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