Boone Pickens’ recipe for energy independence is a winner

How many Americans would knowingly fill up their car with gas imported from countries on the State Department’s travel warning list?  Millions of us probably are doing just that every day.  A local fill up en route to the office or a ballgame may very well be contributing directly to the $36 billion America sends to Nigeria each year.

Americans rely on China, the Middle East and Africa for oil and other commodities, while simultaneously engaged in a “war on terror.”  Nineteen percent of America’s oil comes from the Middle East and a like amount from Africa – countries politically unstable and often hostile to the United States.  In a very real sense, we are enabling our adversaries.

America’s trade deficit swells to $40.2 billion even as China has surged to become the world’s leading exporter. Our trade deficit widened to its highest level in a year last December, largely as a result of higher oil prices. All this as unemployment nationally pushes ten percent.  Our economic recovery and long-term growth is closely linked to our reliance on foreign oil, even though an estimated 300,000 to 400,000 jobs could be created as a result of decreasing America’s dependency on oil. 

America relies on energy — especially energy refined from oil — to operate; without this “liquid gold,” our country would grind rapidly to a standstill.  We import 70 percent of the oil we need, sending $700 billion overseas every year.  Of course, there’s nothing inherently wrong with allowing the free market to work in this regard; other countries have what we need, so they sell and we buy. 

Free-market competition, however, should not dictate we put our heads in the sand and continue importing oil with no thought to the future. What makes sense in the short term and the long term is for the U.S. to develop domestic natural gas reserves as a supplement and as an alternative to oil.  In 2008, America consumed 23 percent of the world’s petroleum, 57 percent of which was imported while we hold less than two percent of the world’s known reserves.  However, we have sufficient known natural gas reserves spread across the lower 48 states to supply America with energy from natural gas for the next 90 years.

Overdependence on imported oil tethers America to unstable and hostile regimes, and requires the U.S. to stretch and plant its military presence across the globe. Obtaining oil from mercurial suppliers such as Venezuela, or extracting it from states like Iraq by means of occupation, represents neither fiscally sustainable nor wise policies.  To secure continued reliable access just to Iraq’s reserves, will require us to assume responsibility for re-development of that country’s oil fields and refining capacity – at a cost of tens of billions of dollars and extended support for the country’s political system.

But there is a bright spot in this debate.  Its name is “T. Boone Pickens.” Pickens’ effort in “Ending America’s Dependence on Foreign Oil,” represents sound policy and clear thinking in an arena often devoid of both.  He is drawing attention to this issue in a non-partisan manner and putting his own money into the effort.  He also has drawn attention to legislation in the U.S. House of Representatives and Senate that would encourage alterative energy development and natural gas exploration.   

While we should allow the free market to operate, we should also use a little common sense; which would tell us it’s irresponsible to empower our adversaries, tie our country’s hands diplomatically and financially, and seriously hamper our economic recovery.  Doing business with countries hostile to American interests is not smart — investing in our own industry and creating jobs is smart economics, smart politics, and smart foreign relations.  And T. Boone Pickens is showing us the way.

73 comments Add your comment

James Habbgott

February 15th, 2010
6:26 am

Wouldn’t taking advantage of our own oil also create a crapload of jobs?

Mtn. Man

February 15th, 2010
7:11 am

Bob, You are a wee bit late for the “Pickens Plan” party……….T. Boone had this movement up and running over a year ago,as you probably know, but is worth bringing up…….your support is welcome,as is all thinking americans, as well as any and all politico/investment types! Please keep writing about Boone and Boone,s Army! Regards, and a FAN, Mtn. Man

dleemo

February 15th, 2010
7:14 am

Thank you for writing about the “Pickens Plan”. This a a no brainer and a sure fire job creator which is exactly what our country needs. His plan essentially creates an entire new natural gas industry. It is a shame and typical that you here nothing from the talking heads in Washington about this plan and there is no sense of urgency to move his plan forward.

