A Second Look at the Pickens Energy Plan

In all fairness to T. Boone Pickens, whom I and others have heavily criticized for trying to cash in on the desire of Americans for energy independence and lower fuel costs, the following NY Times report certainly greatly improves and supports the argument Pickens has been making, and causes me to change my mind somewhat. He wants to extend drilling for oil as much as possible, but says that’s not going to be anywhere near enough. No-one would dispute that. Pickens also says we should build massive numbers of wind turbines in order to substitute wind energy for the natural gas and oil now burned to produce electricity.

He would then convert internal combustion vehicles to the natural gas that would be freed up, and run the nation’s vehicle fleet on natural gas - at least until the nation’s scientists and industrialists are able to develop and produce a renewable biofuel that makes sense, which Pickens estimates will take at least another 10 years.

Pickens plan, as stated, doesn’t make much sense. Converting cars and trucks to run on natural gas is expensive, and doing that while establishing a supply network would probably use up the ten year period, and so would the creation of the number of wind farms we would need to make such an impact.

What makes more sense, especially given the report below on natural gas supplies, is to convert some natural gas to gasoline and diesel fuel. Germany did this during World War II using a process that is very expensive, but several American firms have announced the development of processes that they claim will produce very inexpensive gasoline and diesel. At the same time, car manufacturers can bring out some new models that will run on natural gas directly. Honda has a car out that seems to do this quite well. If you combine this with the new discoveries of immense quantities of domestic natural gas, you have the makings of a winning program for America: cheap and abundant energy from domestic sources:

1. Drill, drill everywhere
2. Build wind farms where it makes sense
3. Build nuclear plants to add electrical capacity (wind farms do not add capacity)
4. Convert some natural gas to gasoline and diesel fuel
5. Continue development of Biofuels not made from foodstuffs (both domestic oil and natural gas will not last forever)

Drilling Boom Revives Hopes for Natural Gas

August 25, 2008 New York Times (Excerpts)

HOUSTON — “American natural gas production is rising at a clip not seen in half a century, pushing down prices of the fuel and reversing conventional wisdom that domestic gas fields were in irreversible decline.

The new drilling boom uses advanced technology to release gas trapped in huge shale beds found throughout North America — gas long believed to be out of reach. Natural gas is the cleanest fossil fuel, releasing less of the emissions that cause global warming than coal or oil.

Rising production of natural gas has significant long-range implications for American consumers and businesses. A sustained increase in gas supplies over the next decade could slow the rise of utility bills, obviate the need to import gas and make energy-intensive industries more competitive…

“It’s almost divine intervention,” said Aubrey K. McClendon, chairman and chief executive of the Chesapeake Energy Corporation, one of the nation’s largest natural gas producers. “Right at the time oil prices are skyrocketing, we’re struggling with the economy, we’re concerned about global warming, and national security threats remain intense, we wake up and we’ve got this abundance of natural gas around us.”…

Most of the gain is coming from shale, particularly the Barnett Shale region around Fort Worth, which has been under development for several years. The increase in gas production stands in sharp contrast to the trend in domestic oil production, which has been declining steadily since 1970 and dropped 21 percent in the last decade alone.

The Barnett region proved that, using new technology, shale gas could be extracted on a large scale. But lately, companies have set their sights on shale formations that could produce far more gas than the Barnett….

Domestic natural gas prices have already plunged 42 percent since early July, an even faster drop in price than oil or most other commodities, in part because the rapid supply growth has begun to influence the market. Price spikes remain possible, of course, but throughout the industry the shale discoveries are causing a shift in thinking about the long-term outlook.” New York Times

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Friday, August 15, 2008 Technology Review (Excerpt)

Natural Gas to Gasoline

A firm claims to have a cheaper way to harness natural gas.
By Tyler Hamilton

“A Texas company says that it has developed a cheaper and cleaner way to convert natural gas into gasoline and other liquid fuels, making it economical to tap natural-gas reserves that in the past have been too small or remote to develop.” Technology Review

Nancy Pelosi, the House Majority Leader is supporting the Pickens plan because she believes that natural gas is not a fossil fuel. We should get this plan into operation before she learns otherwise. After all:
1. we have tried to make a practical electric car for 100 years without success
2. we have tried to make a practical fuel cell car for 60 years without success
3. our Biofuels program so far has been a disaster, and it may take many more than 10 years to make Biofuels the predominant fuel for vehicles.