Pickens Plan

[tabasco_joe]

After seeing a number of T. Boone Pickens commercials for his energy plan I decided to check it out. While I have some minor disagrements with the plan it appears the most comprehensive balanced plan I've seen. It also appears scaleable to a national level. Anyone else look this over? Thoughts?

 

[JackM]

All I heard about it is was the whirling sound of oil drills in the ANAWR.

 

[Acristickid]

TJ- I think it is part of the solution. I do not think wind and solar will work everywhere (due to lack of sunny days and lack of windy days) but those concepts along with natural gas, more drilling in ANWAR(supposedly only 2000 acres effected)- and off shore drilling along with many more nuclear plants will help.

US is shipping a billion plus dollars a day to foreign countries for oil and gas. It is becoming a national security issue in addition to the severe economic problems it has caused.

While I dont like to see negative enviromental impacts- it is just being realistic.

T Boone- while he seemly looks like some kind of crusader of clean energy- I suspect he is really looking for his next windfall.

 

[JackM]

Oil is dying and he wants to wring out every last drop and keep the last of the money going into it here the US -- and his pocket. He probably is already heavily invested in the alternatives he's pushing. Drilling in environmentally sensitive areas isn't even a band-aid. The effect on supplies will be minimal, but the effect on US oil profits will be substantial for the last gasping years of this outdated, filthy energy source. Finding new domestic sources only delays the inevitable move to alternatives and in a way slows the pace of invention that must move forward quicker rather than slower. Everything he is saying sounds positive except the part about raping the remaining pristine lands where oil might be harvested.

 

[tabasco_joe]

Jack, every viable energy solution I know of has an environmental impact. It's a question of setting the correct regulations and enforcing them.

While I'm still trying to understand Pickens motives the plan makes sense at a higher level. Off shore and north slope drilling are not major components to his plan. The key is to implement a similar plan with correct incentives and safeguards to result in a cost effective solution. If Pickens solution works to bridge into new technologies that will not be invented, refined, and produced in mass scale for at least 25 years then I don't care if he makes a large profit.

The key to his plan is to move natural gas from electric generation to use in automobiles using wind power to replace the electric generation. I don't see projected costs in his plan but if wind generators can get down to 10 to 15 cents per KWH I think it could work. I also don't see projections for per mile costs of the CNG but if it's anywhere near the equivalent of $4 a gallon it probably makes economic sense.

As an insider to the development of technologies I don't see how adding some additional oil to the reserves slows invention. We have two sayings that we give to the non-technical upper management who try to force the schedule. First: 9 women can't make a baby in one month, second: you want it bad you get it bad. Sort of like those crappy engines we had in the early 70's when the politicians demanded instant fuel mileage and emissions improvements.

 

[tabasco_joe]

acristickid wrote:
TJ- I think it is part of the solution. I do not think wind and solar will work everywhere (due to lack of sunny days and lack of windy days) but those concepts along with natural gas, more drilling in ANWAR(supposedly only 2000 acres effected)- and off shore drilling along with many more nuclear plants will help.

US is shipping a billion plus dollars a day to foreign countries for oil and gas. It is becoming a national security issue in addition to the severe economic problems it has caused.

While I dont like to see negative enviromental impacts- it is just being realistic.

T Boone- while he seemly looks like some kind of crusader of clean energy- I suspect he is really looking for his next windfall.

I've done some investigation of wind, solar, and bio-fuel solutions. My conclusion is the only one that scales on a national level is wind and that is if the cost of current technologies is cut by about 50%. Certainly do-able in volume. Solar is only viable in the SW at anywhere near current costs and then only in large scale solar farms.

For bio-fuels to support something like 50% of our transportation needs we would need a crop that is many times more productive than corn coupled with fuel cells.

I priced out a solar solution on my house here in PA and found that if prices dropped 90% from current I would get a 25 year break even on the investment, not including any interim maintenance costs. We get too little sun energy in the winter and too much humidity in the summer to get the efficiencies high enough.

 

[vcregular]

Well, the guy is a business man...and now owns more water rights than any other individual in the US, on the largest underwater aquifer in the possibly the world - - the Ogallala Aquifer - - 100 times more water than Lake Mead when full.

Would make sense to me that he would want wind power on his land to power the pumps that would then ship, and sell his water to the thirsty west.

Other than that, I do not know much about his plan.

 

[JackM]

tabasco_joe wrote:
Jack, every viable energy solution I know of has an environmental impact. It's a question of setting the correct regulations and enforcing them....

Off shore and north slope drilling are not major components to his plan....

As an insider to the development of technologies I don't see how adding some additional oil to the reserves slows invention....