Karl Marx

February 15th, 2010
7:26 am

Mtn. Man Pickens, has been at this for several years. The one piece of the equation is drilling for our own oil plus developing more natural gas for auto’s. Cap and Tax will kill what Pickens is trying to do. I think the current administration needs a little help with that.

MrLiberty

February 15th, 2010
8:12 am

If Pickens is supporting it, I am sure he stands to benefit from it significantly.

Anyone who honestly believes that we have anything close to a free market in energy needs to have their head examined. If we actually did have a completely free market in energy, we would never have gotten to this point. Likely we would have kept our military noses out of the middle east as well.

What we do not need is any more “encouragement” of anything. Already we give nearly a trillion dollars a year in free security to every oil company doing business in the middle east (courtesy of course of our military and blackwater). Our dependence on any specific energy source, whether foreign or domestic has been the direct result of energy “policy” by our government. Who knows what energy sources might be viable today if our military had not helped keep oil prices low. Who knows how much cheaper food might be today if government wasn’t subsidizing wasteful ethanol programs that push corn towards that misguided energy source.

And if we are going to be concerned with monies to foreign countries on some stupid “watch list” , then we should be concerned with the billions our government steals from us every year and sends to these countries under the guise of “foreign aid.” Criticise my gas purchases all you want, but at least they are voluntary. When the government sends the money I have no option.

Bob, before you start supporting clowns like Mr. Pickens, why don’t you contact some of your friends in the Libertarian Party who actually understand the energy market, or maybe even visit mises.org on the web to find out exactly what free markets are about and how “energy policy” and “promoting” certain energy sources only makes the problems worse.

Marcus Aurelius

February 15th, 2010
8:14 am

I am a major supporter of this plan. Unfortunately the Democrats are too stupid and the Republicans are too spineless to figure out how to get this thing going. It is terrible that we are funding our enemies by buying their oil. One thing we can all do though, is don’t ever buy gas from Citgo. It’s well documented that is Hugo Chavez’s gas so at least we know by not buying it, we can hurt his business.

jconservative

February 15th, 2010
8:15 am

We need the whole Pickens package, not just the natural gas part. We need to develop the “wind corridor” that is sitting there unused, waiting on financing. From where is the money to come?

I am afraid we missed our opportunity. When Bush designated Cheney to develop the administration’s energy plan there was an opportunity to embrace the Pickens plan. But Cheney elected to continue with the importation of oil, in hindsight a predictable decision as he came from the that industry.

So Bush doubled the national debt with nothing to show for it as pertains to the nation’s economic future. Now we are saddled with massive debt and no stomach, understandably, on the part of the electorate to increase the debt to pay for the Pickens proposal.

Bottom line: we know what needs to be done, but we do not have the political will to do it. So we do nothing but wring our hands and cry how unfair it all is.

“Two roads diverged in a yellow wood”
And we simply scratched our head, and stood.
(With sincere apologies to Robert Frost)

rascal

February 15th, 2010
8:16 am

Look, the Pickens plan is no different than any other plan where one industry or one guy in this case is looking to the government to subsidize his solution. The free market can handle the problem if our federal and state bureaucrats will get out of the way. Bob, as a libertarian, how do you support any involvement by the feds to solve this problem. Allow drilling and all solutions to come to the forefront through the battle of ideas in the free market. Once again, a well intended idea needs my money to work, sorry, but it means it is not a good idea.

Great Gatsby

February 15th, 2010
8:35 am

Boone Pickens is the new Don Quixote.

William

February 15th, 2010
8:38 am

jconservative

February 15th, 2010
8:15 am

Were you around in the 70’s when we tried to drll for more oil and build new refineries? The wackos stopped it with the help of the progressive liberals. We would be energy independent with the resources to research new energy types.

