Pickens Plan Pt 1

This is the response I had to reading the initial outline of Pickens plan on his website.

Thanks for the link. Jenny was telling me about this the other day, but I hadn't seen it as of yet. I didn't look all through his stuff, but checked out the main video and some of the supporting documentation.

I've been an advocate of exploring alternative energy sources and drilling in the U.S. to decrease our dependency on foreign oil. No matter what you do (drill or alternative) this is not something that is going to go away quickly. I want to make sure I address that because I think a lot of people hear "we need to drill!" and they think that means that the problem will abate itself immediately. Not so.

So, I agree with Mr. Pickens that we need to reduce our dependence on foreign oil and it will take time to develop. But, let me explore that briefly and for a few moments:

His math doesn't quite work out and is flawed in a major capacity. Pickens advocates taking natural gas away from the power plants and substituting it for wind energy (22%). This plan assumes that the wind blows constantly and all the time. This doesn't work. It blows too hard, or not hard enough. This means you can only utilize turbines about 20% of the time. Surprisingly enough this is the case most of the time meaning that while we can derive energy from wind it is not going to give us enough consistent energy to pull the 20% away from natural gas. Suddenly there is a jump that says if we can get 20% utilization from turbines we can substitute it for 20% of natural gas. I haven't ran the numbers but I don't know if you can evenly swap that power or not (i.e. natural gas may have a much higher efficiency rating, and I bet it does which means it might take three or four times as much power from wind to yield the same power as that of natural gas). Power plants burning natural gas cannot completely alleviate their dependence on gas simply by using wind power. All wind powered plants rely on another form of fuel that can ramp up quickly as an energy source when wind power is not available (nuclear is not an option here). As soon as you realize this, his plan starts to fall apart. It doesn't mean it can't work at all, but not at the scale he's alluding to.

Now let's hit the second part of the plan which has flaws. Natural gas is a pretty good alternative form of fuel for cars but today we don't have the infrastructure to support it on a wide scale. This can be overcome in 10 years time. You also have an enormous expense of the auto manufacturers to re-tool and re-design the vehicles. Again, this can be overcome in time. Pickens indicates this and I agree with it. But, people aren't going to go out and get rid of their cars (or convert them) at some cost just to go to natural gas. The average lifespan of a car in the U.S. is about 18 years. So figure that even if the infrastructure became prevalent you would have a potential 20+ year time span before cars stopped burning gasoline (infrastructure+conversion+new cars+deprecation of old cars).

And what do you think is going to happen to natural gas as the demand goes up?

The last part of the plan is also flawed math. How does he arrive at 38% reduction in foreign oil from a 20% substitution of natural gas? He doesn't say and I don't know how he does it. For one thing, most people are under the false impression that our cars are the primary users of oil / gasoline. But that isn't true. It's diesel for things like trucks (still a small percentage) and power generation. Again, how he gets at a 38% reduction I have no idea and he doesn't elaborate. Perhaps the math is buried in the web site somewhere.

And let us not forget, environmentalists are already fighting wind farms all over the U.S. The government has even ceased erecting any more wind farms until an environmental impact study has been completed. Even if they are allowed to build them the costs of wind mill farms is enormous. Europe has been building these and doing the ROI for years and what they have found is that it is fataly flawed and costs FAR more (i.e. 10 times more) than they anticipated per mwh (megawat hour). They are still pushing forward and continue to build them out so that they know the true ROI / economic impact, which I think is a good idea. Sometime you have to break a few eggs to bake a cake.

Pickens says it's a blueprint. I say it's a good idea but that it needs more planning and a more qualified level of expectations (i.e. this isn't going to solve our problems right away, it may create new ones, and it may not even work as well as he indicates).

BTW - I don't have the definitive answer. I am not sure anyone does. Again, I do feel very strongly about developing oil in the U.S. and continuing to seek alternative forms of energy. We need this type of thinking (Pickens) to help move us along.

My friends weren’t real impressed with my initial thoughts. Many of them railed on me asking “don’t you think he’s already thought of all this?” and “clearly he’s an intelligent man, you must be missing something.”

Perhaps this is all true. My general response was that I indeed think that they have thought about this, but that they still haven’t produced the numbers, methodologies, etc. to back it up as anything more than theory.