Discuss these critiques of the Pickens Plan
Hello all. I recently heard several critiques of the Pickens Plan that seemed sound to me. So I would like to hear from you a rebuttal to these points. (I am asking this as someone who is very enthusiastic about the Pickens Plan, but always interested in the "other side" of the argument as well.) These rebuttals come from the testimony which followed that of Mr. Pickens' before the Senate.
(1) Assuming that we generate the equivalent of ~22% of our current electrical demand from Wind, there is no mechanism by which we can dictate that the "freed up" natural gas moves to the transportation sector. For example, the Wind power could displace Coal instead - it really depends on the underlying economics.
(2) The United States only has about 3% of the world's proven and unproven reserves of natural gas. The nations that have most of it? It's the very same nations that currently have most of the world's oil. So is a dependence on natural gas actually any better, from the geo-political / security standpoint?
Thanks and I look forward to your replies.
(1) Assuming that we generate the equivalent of ~22% of our current electrical demand from Wind, there is no mechanism by which we can dictate that the "freed up" natural gas moves to the transportation sector. For example, the Wind power could displace Coal instead - it really depends on the underlying economics.
(2) The United States only has about 3% of the world's proven and unproven reserves of natural gas. The nations that have most of it? It's the very same nations that currently have most of the world's oil. So is a dependence on natural gas actually any better, from the geo-political / security standpoint?
Thanks and I look forward to your replies.
Tags: Pickens, Plan, Senate, criticism, debate, hearing
Views: 28
Replies to This Discussion
-
Permalink Reply by Kurt Stiffel on -
Hi Bob, I always like someone who plays the devils advocate.
#1) Coal is cheaper because of its abundance , easy access v. NG, and its easy transport via rail with nothing more than a tarp over it, no fear of explosions etc... (check DOE for exact stats on coal v. NG)
#2) If NG were to move coal from 50% to 30%, then the price of oil must have plummeted. Otherwise, market forces would (or yours and mine wallets) dictate why am I still paying for oil when NG and Coal are so much cheaper. So far every time gas drops, NG drops too,so this truth should hold true going forward.
#3) We are finding more and more NG almost daily/weekly and if you watch this hearing (CHK stock symbol CHESAPEAKE or MadMoney jimCramer all the time mentioning new finds).
#4) We can use shale like never before, Pickens mentions a dutch report coming out called from Shale to Shining Shale, because we figured out how to get NG out of shale. He sd if you told him 10 years ago this was possible, he would have bet you $100k to a cup of coffee you were a kook, and wrong.
The way to force the issue, and I know that wasnt part of your question, but I'm a rambler... is Buy the 167,000 gas stations 4-8 CNG pumps(maybe an island or two out of their 6-8 islands) , cost $100k each or $16.7 Billion , or 8 days of gas usage at our current pace. Also throw in 1million $6k PHiLL home refueling units cost $6Billion, total of $16.7B + $6B= $22.7 Billion, or 11.5days worth of gas receipts here in the good ole' USA, or about 45 days worth of gas taxes collected. Remember that HOLIDAY GAS TAX plan, screw that buy us access to CNG in 12-24-36 months. Let Pickens get his GRID Rights uniformly implemented (he says private industry will build the grid if necesary but screw that, we dont want my power co owning the GRID electric highway, we need to ,if they want to own some of the wind and solar farms thats fine but not the GRID, cost of GRID $200 Billion , or 100 days of gas receipts, or 400 days or gas taxes. We'll worth it consider being enslaved to OPEC is the other option).
Peace and power to the sheeples, Kurt
-
Permalink Reply by Bob Bancroft on -
Hi Kurt,
I don't think it is a simple matter of forcing the issue by investing in CNG infrastructure. We have an obstacle before we get to that step, which is somehow applying market pressures so that it is the NG, and not the coal, that is displaced by Wind power.
Everyone has said coal is cheaper but I wonder if anyone could point me to data supporting that? I googled and found this article. It mentions that the primary driver of an increasing cost to produce electricity is the "skyrocketing" cost of natural gas.
So, that would support the argument that Wind would likely displace NG first.
However it may raise some eyebrows at the idea of using it to power our vehicles - especially given that some areas of the country (New England) are about to hit a crisis trying to heat their homes on oil this winter, and will likely be switching to NG (thus increasing demand and therefore price even further).
I'm thinking of the infrastructure and time involved in making the switch from a gasoline based society to an NG one, and wondering if we wouldn't have just been able to develop a more viable electric or flexfuel car in that timespan.
As far as your comments on Wind and the required investments there, I agree with you that it will be money well-spent.
-
Permalink Reply by joe on -
My major criticism is this:
This "plan," as its called, is going to be lobbying the Congress for tax incentives for massive windfarms of the type the Pickens has invested roughly half of his fortune in. If this "plan" is such an economically viable plan, why on earth does Pickens need a taxpayer subsidy for his investment? Just invest your money Mr. Pickens, and let the chips fall where they may. The last thing this country needs at this time is another billionaire a la Bear-Stearns suckling on the taxpayer.