Personally I believe the progressive liberals have lied and continue to lie and have starved an oil based economy of its needed resource. I do want to see nuclear, wind, and natural gas energies brought on-line. Just do it and stop blaming who is responsible for past failures. I need cheaper energy and I need it now.

swampjacket

February 15th, 2010
8:59 am

T. Boone Picken’s Plan?? Huh, Jimmy Carter said all of this 30 years ago!! Besides, everybody and their Momma already supports this except those Drill Baby idiots!

William

February 15th, 2010
9:24 am

swampjacket

February 15th, 2010
8:59 am
See what I mean by wackos!

Dependency?

February 15th, 2010
9:39 am

Boone Pickens’ elliptical logic mars the mercurial debate over foreign oil with vapidly-saturnian verses that overlook plutonium as an energy source.

jconservative

February 15th, 2010
9:40 am

William February 15th, 2010 8:38 am

Yeah I was around in the 70’s. Way before then as a matter of fact.
And I do remember refineries being stopped in their tracks. And I remember, over the years into the early years of Bush 43’s second term,
the halting of any attempt to drill off of the Atlantic, Pacific and Florida west coast. Bad for tourism as I recall.

But we continue to send $700 billion overseas every year for oil.
That is enough money to build Pickens wind corridor, convert every 18 wheeler & bus to natural gas and have hundreds of billions left over.

But we do not have the political will to do anything. If the Democrats propose converting the truck fleet to natural gas, the Republicans will oppose it. If the Republicans propose the same thing, the Democrats will oppose it. And you know this is true.

So we sit and scratch our heads.

Jess

February 15th, 2010
9:49 am

Picken’s is also in favor of opening our most promising oil producing ares for exploration. Everyone knows we can not be self supporting for our oil needs but to deny companies the most promising fields is insanity.

Supposedely, the deniers are doing this for environmental reasons, but the truth is that it is more environmentally harmful to ship our oil to the US than to drill here. There has not been a significant production related accident or spill in the US for over 35 years, however there have been many tanker related accidents and spills. The more we produce here, the fewer tankers enter our waters. You could say it’s the green thing to do.

And as a by product this would create thousands of high paying jobs at a zero cost to the government. It is a win/win.

neo-Carlinist

February 15th, 2010
9:49 am

Mr. Liberty, sad but true. our military does not “defend the Constitution”. it is retained as “muscle” to protect the interests of a handful of corporate clients. Remember the run-up to Iraq; “…oil will pay for the war…” ExxonMobil enjoyed record profits in 2005, 2006, 2007 and the American taxpayers got a $1 trillion (and growing) tab. I guess the “free market ain’t free”.

Jess

February 15th, 2010
10:20 am

Neo…

So our entire military budget goes to protecting oil interests. I didn’t know that.

DAVID: AJC -Truth Detector

February 15th, 2010
10:22 am

BOB——WE WILL NOT GET RID OF THE COMBUSTION ENGINE…….in use since FORD invented the assembly line…..FORGET IT……COMBUSTION ENGINE is in for the foreseeable future..2010———-2090

sean

February 15th, 2010
10:24 am

1) natural gas for trucks = good for environment = energy independence
2) drilling for oil in US = more oil for cars = energy independence
3) wind & other alternate energy sources = good for environment = engergy independence
4) All = MORE JOBS FOR AMERICANS!!!!!

Why Congress cant get behind this is crazy… Of course unless it is health care, nothing else matters. It is called multi tasking folks.

Jess

February 15th, 2010
10:30 am

sean,

One problem with the wind farms. The largest wind project to date is in West Texas, where it will create over 300 American jobs. This project will create over 2000 jobs in China, however, where the turbines will be manufactured. We borrow from China to create jobs in China. Pretty sweet deal.

Jefferson

February 15th, 2010
10:31 am

Smaller engines..will save gas and reduce speeds.

