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
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Permalink Reply by mike fallwell on -
I think we should but Brazils 50 cent tariff on Saudi Arabia
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Permalink Reply by Mark L Brady on -
Hey Bob,
I think you are getting too wrapped around the axle thinking there needs to be a device of some sort to move nat gas from electricity to the transportation fleet. The point is this, we have very ample supplies of natural gas and it is domestic. We can make the move today to a much higher percentage of nat gas powered vehicles and that alone could significantly reduce our dependency on foreign oil while keeping money in the country and creating jobs and all the while helping with the environment.
I for one prefer that we replace the amount of coal fired electricity with natural gas and at the same time move more natural gas to the transportation fleet. Wind and Solar will come over time but they will both take time - nat gas is available today.
Sure the first steps would be to power our fleets and buses and taxis and trucks - although there is some debate over the potential of replacing the really big diesels with nat gas power. The personal automobile will also develop and come along over time as we get honda and others to make them available in the US and as we build out infrastructure for refueling etc.
We have natural gas in plentiful amounts and the amount is growing every day as more drilling happens in these new shale plays like the haynesville shale and barnett shale and many others. 6 months ago we never heard of the Haynesville Shale (nat gas field). Now we think there may be Trillions of feet of recoverable nat gas just in that field alone. I think you saw my file that discussed some of these nat gas shale plays.
If we do not generate the demand for natural gas in this country then the companies drilling for it will find a way to export it to other natural gas consuming countries like Japan and Korea who have no domestic natural gas and currently pay about 2 times what we pay for it here in the US.
I can send you a lot more info on these fields if you are interested.
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Permalink Reply by Bob Bancroft on -
Well there does need to be a means. I don't know how else to make the point.
It would be as if someone looked at our housing crisis, and simply said, "Well there is plenty of money in the country. So I don't see any reason why any homes should be in foreclosure." That's nice, but the world doesn't work that way. The market determines how that money gets allocated amongst the billions of entities that comprise it. It is a collective decision based on incremental revenue and incremental cost, risk and reward, etc.
It's the same thing with this issue. Sure there is a good amount of natural gas in the country. That doesn't mean you can assume that it just flows over to transportation. Let's say you owned a power plant that generated electricity using natural gas. And Boone started building wind turbines. Do you just turn off your plant one day, sell it, and then open a gas station with an NG pump?
It's not legos. You can't just pick an entire segment of the economy and move it around like a puppetmaster. There have to be the correct economic incentives in place to make that happen.
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Permalink Reply by mike fallwell on
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Monopolies work to restrain the free market.
The purpose of a democracy is to protect the public.
That seems to have failed.
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Permalink Reply by Charles Russell on -
Bob,
As you have correctly stated there has to be a mechanism to shift NG usage from power generation to transportation. Until more details of the Pickens plan are released we can only speculate what that mechanism might be. Here is my guess at how it could work....
1) Natural gas power plants are one of the main sources of peaker power. That is to say that many are only used at peak demand times. The reason they are used this way is because they are easy to start up and get a premium price for electricity during these peak periods. Wind power will require a higher percentage of back-up power than traditional power plants due the obvious nature of wind. This will create a natural oppertunity for NG power suppliers and Wind power suppliers to cooperate. A large supplier of wind power will need to have agreements with other power suppliers to meet their obligations to the grid during times when the wind does not blow. This need will be met by NG power plants. Once wind mills are in place they will be able to supply power much cheaper than an NG plant because the fuel is free. Power companies will naturally want to buy the lower cost electricity from the wind power producer and the wind power producer will have to have a back-up source when the wind isn't blowing. The Pickens plan calls for the % of NG power to be reduced. As more cheap wind power comes on line NG plants that currently run all the time will be approached by wind power producers to be their back-up. All of the current capacity that the NG plants represent will be required for back-up for wind and those plants will willingly shift to the back-up role because they can't compete on a cost basis and this will offer them the most econimic use for their plant.
2) The government will offer tax incentives to transportation companies such as Fed-Ex, UPS and many others to convert all of their delivery trucks to NG. Our tax dollars (unfortunately) will be used to convert government fleets at the federal, state and local level to NG. What all of these have in common is these types of vehicles have a central location where one fueling station can be used to all of the vehicles. Companies will go along with this because they will be able to use the less expensive fuel and improve their bottom line. The tax payers will go along with this because the government will show that over the long haul the changes will save the government money and that prices will come down for gasoline.
In conclusion the mechanism(s) that will allow the Pickens plan to succeed are a combination of free market forces ,Tax incintives and our tax dollars.
Theres my trial balloon so poke holes in it at will.
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Permalink Reply by Mark L Brady on
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i think that was a fine trial balloon
What we need to keep in mind is that this is all very fluid. there are nat gas fired plants and coal fired plants and wind and solar all being built and added to the grid today as our demand for electricity continues to grow.
more wind is going to take time to develop but when it comes we will just burn less gas or coal, we will not likely shut down the plants that are in place today but rather slow down the construction of new ones AND just burn less nat gas or coal at the existing plants. we will be able to supplement with more and more wind over time.
Bob, i think you are trying to think of this in a discreet way and too literal - that we pull nat gas out and shut down the plants. that would not be the case at all.
