in his current focus solely on natural gas as a solution to America's energy needs.

Personally, I don't trust T. Boone Pickens' motives. Even though he claimed that he had the support of Al Gore I noticed that he seemed less interested in the environment and climate change than in foreign oil.

I'm skeptical of an oil man's plans to get America off of oil. And while he claims to not be interested in politics, I noticed that he met with John McCain first in 2008, and I also found out that helped fund the Swift Boat Veteran's for Truth when they smeared John Kerry in 2004.

Still, since he's committed to supporting climate change legislation, I'm happy to have a billionaire with over a million supporters on the right side.

Anonymous said...

This has nothing to do with his energy ideas, but wasn't this asshole one of the top contributers to "Swift Boat Veterans for Truth" that disgustingly smeared Senator Kerry's military service record in the '04 election? I thought I read this somewhere.

Anonymous said...

Why can't ethanol, electricity or nuclear power be used to power large vehicles such as 18-wheelers?

Pure ethanol cannot be used in the US as an automotive fuel because of emission standards, but E85 (85% ethanol, 15% gasoline) can. This would greatly reduce gasoline consumption.

An electric motor can produce more torque than a internal combustion engine of similar size. The proper electric powerplant could power an 18-wheeler.

Nuclear power could also be used to power vehicles. It might not be the most effective way to power a 4-door sedan, but large ships could be powered using nuclear reactors.

The US military has proven my point in terms of electric and nuclear power. Military surface ships are powered by nuclear reactors. Submarines use either diesel/electric or nuclear power.

Anonymous said...

I agree with Anonymous - Pickens' comment about batteries not being able to move an 18-wheeler struck me as a strange response to a proposal to invest in battery technology for transportation. If batteries can propel attack submarines, the right batteries could certainly move 18-wheelers. Investing in battery technology could ensure that the right batteries for that task (in terms of weight, volume, storage capacity, cost, etc.) become available.

With regard to the Swift Boat issue, my recollection is that's investigation of the ads found that there was basically no way to resolve whether Kerry's or the Swift Boaters' version of events was closer to the truth, and hence no way to know whether the ads were "disgusting smears" or not. Does somebody here know something that Factcheck didn't?

Anonymous said...

I think nuclear power must play a larger role in the future. Think about this: we know you can run a large industrial nation on nuclear power (e.g. Japan, Korea, France). Wind and solar power are nice, but the idea that we could actually run the country on these technologies is purely a dream at this point. So, it's all well and good to support these things, but I wish Gore would spend more of his political capital promoting what is currently the best green energy source in existence (i.e. cheap, abundant, safe, etc.): nuclear power.

It's also nice to know that natural gas is so abundant and can be used for transportation.

Insofar as Pickens is spreading optimism about nuclear power, natural gas, etc., I guess he's serving a good purpose. However, the economic nationalism schtick goes a little too far. I would think that taking away business from OPEC in the long run would end up being good for the world, including the Muslim world. But the stuff about Chinese batteries? Is this guy a mercantilist or something? not everything needs to be made in America.


Bill said...

I just checked

The conclusion of the article on the Swift Boat Veterans declares that there's no way to resolve the issue, which is an odd way to summarize an article that debunks every claim made by the ad