This is a free market, so get off my taxpayer dollar! Invest and risk your own funds, not mine!
-
Permalink Reply by Rexrino on -
MRW said: "...Well, there are those who have lept in feet first..."
Good description.
I think we can all leap into the game by simply starting our own home conservation efforts. I've done away with all my incandescent light bulbs ( and GE did not go under....) :)
I'm into waste recycling and replacing all processed food with whole food, which is better for you. I'm thinking real hard about getting rid of cable TV (Televisions use a lot of power) and just using the Internet for all my entertainment needs.
If I can find a locally grown food, I buy it. Sometimes it may cost a little bit more, but the money stays in my community, so I get a side benefit of helping to create local revenue to offset the higher cost.
-
Permalink Reply by Sam on -
I think there is an easier plan to swallow than the Pickens Plan that addresses the two criticisms Bob Bancroft mentioned in his initial thread- go electric. It makes no sense to replace one fossil fuel to power our cars with another unless the conversion from one fuel to the other is easy, which it isn’t… Don’t get me wrong- it’s great that we can get natural gas domestically and that it burns cleaner than gasoline, but it’s not a renewable resource, it still pollutes, and it requires us to create a new natural gas infrastructure to support local distribution.
You can easily and efficiently convert oil, coal, natural gas, bio fuels, solar, wind, nuclear, geothermal, tidal, and hydro power into electricity AND you don’t have to transport it by ship or truck- you just send it down a cable to wherever you want. I agree that fossil fuels are better at some things, like heating and cooking (sorry microwave), but electricity has more practical uses than any other form of energy, it’s insanely easy to distribute, and electric motors are more energy efficient than any internal combustion engine.
According to the Pickens Plan, we’ll use wind generated electricity to replace the natural gas we use to generate electricity so that we can use the natural gas to make compressed natural gas (CNG) to replace 38% of the foreign oil we buy every year. Huh? So, we are using a renewable, domestic energy source (wind) to replace a domestic fossil fuel (natural gas) so that we can buy less of an imported fossil fuel (oil) while still increasing our dependence on limited fossil fuel reserves for all our transportation needs… Wow – are we ever selling ourselves short!
Honestly, who enjoys driving to a gas station every week or so to manually fill up your car with gasoline or CNG? Wouldn’t you rather plug your car in when you get home and get on with your life? Why spend the research money or give incentives to the American auto industry to build CNG vehicles- we’ll just be tying ourselves to another fossil fuel that globally we have relatively little of compared to (guess who?) OPEC. Pushing for electric vehicles NOW is a great alternative because we can use ANY type of fossil, organic, or renewable power source to make it. You want our country to wean itself off of foreign energy, then make our cars run on the most readily available and easily distributed energy there is: electricity.
Electricity is easy to generate, easy to transport/transmit, and electric motors are much more efficient than combustion engines… so, what are the catches? Well, it’s fixing our aging national power grid and creating cheaper and more efficient storage (i.e. – batteries)
Think of what it will take to make the Pickens Plan work: expanding the natural gas infrastructure of our entire nation to support local distribution, giving the auto industry incentives to design and build CNG vehicles, hoping that a lot of Americans to go out and buy CNG-powered vehicles, and giving Mr. Pickens government subsidies to build wind farms. Updating our national power grid, giving the auto industry incentives to design and build electric vehicles, mass producing new battery technologies, and giving Americans government subsidies to buy electric vehicles doesn’t seem any harder to me, so why settle for a plan that Mr. Pickens himself considers a stop-gap strategy? I think the technology for electric vehicles is ready, but I don’t know if our auto industry or if we as a nation are ready to give up on the internal combustion engine.
-- Contiued below... if you've read this far, I thank you --
-
Permalink Reply by Sam on
-
-- Continued from my previous reply --
If a start-up California company like Tesla Motors (www.teslamotors.com) can make a $100,000 electric sports car that goes 0-60 mph in 4 seconds, has a range of 200 miles, and costs 2 CENTS per mile to fuel (folks, that’s not $4 for a gallon of gas; that’s $4 for a FULL TANK!), you can’t tell me that the our automakers in Detroit can’t make one better and cheaper in less than 10 years. Actually, Chevy has a promising electric car called the Volt that should go on sale in 2010. Electric cars are not only easier to maintain and more reliable because they have hundreds of fewer moving parts than a traditional car, but they also produce zero emissions!
We need to invest in the national electric power grid to increase capacity and eliminate brownouts and blackouts. I hear arguments that this will be expensive, which is true, but I believe we already spend plenty servicing thousands of gas stations, fuel trucks, and secondary oil pipelines every year- what if we didn’t have to do that anymore? Are we going to stop using electric power anytime soon even if we convert to 100% domestic oil and natural gas to power our vehicles? Nope, not a chance… so instead of maintaining and expanding our fossil fuel infrastructure to include CNG at local gas stations, we should focus on our national electric power grid- we’re ALWAYS going to use it!
