Pickens energy plan

Dallas Morning News/Houston Chronicle:

Boone Pickens has a plan to solve the country's $700 billion-a-year dependence on foreign oil.

Replace gasoline with natural gas. Replace natural gas-fired power plants with wind, solar, nuclear and clean coal. Basically, replace foreign oil with domestic fuel without straining those resources."We've gotten ourselves in a trap," Pickens said last week in an interview in his Dallas office. "The problem is, we said, 'Send us the oil, and never mind the cost.' "

"Things were fine until the price went vertical on us," said Pickens, who calculates that, at $140 a barrel for crude, Americans spend $700 billion a year on 5 billion barrels of oil from foreign countries. That amounted to about 65 percent of total U.S. supply last year.

Pickens kicked off a media campaign today to promote his energy policy ideas -- which align perfectly with his business investments. He'll spend tens of millions of dollars on television and Web advertising and will make talk show appearances along the way.

He aims to make energy a central issue in the presidential election. He'll challenge the candidates to go beyond pandering on gasoline prices to create real energy plans.

"I feel like I'm going into a huge arena and tapping on the glass and asking people to listen," said the 80-year-old multibillionaire.

Would the Pickens plan work?

Some of the smartest energy analysts in the country say the U.S. cannot stop importing fuel.

Besides, cutting oil imports wouldn't necessarily reduce the price of oil, if Americans just replace it with domestic oil. Nor would switching to natural gas reduce our dependence on foreign fuel if the U.S. begins importing more liquefied natural gas.

Still, shifting to natural gas vehicles could cut transportation costs because natural gas costs less per British thermal unit than oil does. And moving to more renewable energy and nuclear power could reduce electricity prices and cut pollution. High natural gas markets have boosted power prices, particularly in Texas.

"His idea has some merit," said Bruce Bullock, director of Southern Methodist University's Maguire Energy Institute. "I give him all the credit in the world for putting something out there. That's the kind of out-of-the-box thinking that will pull us out of this."

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Switching to domestic production would have huge benefits even if the price did not drop. The money would be reinvested in the US economy and it would also increase tax receipts and royalty payments to the government.

There might not be as much need for infrastructure change on the switch to natural gas as you might think. Many homes are already serviced with natural gas and the big problem for the government would be collecting taxes on it for highway maintenance. The conversion cost for existing autos might pay for itself pretty quickly.

His biggest problem with this plan like any energy plan is the Democrats. They are so anti energy they will reflexively reject anything put forward by an oil man. Add to that the fact that they want high prices and do not want domestic production and there is just not much reason for hope that they will be reasonable on the issue.