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T. Boone’s Shell Game — one look at the numbers …

March 10th, 2009 · 11 Comments

T Boone Pickens continues his relentless, high-cost media and publicity effort to promote The Pickens’ Plan to seemingly raving audiences, selling a superficially appealing but fundamentally unsound concept.

In short, T Boone is calling for generating more electricity from wind, using that to displace natural gas from the electricity system, and then using that natural gas to fuel vehicles as a path to reduce America’s dependence on foreign oil. After a variety of challenges, T Boone has modified (slightly) the concept, most notable moving from talking about natural gas in a wide range of vehicles to focusing narrowly on just converting 350,000 trucks

Putting aside the problems of relying on wind to displace natural gas, putting aside the questions of T Boone seeking to raid the public coffers to line his own pockets, putting aside the questionable efficiency of natural gas as a transportation fuel, putting aside Pickens seeming desire to ignore climate change challenges, putting aside … Let us take a short romp through the numbers of T Boone’s 350,000 tractor-trailer concept and see if the numbers work out.

Some assumptions:

1. Target is reduction of oil use (and, by corollary, imports)
2. Judged by dollar required per barrels of reduced oil use

Pickens concept

T. Boone is calling for 350,000 tractor trailers, roughly 5 percent of the US fleet, to be converted to natural gas. Estimates of the total program cost range about $30 billion. Let us assume that these “new” trucks travel twice the average mileage for trucks, thus about 100,000 miles per year. (In other words, this is a generously high estimate as to reduced oil use due to this change.) At 100,000 miles/year, these 350,000 tractor trailers would have a total annual mileage of 35 billion miles. At 5.5 miles per gallon, a reasonable range to use, this would displace 6.36 billion gallons of fuel use annually. Wow. A huge (HUGE) figure, no? This translates into 151.5 million barrels of oil, or about 7.5 days of US oil requirements. T Boone’s plan cuts a week off US annual oil requirements. On a daily basis, this translates to 17 million gallons or about 415,000 barrels — just above 2 percent of US oil demand. This places the cost per daily reduced barrel of oil in the range of $75,000 (surprisingly close to the tax subsidy that Pickens calls for for natural gas converstions of tractor trailors).

And, by the way, there are still the costs of the natural gas (including its greenhouse gas emissions which are lower than oil/gasoline, but only somewhat).

$30 billion to cut US oil demand by 2 percent. Is that a bargain?

Well, let’s look at two other opportunities.

Real-time feedback systems

For roughly $50 per vehicle, every single light-passenger vehicle in the United States could be fitted with a real-time feedback system: miles per gallon, cost per mile, or other feedback information directly on the dashboard. “The Prius Effect”, the impact of that real-time feedback, is said to be in the range of a 10 percent gain in fuel efficiency. At $50 per vehicle, equipping 200,000,000 light passenger vehicles and small trucks would cost $10 billion. For that $10 billion, which likely could be implement within 18 months or less, the US fuel demand would drop by over 1 million barrels per day. (And, by the way, have reduced traffic accidents and fatalities due to better driving habits developed in response to the feedback.) This path offers a reduction of daily oil imports at the cost of $10,000 per barrel (without those natural gas costs and, of course, without considering the other values offered, such as reduced pollution and improved safety).

Emphasizing proper air inflation, clean air filters, and proper oil when oil is changed could, by the way, provide another 10 percent gain in fuel efficiency … at nearly no cost.

Electrification of the rail system

For about $80 billion, the United States could electrify and improve the nation-wide rail system (and provide potential power corridors for Pickens’ wind power). Electrification of rail would basically eliminate the 250,000 barrels/day used by diesel-powered locomotives. Electrification, alone, would increase rail capacity by about 15 percent due to improved acceleration/deceleration, but this $80 billion would buy improvements as well. The improved capacity would enable shifting more cargo (back) onto the rails, with a reasonable estimate of at total of 2.5 million barrels/day in displaced oil use total.

Thus, in addition to reducing oil imports, electrification of rail has other benefits for the economy and environment.

$80 billion for 2.5 million barrels/day in reduced oil imports is $36,000 per barrel/day of reduced demand.

Above are just two (of many, many) examples of how to cut US oil demand at lower cost and with higher benefit than the snake oil that T Boone is attempting to sell the nation.

Clearly, we should not be, writ large, in an ‘either/or’ situation in trying to solve our energy and environmental problems. There is no single Silver Bullet. But, The Pickens Plan is no Silver BB but more an alluring poison pill with questionable empahsis on pushing natural gas toward lower efficiency uses, leaving coal out of the equation, and placing massive amounts of resources into moving transportation from one fossil foolish addiction to another. This quick analysis provides just one more angle to understanding that T Boone is seeking to sell something that we just shouldn’t buy.