The one area where electricity can’t compete with oil and natural gas is ease of storage. Building a big storage tank for a liquid or gas is a lot easier and cheaper than building a giant battery. Interestingly enough, with an upgraded power grid and millions of electric cars, this problem solves itself. Each plugged in car works as a local battery or storage facility for the power grid. The LAX airport and several businesses in California are already allowing their employees to plug in their cars while they sit in the parking lot so that they are always charged- plug in some solar panels or have some solar cells built into the roof body panel of your electric car and now you are generating excess power that can be sold back to the power company once your car is topped-off!
We do need to develop cheaper ways to mass produce more environmentally friendly batteries that take up less space, but there are already small private companies making amazing 100% electric vehicles using existing lithium-ion batteries. Most batteries are toxic, but they are fully recyclable. Why should we put up with a stop-gap program like the Pickens Plan that is expensive, still pollutes, and makes our transportation industry even more dependent on fossil fuels?
The Pickens Plan is better than what we’ve got, but for roughly the same amount of money and effort we can bypass his plan and go for the real goal: reducing our dependency on any one type of ENERGY.
Electric vehicles are the way to go.
P.S. - I apologize for the length of my replies- I hope reading them was worth you time and consideration.
-
Permalink Reply by Len Gould on -
Agree fully. Also worth pointing out that the only reason oil and gasoline are becoming expensive is because they are in short supply, and for an item going into shortage it makes no sense economically to substitute your own local small reserves (offshore, ANWR, SPR, natural gas) early in the shortage cycle for those of a foreign supplier. In the early part of the shortage cycle, you're smarter to conserve your own local reserves and buy as much of the foreign supply as they will sell you before the price goes higher. That's just simple ECON101. Then, while doing that, bust a gut working to develop a replacement system which is completely independent of oil AND gas, which is obviously, as referenced above, battery hybrid electric vehicles which can recharge their batteries from the grid, PHEV's, with smart metering and real-time pricing to make variable electrical sources like wind and solar on the same market-value footing as eg. nuclear, clean coal with sequestration etc. CNG vehicle conversion makes no sense al all that I can see.
-
Permalink Reply by Rexrino on
-
And if the whole world has moved away from Oil, opting for alternatives based on some scientific breakthrough, or a consumer driven yearn for cleaner electrical power, how much will our $300.00 oil be worth?
-
Permalink Reply by Don Castella on -
Spoken like a true totalitarian statist.
-
Permalink Reply by Don Castella on
-
Electricity is generated by Coal, Nuclear, Natural Gas, Oil, and Hydro. Wind and Solar add < 1%. A headlong plunge into electric vehicles will drive up electricity demand and use more of the above non-renewable resources.
We need to ask technical questions like: which is more energy efficient: powering vehicles with gasoline/diesel/natural gas or burning fuels in a power plant to generate electricity and distributing it to recharge electric vehicles?
-
Permalink Reply by Bob Bancroft on
-
Interesting question that I'm sure nobody has tried to seriously answer.
But I suspect that if nuclear, wind or solar are encouraged to blossom and reach full commercial scale, we will find that they are vastly more efficient.
Remember, if you want to ask tough questions, we need to ask what the real cost of imported fossil fuel is. That would include things like the cost of funding military operations which are necessitated by this dependence, etc. Let me put it in a less accusatory way: what if our "national interest" were a little more grounded in things happening here in the nation, and not in the Middle East?
Hard questions to answer objectively. Would make a nice doctoral thesis. :P
-
Permalink Reply by Rexrino on
-
What the plan does is buy us some time to refine and grow the Alternative solutions. It is an easy to implement plan, if everyone comes on board, it takes some of the pain of high fuel prices off the back of the population.
The down side is: it is a stop gap measure the also includes the idea that we have to get started and develop alternatives. It keeps the money (700 billion dollars) from leaving our country and going into the bank accounts of foreign countries.
The first thing the NG objective does is keep the money locally that is going overseas.
As we move the NG to transportation, we have to also move some wind power to replace the NG generated electricity.
Each time we successfully do this, we generate more money to work with by sending less overseas.
Eventually, we will be keeping all the money (700 billion dollars) in our country.
As far as helping our economy, with each watt of power we can generate for free, we reduce the input into production and lower the price we have to charge to generate a profit. We become more competitive in the market. If the other countries remain on Oil Energy for production, their price will continue to climb as the price of Oil climbs. We will corner the market in production and everyone will buy our products because they are cheaper. I think the main reason we have trouble competing in foreign markets is because they save money on labor. In America our dream is to put more money in peoples pockets, not less. So we need to compensate by using cheaper power.
© 2013 Created by PickensPlan.
Powered by
Badges | Community Guidelines | Report an Issue | Terms of Service