Some energy solutions are worse than others and oil has two evils associated with it: pollution and dependence on foreign supplies. All increasing domestic sources does is lower the price (very slightly). It won't replace foreign sources, nor likely even decrease the amount of imports, it will just lower the price very slightly.

If additional drilling isn't a major component of his plans, then let him alter his public relations blitz to eliminate the statement: "I say DRILL, DRILL, DRILL!" This only encourages the wrong-headed thinking that defiling remaining sensitive wilderness areas is any part of a "solution" to our energy needs.

Finally, it is a pretty solid maxim that "necessity is the mother of invention." If drilling extends the need to find alternatives by even a day, that is another day lost in reaching the goal of transition from non-renewable to renewable energy sources.

 

[Maurice]

No better way to create necessity than to use up all the current energy sources NOW!

 

[pcray1231]

This is crazy! Comon guys, drilling for oil domestically has absolutely no effect on the amount of oil we are going to burn, only on where it comes from. Yes, it'll be years before we see it, but we're all wishing this decision was made years ago. If we don't, we'll be wishing we had in 10-15 years.

I don't think enough people understand the scale of the problem. While wind, geothermal, and solar have a bright future (the former two moreso than solar) and should be aggressively pursued, the need is much greater than either can hope to achieve in the time frame its needed. From an air pollution and carbon emission standpoint, its not oil and gas that need addressed, its coal, which account for the vast majority of our carbon emissions. Wind is great, but it can't quickly replace coal, oil, gas, and aging nuclear plants immediately as a power source.

The REAL solution:

1. Abandon biofuels now. It's an inefficient, dirty means of transportation, which will require huge amounts of forest to be turned into farmland to make a significant dent.
2. Convert as many vehicles as possible to natural gas. It's cleaner, more efficient, and we have more of it domestically.
3. Drill for oil and gas now. We'll need the gas for transportation, and even a drastic drop in use coupled with an increase in production, we'll still have to import. The less imported, the better.
4. With gas going towards transportation, we need electricity sources. Make it up with nuclear, wind, geothermal, and solar (where applicable). Do all the above as aggressively as possible. Grow the infrastructure, knowledge base, and market.
5. To the extent it can be obtained, close the traditional coal plants. Start with the oldest, dirtiest plants. Pursue clean coal if a quick fix is needed.
6. Keep developing batteries for hybrid natural gas vehicles. When the grid becomes cleaner than gas, then we can discuss using it for transportation, but right now pure electric would be dirtier than oil because the grid is based on coal.
7. Continue to pursue small scale energy savers. Geothermal heat pumps, a solar panel on the roof to run an attic fan, compact fluorescents, etc. All tiny, but combined they are helpful and they are economical at the same time.

 

[pcray1231]

JackM,

Drilling WILL reduce foreign imports, not replace, but reduce, so that the money goes to American companies, and American employees, to be put back into the American economy. It may reduce price slightly. It won't delay alternatives, merely hold us over till we can get them going on a mass scale and reduce the massive energy shortage/recession on the horizon.

Oil drilling, today, does less "defiling" of wilderness areas than the massive land needs of wind and especially solar. A small, one acre drilling rig produces as much energy as 3 ginormous wind turbines in the most efficient location, or 20 acres of solar panels in Nevada, or 200 acres of solar panels in good old PA. While wind and solar definitely should be used more because of the lower carbon emissions (there's still some emmissions in production), be careful of claiming they're better as far as land use.

 

[tomgamber]

I don;t get the whole "if we drill now" concept...It'll take 10 years before we ever saw a drop of that oil if we could drill "today" and there isn't anything to drill with up there yet. A land rig takes over a year just to build...forget planning and the red tape. Offshore you are looking at 2-4 years just to build the rig.

They are talking about building an offshore wind farm in Del. that would be ready 6 years earlier than it would take to get ANWAR into production.

He is another interesting "fact" I read...

"The U.S. consumes about 20 million barrels (3,200,000 m³) daily. If the Arctic National Wildlife Refuge oil reserves were used to supply 5% of the U.S. daily consumption -- most is imported from Canada (19%), Mexico (15%), Saudi Arabia (11.5%), Nigeria (10.5%) and Venezuela (10.5%)[11] -- the reserves, using the low figure of 4.3 billion barrels (680,000,000 m³), would last approximately 4300 days, or almost 12 years. Using the high estimate, the reserves would last approximately 11800 days, or 32 years"

So I guess my question is...Then what?

Another thought...If people conservatives are always saying there is too much government then why are they making it so gov't gets to decide which direction we should go in to solve this. Stop inhibiting each others progress. Let them race it out, fair and square. The worst possible thing that could happen is that we produce enough energy (both renewable and fossil) to meet the need.

