The Pickens Plan, Hybrid Electrics and National Leadership

In his eponymous plan to break the stranglehold imported oil has on the American economy, former oil man and corporate raider T. Boone Pickens puts together a cogent, well reasoned argument and strategy centered on coincidentally carrying out two key national initiatives over the next decade: having wind power supply 22% of national electrical power production and shifting the natural gas currently used to supply 22% of national electrical output to transportation.

The Hybrid Owners of America is all in favor of Part One of the “Pickens Plan”but argues that using natural gas as a transportation fuel makes no sense when technological advances, energy security and environmental concerns are driving growing demand for plug-in hybrid and electric vehicles and finally giving auto manufacturers the impetus to manufacture them on a large scale.

Whether it’s hybrid-electric or natural gas powered vehicles, perhaps the biggest question and challenge remains, however, a point raised by former Intel CEO Andy Grove in a recent article in The American magazine: how can the huge population of existing vehicles be converted to make use of cleaner, domestic fuel/energy sources as quickly as possible?

The Pickens Plan

That this debate is even taking place at such a level is heartening, and indicative of how rapidly and forcefully energy, the environment and their socio-economic aspects have come to occupy a central place on the national stage. The Pickens Plan has one big thing going for it: it seems eminently practical.

A comprehensive, generally accepted Dept. of Energy study indicates that wind power can supply 20% of national electricity supply by 2020. Pickens’s plan calls for eking out a bit more and getting that up to 22%. That’s the percentage of U.S. national electricity supply that is at present generated using natural gas.

As he further notes, natural gas is the second largest natural resource in the U.S. Moreover, he adds, there are more 8 million natural gas powered vehicles on the roads worldwide. Though lacking a retail distribution network, there's already a strong industrial-commercial ecosystem in place that without too much of a stretch could probably be extended to include building out a retail distribution network.

“We need a bridge. Step 2 of my plan begins to replace foreign oil with American natural gas for cars and trucks. It’s cleaner, it’s cheaper, it’s abundant and it’s ours. It buys us one thing money can’t buy: time, time to develop the renewable fuels that will break our dependency on foreign oil,” Pickens says in one of his YouTube videos on the subject.

The economic motivation is there. In another YouTube video, Pickens points out that the US currently imports 70%-- $700 billion worth—of oil used nationwide each year. Growing wind generated electrical output to 22% of national power output and freeing up the equivalent amount of domestic natural gas supplies for transportation would knock some 38%--around $300 billion-- off annual oil imports, according to Pickens’s estimate.

Is it reasonable, or even technologically and commercially feasible, to expect electric power producers to phase out and mothball their natural gas turbines and power plants, however? And for them to rule out using natural gas as an alternative fuel source for power generation? 
And for someone to step in and take the lead in rolling out a retail distribution network?

It seems unlikely, and it would certainly take a level of national coordination and government, intra- and inter-industry cooperation probably not seen since World War II, something anathema to “free market’ capitalist rhetoric and today’s market reality.

Mandating Existing Vehicle Engine Conversions?

Whether it’s hybrid/electric, natural gas or some other fuel power, the biggest challenge looks to be how to convert the existing population of vehicles away from gasoline and diesel towards cleaner fuels. As Pickens himself points out in one of his videos, there are 750 vehicles per 1,000 Americans. The figure in China is 44 of 1,000 though that’s going to move higher and higher in coming decades.

How easy is it to convert a vehicle to natural gas? How many businesses are out there doing it? As was noted in a previous Triple Pundit post, there’s a growing, though still somewhat suppressed movement towards converting diesel engine vehicles to use recycled vegetable oil, a seemingly can’t miss idea that has so far been missed or avoided.

This is the point former Intel CEO Andy Grove raised in a July article entitled, “Our Electric Future,” published in The American magazine. In it, Grove called for a nationwide action plan to convert all used vehicles to dual fuel-hybrid electric.

While this is a huge and challenging task, technologies exist that, while not ideal, can get us off to good start, he argues, alluding to the history of the PC industry. ”The first personal computers, for example, were little more than toys. They fascinated cognoscenti and hobbyists, but compared to the mainframe computers that were the workhorses of that time, they were limited. PCs quickly grew in capability and eventually reached parity with mainframes and then surpassed them in efficiency and computing power. Such approaches, of starting low and moving up, have been named ‘disruptive technologies’.”

Fortuitously, gas guzzlers like pick-ups, SUVs and vans – some 80 million of them on the road today – are the easiest to convert, and doing so should be “our first priority,” Grove argues.

The Possible, the probable and the actual

“The instincts of conservationists have been to improve what is already pretty good—compact cars with decent fuel efficiency. Our national priority to decrease the amount of oil-based energy dictates that we go after the low-mileage part of the fleet first.

“Estimates show that converting these vehicles to dual-fuel operation, even with electricity providing no more than 50 miles of driving range between daily recharging, could cut petroleum imports by 50 to 60 percent—a stunning opportunity. “

While Grove and Pickens may advocate alternative paths, the bearing they call for us to set and goals they call for us to work together to realize are the same.

Another big hurdle presents itself, however: the lack of national leadership, consensus and even political will to make either of these seem really feasible; certainly the Bush administration was never expected to, and hasn’t, espoused such goals and aspirations. The McCain-Palin ticket is unlikely to either.

As Pickens says, “We can reduce oil imports by 38%-- $300 billion-- by doing 22% wind power and take out 22% of our natural gas and put it over here in transportation. This can all be accomplished in less than 10 years if you have the right leadership-- and that’s the key to it.”