William

February 15th, 2010
10:33 am

Bob, the truth is out! There has not been any global warming since 1995. I want Al Gore prosecuted for deceiving the public. You are a lawyer and neet to have this man indicted immediately. He is directly responsible for gas prices jumping up to $4.50 a gallon. He is a con! What are you waiting on?

neo-Carlinist

February 15th, 2010
10:33 am

Jess,

where did I say “entire military budget”? the US has spent roughly a trillion dollars on the war in Iraq, and for what? Saddam was not a threat to America. the WMD ruse was exposed. he wasn’t gearing up for an invasion. if ExxobMobil or Haliburton or the Saudi Royal Family needed to ensure the continued flow of Iraqi oil, they should have hired a private army to “secure” Iraq. instead, the whole boondoggle was presented as a “national security” issue, so the American taxpayer picked up the tab (assumed the risk), while the private sector players reaped record profits (rewards ). this isn’t even some silly “conspiracy theory”. this is what is known as geopolitics, and as a previous contributor noted, Jimmy “neo-con whipping boy” Carter saw the true “threat” in the 1970’s, and he was dismissed as being weak. read your Constitution, amigo. the military is suppose to defend US (citizens).

William

February 15th, 2010
10:35 am

Drill baby drill! Al Gore has been proven to be a progressive liberal liar AGAIN. This time he has cost billions of dollars to the American citizen. I want more drilling.

interested observer

February 15th, 2010
10:42 am

Ah, simple solutions to complex problems. Isn’t it grand how the average American, who cannot write a clear, simple sentence, has the solution for the nation’s energy woes that all of our politicians, industrialists and policymakers over the past 40 years have been unable to find? Bob, please forward all of the comments from your blog so Congress will know exactly how to make America energy independent.

William

February 15th, 2010
10:46 am

interested observer

February 15th, 2010
10:42 am

Start observing the progressive liberals past and present and you will see where we got bogged! Just to LET you know!

Jess

February 15th, 2010
10:50 am

Neo,

So if understand you correctly, the entire Iraq war, which, by the way has cost $687 billion thus far, was simply fought to get their oil. Thanks for the history lesson. I’m surprised we were able to get all the other countries who were involved to go along with this scheme.

The Austrian Botherhood

February 15th, 2010
11:23 am

Pickens and Gore. Both are rent seekers looking for federal subsidies. Barr is still learning about liberty and free markets.

AH

February 15th, 2010
11:27 am

what a load of dung.
Check out Stossel’s special where he had T. Boone on it. you’ll see that this is nothing but a wealth redistribution plan. T. Boone isn’t putting any real money behind this plan he is only spending enough to get everyone to lobby congress so that he can reap enormous government handouts.

itpdude

February 15th, 2010
11:39 am

At our current rates of consumption, we have about 100 years of natural gas remaining. We also have a bunch of coal. And we still have not explored thorium based nuclear energy, which is safe and its waste is not weaponizable.

There is much to be done for energy in the US. Unfortunately, a lot of the money-men, like the Bush family, desire to keep the US dependent on foreign oil. It helps their Saudi friends.

janet

February 15th, 2010
11:41 am

Several years ago, while traveling in Europe, we got off the beaten path and meandered into the countryside and were puzzled by the funny looking towers with 3 blades at the top. I now know they were ‘windmills’ and whether private or public is unknown. However, they were not ugly or intrusive – like some of our refineries can be. Anybody ever traveled US 1 in NJ and watched ‘Dante’s Inferno’ at night? What is the matter with us? The windmills provide cheap and silent as well as unobtrusive power and we snub our nose? We may have to get even lower than we currently are in our economic stature before we wake up. The environmentalists make a lot of noise but no sense. Let the wind blow those egg beaters. I’m all for them NOW!

neo-Carlinist

February 15th, 2010
11:52 am

Jess, forget about History, let’s look at economics. first off, the $687 billion is the DoD only. It does not include the “costs” (Blackwater, etc.) charged by the State Department, CIA, etc. and YES, we invaded Iraq SOLELY for oil. Do you think we (US) cared about “rape chambers” or the interests of the Iraqi people? I am not saying that oil does not have a strategic value, and/or that it was or was not in America’s best interests to invade and occupy Iraq. my point is (pay attention), the American people assumed the risk and the private sector interests reaped the windfall. All this talk about 9/11, WMDs, despots and “stability in the region” was just marketing. We (further) de-stabilized the region, there were no WMDs or links to 9/11, and the Iraqi people are dying in a civil war. And yet, ExxonMobil has enjoyed record profits, the price of crude oil has spiked (Saudis, and even Iran have benefited) and yet; American taxpayers have picked up the tab AND American consumers are paying more for energy.