 

[pcray1231]

tom,

The "drill now" point of view would, in select areas, remove pre-existing regulations that prevent drilling, i.e. less government. The oil companies have wanted to drill for years. It shouldn't be left up to a pure race, though, the dirtier fuels win easy. Coal is cheapest, oil next, gas next. There should be help for renewables, and there is.

The 10 year figure is debatable, but its probably in the ballpark. Red tape, rigging, drilling, recovery, etc. all take time. Then refinement isn't quick either. The phrase "till we saw a drop" is not literal, it means until it becomes gasoline and is sold to consumers.

And, your numbers are correct (or at least close) for "technically recoverable oil", which is itself a moving target, there's 3 times that much oil there and more will become recoverable as drilling technology continues to advance. So, if ANWR were to supply 100% of the U.S. oil, it'd last us at least 12 years, maybe as many as 32 years. But thats not how it works, the same numbers say ANWR could supply 50% of our oil for 24 to 64 years, 25% for 48 to 128 years, see where we're going? With the rate you can pull the stuff out of the ground and transport it, we're probably talking more like 10%. Which, based on you're figures, means we can pretty much stop buying oil from Venezuela for the next 120 to 320 years. So the real question is whether to drill in an arctic tundra with a human population of nearly zero and supporting only a small number of animals (yes, there's caribou), or in a rainforest with a high human population and giving the money to a dictator who hates us? By the way, ANWR is only part of the "drill now" plan.

As far as "then what", the running out of oil is far into the future, in other words, if we move away from oil, we won't run out. Nobody, not even the "drill now" crowd, is arguing that we shouldn't slow down our use of oil in favor of alternatives. Its just important to realize that abandoning oil is a slow process. We should use less, drill more, meaning we import a lot less.

BTW, I do know about the wind farm in Delaware and support it wholeheartedly. The great plains area is particularly ripe for wind power.

 

[TimMurphy]

Dear ray,

The oil companies don't want to drill, they want to secure the rights to drill, there is a huge difference, and it's the one thing they don't ever talk about. If they lock up the rights they have the World by the gonads.

Once they secure the rights they can and will do nothing until they get the dollar figure they have in mind for the oil and gas. Look at all these companies paying $ 3000.00 an acre for the "rights" to drill in a Tioga County cow pasture. They have no intention of producing any gas until the price gets high enough that they reduce all the standed costs they incurred by leasing those rights.

Why would a person would produce something that is already selling at a high price in the hopes of lowering the price?

Regards,
Tim Murphy

 

[Padraic]

Tim,

I agree. The American oil co's that are supposedly going to do their patriotic best to reduce energy costs by drilling here and drilling now have reduced refinery capacity. That's as much to blame for high gas prices as speculators or imported oil. Doesn't fit in a campaign slogan though...

 

[pcray1231]

Tim,

I work with oil (as well as gas, wind, nuclear, etc.) companies all the time. Not all oil rich areas are the same. The depth, rock types from surface to oil, surface conditions, type of oil, etc, etc. all comes into play. Oil companies make an estimate on the cost to recover oil from a place, compared to what that oil is worth. At the point when the technology and price of oil all coincide so that they can break even or turn a profit, they drill. It's that simple. So you are correct, but the "price figure" for each area is very different, they start with the "easy oil" and move on to the more expensive stuff. They secure lease rights based on their future estimates of where they'll be able to turn a profit. It does nobody any good if they start recovering oil at a higher cost than they can sell it, because unless it were subsidied (and it's not, its taxed much more than subsidied), then oil prices go up, not down. The recoverable oil in ANWR is "easy" oil, and could be recovered relatively cheaply, as are several other plots the oil companies are aiming for. For the rest of the oil leases already aquired, the choices are to subsidy it and drill now, wait for technology to be able to recover it more cheaply, or wait for oil prices to go up enough so that it turns a profit. Historically, the latter two options both work simultaneously until the point where they meet, and I don't think it should be subsidied.

As far as refinery capacity. Yeah, its a problem. Red tape is extraordinarily expensive to get through these days, to the point when the break even point on a new refinery is 70+ years assuming oil use stays constant. As it is speculated by everyone, including the oil companies, that oil use will decline regardless, then a new refinery is a waste of money. The options are to cut the red tape, thus making a new refinery cheaper and perhaps cost effective, somehow force the companies to build anyway through regulation, or just do nothing and hope natural disasters don't shut down our refineries (which are sufficient if and only if they all run at near full capacity all the time, but as oil use declines, they'll be plenty sufficient). The latter approach seems to be this Congress's plan, and it assumes its a temporary problem because oil is at its peak use. It's scary and risky, but I can't say its wrong.