In summary,

  • T Boone: $75k per barrel cut from daily oil demand + additional costs for natural gas
  • Feedback systems in cars: $10k per barrel cut from daily oil demand w/other benefits
  • Electrification of rail: $36k per barrel/day cut from oil use w/other benefits

Where would should we put our dollars?

Tags: Energy · the pickens plan · trucking

11 responses so far ↓

  • 1 Jonsgi // Mar 11, 2009 at 9:48 am

    Why can’t we do both? There is the monetary challenge, but unless you demonstrate we only have a finite amount of money (which of course we do, but it needs to be at a level such that we can only choose one of these plans), I’m not sure its fair to rank these plans. Both would do well to make us more energy secure and abate climate risks. Of course, I’d much rather wind replace 20% of coal.

  • 2 matthew weible // Apr 1, 2009 at 7:03 pm

    I don’t believe that these plans should be ranked either.

    This is not ranking them, but providing comparisons to aid our considerations.

    A good idea is a good idea.

    Well, yes, “a good idea is a good idea”. The question to consider is whether The Pickens Plan meets that criteria. On the whole, it doesn’t look to.

    These are all good plans because they get us away from (foreign) oil and coal.

    How does The Pickens’ Plan “get us away from … coal”?

    So, come on, let’s all just get along and do the right thing.

    Absolutely. Want to do “the right thing” (actually right things …). The Pickens Plan doesn’t meet reasonable criteria for “right thing” if one is concerned about the intersecting E3: economy, energy, environment …

  • 3 Mike Johnston // Apr 1, 2009 at 7:40 pm

    Hi,

    First off, Pickens advocates “anything American” so he would agree with you that hybrid cars and electric trains are great.

    The question becomes what works most cost effectively, across all of the various areas of concern. This is only one of many discussions and produces a path of thinking that shows that conversion to natural gas vehicles is a highly cost-inefficient path to cut our oil dependency — without mentioning that pesky issue of global warming.

    Second, he isn’t advocating converting any existing vehicles to CNG fuel.Instead utilizing CNG fuel in new trucks. Large fleets replace trucks every 2-4 years so such a move would have fairly rapid implementation.

    And that matters because …? If the entire concept is flawed, why should rapid implementation be something favorable?

  • 4 Energy COOL: Ford Putting Feedback Systems into Practice // Jul 2, 2009 at 12:10 pm

    [...] efficiency feedback systems on the dashboard of every American automobile (both existing and new) could well be one of the most cost effective tools for quick reduction in America’s oil depend… and, as well, to improve traffic safety (and reduce) fatalities.   These feedback systems can be [...]

  • 5 Senate Democratic Policy Committee (DPC) Cozying up With T Boone Pickens // Jul 29, 2009 at 1:40 pm

    [...] The Pickens Plan is not cost effective when compared to other options for reducing our foreign oil dependency; [...]

  • 6 Robin Chase // Jul 29, 2009 at 4:53 pm

    For the same $50 for the Prius meter, if we used a device that was an open platform, onto which car owners could download any number of applications, we could also write down the cost of a large number of after-market systems: transponders, congestion avoidance data, navigation systems. Etc. Here are some thoughts on the immense value of open devices from my blog:
    http://networkmusings.blogspot.com/2009/07/new-gm-might-be-with-program.html

  • 7 A. Siegel: Senate Ds getting warm and cozy with T Boone Pickens | Brunei fm News – World Perspective // Jul 29, 2009 at 5:03 pm

    [...] The Pickens Plan is not cost effective when compared to other options for reducing our foreign oil dependency; [...]

  • 8 CAP’s American Fuel: Flawed on so many levels // Apr 27, 2010 at 1:00 pm

    [...] analysis of The Pickens’ Plan supports a conclusion that it is not a cost effective path for r… (and, by the way, is simply not effective in reducing emissions) when compared to other options.  [...]

  • 9 A Lame Excuse for Lame Duck Legislation // Oct 1, 2010 at 12:43 pm

    [...] reduce America’s reliance on foreign oil, there are far more cost-effective and more rapid paths to reducing oil dependency (such as putting real-time mpg feedback devices on car dashboards).  Per barrel/day reduction of [...]

  • 10 Senate About to Enact Truly Fossil Foolish Act // Mar 13, 2012 at 10:14 am

    [...] An analysis of these three resulted in the following cost per barrel reduction in daily US oil demand: [...]

  • 11 Did ACEEE diss the power of feedback? // Apr 27, 2012 at 1:49 pm

    [...] reminder of the energy impact of their (for example) acceleration, there is a good possibility that one of the most cost effective paths to reduce U.S. oil demand would be to put feedback devices on a…. We “know” that people modify their behavior in the face of feedback — but do [...]

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