Road Scholar

February 15th, 2010
11:55 am

Jess, we can’t produce the wind machines because the US has stuck there head in the ground (literally) only looking for oil. There is a company in the midwest that is trying to get geared up to produce the windmills, but have had trouble getting their financing and permits to begin to deliver.

William and others who cannot , or will not, understand the issues with oil, suck on a tailpipe.See what that gets you!

JimC

February 15th, 2010
12:16 pm

Just one problem: The left wing America-haters who are in control want this country to fail, and they’re succeeding.

Brakeman

February 15th, 2010
12:18 pm

Liberals don’t want energy independence.

It takes away one of their causes (looks like the global warming thing is proving to be a farce also) and leaves them little to whine about except maybe too many guns, etc.

Latigo1026

February 15th, 2010
12:31 pm

In the late 1990s I was driving natural gas powered delivery (UPS sized) delivery vans in Virginia. We are long overdue for the promotion of natural gas powered cars. I suppose that the usual suspects, the oil and gasoline lobbies, are preventing any state or federal promotion of a result that could very easily be achieved without much investment in research. The method is already out there.

Jess

February 15th, 2010
12:58 pm

Neo,

Just one flaw with your argument. We already had access to all the Iraqi oil we wanted. We had a self imposed embargo against buying it from them. This started with the first Iraq war, and continued through the Clinton years. Saddam would gladly sell us all we wanted. As for the rest of the middle east where we do help them produce their oil, our companies are protected by the local governments. Even in Saudi, where we do have a military presence, all oil workers are protected by Saudi government. Same is true all over the world.

Now if one wants to make the argument that it is vital to American interests to try and avert a full scale uprising involving the entire middle east, this would be valid. It is also vital to all industrial nations thast this not happen.

And try as you may, an 8.5% profit margin is not exactly gouging.

Hillbilly Deluxe

February 15th, 2010
1:21 pm

This is the first I’ve heard of T Boone’s plan in quite a while. He was a lot more vocal about it when gas was $4 a gallon and he stood to make a lot more money than he does now that gas prices are down (relatively speaking).

I do agree with the overall premise that we should be energy independent though.

And an 8.5% profit margin is a number that tons of businesses would give their eye teeth for.

Jess

February 15th, 2010
1:30 pm

Hillbilly,

Remember, this 8.5% was a record year. There are plenty of businesses who make more than this routinely without Pelosi accusing them of immoral profits.

neo-Carlinist

February 15th, 2010
1:36 pm

Jess, just one flaw with your response, it’s rooted in a myth. I do not have the time, but Google “Iraq, Oil Production Contracts” or the term “production share agreement/PSA”. the production and sale of Iraqi oil (under Saddam) was controlled by Iraq (nationalized). ExxonMobil, Shell, Chevron/BP (also known as British Petroleum – there’s one of our stallwart allies), et al DID NOT have access to the oil. Ergo, even if Iraq sold the oil to the US, the “profits” realized by the aforementioned private sector players would be nowhere near what they are in the post-Saddam “market”. Why do you think France and Russia “opposed” the war? It wasn’t on ethical/moral grounds. They simply didn’t want to lose their access to Iraqi oil (because they did not have an embargo, as we did). As I said, this isn’t even some silly “grassy knoll” theory. This is how we (USA) does business. It’s no different than any special interest “lobbying” the government for special treatment. On a smaller scale, think about the link between drug companies, the CDC, and the “swine flu”. Think about the link between Al Gore, cap and trade (policy) and the “war on greenhouse gas”. You need to put the Kool-Aid down and look at this “big picture”.

mpercy

February 15th, 2010
1:45 pm

I’ve been harboring an idea that we’re hoarding our oil reserves, intentionally not using them up and buying our oil from elsewhere while we can. And the series of Presidents and Congresses knows this and makes all the noise they do to cover up the plan. Then we’ll be the last man standing when the oil elsewhere is all gone.