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Permalink Reply by Eric Straatsma MS on -
Part of the answer to this whole oil supply problem is to make all states energy deregulated as Texas and New York are. Give people a choice of switching to green energy through their energy provider. Deregulation leads to choices, incentives and lower prices, as these two states show, and the website illustrates specifically, with real world prices you can check on from many providers.
In regulated states, there is no choice and utilities have a monopoly hold on everything. They will not change. They have a strangle hold on everyone and will not let them go.. Consumers are powerless and helpless for the most part.
By contrast, if customers have a choice, as they do for long distance service, then they can switch FAST, and easily to a green energy company that supplies all of their power from wind for example.
Consumer demand will drive the green market as well as investors who will supply it to the demand, rather than utilities freezing everyone out of choice and forcing everyone into extinction due to burning carbon based fuels and 10,000 years of buildup of toxic radioactive fuels.
For more information on this see www.energy526site.com
Quick electric rate comparison website for deregulated Texas and New York and green power sign up, if you want it today. www.electricityratescompared.info
At the sites above, you can see much more in depth information, compare rates if you live in Texas or New York and sign up for green power if you live in those states.. Also, find out how to actually make this green energy thing HAPPEN, TODAY.
We cannot wait another thirty years for the government or anyone else to save us. We have the power NOW to change things TODAY.
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Permalink Reply by Thomas Ketchum on -
AN OPEN LETTER TO MR. T. BOONE PICKENS.
We have joined your effort to reduce U.S. dependency on imported oil and gas and, in that connection, are presenting you with a method for increasing the efficiency of present natural gas usage, as it relates to fertilizer production in the United States.
Our plan is proven to increase nitrogen delivery efficiency by more than 40%, compared to currently-used methods of creating dry chemical fertilizers and dumping them on the ground.
What we are offering you is a simultaneous solution to (1) Homeland Security, (2) Agriculture, (3) Environmental concerns, and (4) Economic Stimulus and Development concerns, which are of increasing interest to all Americans.
What we have to offer is a 100% environmentally “green” liquid fertilizer manufacturing installation and processes, along with patented formulae, which produce liquid ecological fertilizers (N-P-K, plus micro elements) using common non-toxic mineral compounds.
The formulations do NOT, per se, include any organic materials. However, here in Europe, these formulations are so ecologically friendly ("green") that they are certified for use in "organic" farming operations.
These machines produce N-P-K fertilizers WITHOUT EVER using dangerous, explosive, Ammonium Nitrate. Accordingly, you will find that a broad deployment of these machines, throughout our nation can be a big help in the "War On Terror", since they form the basis of restricting Ammonium Nitrate to a very very few, large industrial farm operations. As such, terrorists will have a much harder time making Oklahoma City-styled bombs.
We have erected a pilot facility (for sales purposes, so as to not give away formulae secrets during actual operations) near the city of Buzau (about 100 km from Bucharest). We are prepared to allow close inspection of this facility by you or your designated representatives and/or by the United States government in Bucharest, which could confirm any and all claims we make about this enterprise for anyone interested.
We are requesting that you or someone you trust undertake a “fact-finding” trip to Romania to witness the machinery and the processes after an initial evaluation by the aforementioned appropriate local representatives of the U.S. government who are presently in Bucharest.
Thereafter, we would ask you to seriously consider corporate sponsorship of a deployment of these machines along your proposed wind generation corridor (as spelled-out in the Pickens Plan). Thereafter, we ask that you propose legislation back in the Congress, which would place these machines in service throughout the United States in sufficient numbers and in broad enough distribution (as to area) so as to support subsequent legislation to strictly curtail and limit access to Ammonium Nitrate fertilizers, as a measure to assist in “the War on Terror”. The machines and processes are needed because, until now, no large-scale, commercially-viable alternative existed to Ammonium Nitrate fertilizers.
Only with a nation-wide mandate to increase efficiency in nitrogen delivery, such as can be achieved by the large-scale use of these machines, can the aforementioned 40+ % increase in natural gas use efficiency be had, as it relates to natural gas use in fertilizer production.
With these machines, you eliminate a readily-available explosive from the public domain. This does not even touch the other benefits to be had from these remarkable fertilizers.
In the spirit of patriotism, we are prepared to work with you to ensure that costs for deployment of this technology is not prohibitive and also does not run counter to either good business or the National Interests of the United States.
Specifically, we offer to train trainers here in Romania and there, in the United States, once domestic production is funded and, otherwise, fully supported.
We have all information at the ready to support our proposal, immediately. Please contact us, directly, for more specific information.
Think how many people would be put to work simply manufacturing the machinery (places like closed shipyards or other facilities closed during a recent economic slowdown would be perfect, for example).
We hope to hear from you or from someone of equal vision for a more energy self-sufficient future for the United States.
While we would rather keep this simple and deal, exclusively, with one man of vision and means, we are prepared, in any case, to license those who might wish to use our inventions on some lesser scale.
Sincerely,
Thomas L. Ketchum, Jr.
and Elena M. Ketchum
for
SC Thopy7 SRL
Strada Dr. Ion Nanu Muscel, Nr. 13, Ap. 3
Bucharest, Romania
050521
fax: 011-40-21-410-8910
office: 011-40-73-100-3792
email: FOLPLANT@AOL.COM
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