It’s a crackpot idea, I know, but one that has popped into my head.

mpercy

February 15th, 2010
1:48 pm

Crackpot ideas pop into heads all the time. Look at this comic: http://www.salon.com/ent/comics/this_modern_world/2010/02/01/this_modern_world/index.html. It’s got Dick Cheney in it too!

mpercy

February 15th, 2010
2:00 pm

“And an 8.5% profit margin is a number that tons of businesses would give their eye teeth for.”

Yeah, those evil for-profit health insurance companies, for one, would love to improve their profit margins to 8.5% from a meager 3.3%, which Ms. Pelosi does say is immoral.

Jess

February 15th, 2010
2:01 pm

Neo,

I never said Exxon or any other country controlled oil in Iraq. Of course Iraqi oil was nationalized. So is the oil in the rest of the middle east. The only money realized by the companies you apparently scorn is by contract with the government to help manage their production. Production of oil is very expensive, and most countries have contracts with large oil companies, and oilfield service companies to manage this effort.

I did however say Saddam would have been happy to sell us all the oil we wanted. The decision not to by was ours. Therefore the idea that we went to war with Iraq for their oil is absurd.

Hard Right Hook

February 15th, 2010
2:44 pm

Why are we not drilling in the Bakken find?

http://www.theoildrum.com/node/3868

Jess

February 15th, 2010
2:58 pm

Hard Right Hook,

Enjoyed the link. The Bakken basin may not be able to put a large dent in our imports, but Bakken, combined with known reserves in Alaska, and the huge potential of the areas of the gulf which are currently off limits, and you can start to make a pretty good dent in our imports.

neo-Carlinist

February 15th, 2010
3:08 pm

Jess, you talk about “production” cost/contracts like it’s some liability. I don’t have a problem with oil companies per se. I simply question the spending of American blood (the lives of servicemen) for their treasure. You typed one sentence too many (your final one is a doozie). Of course we went to war for oil. every president since Carter acknowledged the strategic importance of the Middle East, and cited OIL as the reason. Why do you think we are allies with Saudi Arabia? Why do we American troops stationed all over the Middle East?

Hard Right Hook

February 15th, 2010
3:17 pm

Jess

February 15th, 2010
2:58 pm
Hard Right Hook,

Enjoyed the link. The Bakken basin may not be able to put a large dent in our imports, but Bakken, combined with known reserves in Alaska, and the huge potential of the areas of the gulf which are currently off limits, and you can start to make a pretty good dent in our imports.

Every dollar we spend here does not go to Mecca or some other sandhole full of camels. The aggregate volume available (ANWR, Gulf, Bakken, etc) is worth the effort. I say start today.

No one really knows how big Bakken is, but you’re right, Jess.

Jefferson

February 15th, 2010
3:18 pm

What wrong with small cars ?

Jess

February 15th, 2010
3:19 pm

Although I favor continued drilling for oil, I believe we should be looking at alternatives. But rather than the revolution this administration proposes, I think out of necessity it will have to be an evolution. Retooling an entire country is a big task, and will take a long time.

Natural gas is an obvious first step in the evolution. The problem we have however is not a lack of the resource itself, but a lack a distribution capacity. Any move to use natural gas for transportation on a large scale will have to be accompanied by a massive increase in pipelines across the entire country. What we have today can barely service individual and business use for non tranportation usage. Building a pipeline infrastructure of this scale will take many years.

That’s why in the interim we should produce all of the oil this country has to offer. It’s safer and better for the environment to produce it here, than to ship it in. There are lots of good jobs to be had as well. It just makes good sense.