National Center for Public Policy Research NPA logo

 # 574  

September 2008


 
 

The Pickens Plan: Questions Unanswered

by Reece A. Epstein and David A. Ridenour

 

Introduction

On July 7, 2008, Texas billionaire T. Boone Pickens introduced the “Pickens Plan,” an ambitious proposal to reduce America’s dependence on foreign oil by one-third over the next ten years.1 

The cornerstone of the Pickens Plan is replacing the natural gas now used to generate electricity with wind power, and then using the saved natural gas to power vehicles that presently run on gasoline.2 

It’s a bold plan from a bold man.

Pickens should be credited for understanding that America has an urgent need to secure its energy independence.  His website says: “As imports grow and world prices rise, the amount of money we send to foreign nations every year is soaring.  At current oil prices, we will send $700 billion out of the country this year alone – that’s four times the annual cost of the Iraq war.”3 

While Capitol Hill offers partisan bickering, Pickens appears to be offering a solution.  And, as Pickens is prepared to spend $58 million to promote his plan,4 his advocacy could have an enormous impact on America’s energy policy for decades to come.

But while Pickens appears confident, his claims raise questions.  Has oil production finally and irrevocably peaked, as Pickens claims?  Why use wind power instead of nuclear power?  Are natural gas-powered vehicles a viable alternative to gasoline-powered cars, and would switching to them improve America’s security?  What does Pickens believe the federal government should do to make his plan a reality?  Might he or the firms he owns benefit financially from such federal aid?


The World Oil Picture

Pickens is convinced that oil is not a viable long-term energy source for America.  His website states:

World oil production peaked in 2005.  Despite growing demand and an unprecedented increase in prices, oil production has fallen over the last three years.  Oil is getting more expensive to produce, harder to find and there just isn’t enough of it to keep up with demand.  The simple truth is that cheap and easy oil is gone.5

But Pickens’ message for America is a recycled one.  Fears that world oil reserves are on the brink of exhaustion have a long and dubious history.  In fact, according to Brian Handwerk, writing in National Geographic, “Concern about oil droughts is nearly as old as the petroleum industry itself.”6

Leonardo Maugeri, an economist7 and oil industry executive,8 explained further in the same article:

...those fears began long before oil became a critical fuel.  In the 1860s, soon after the beginning of oil’s modern age, boom-and-bust phenomena marked the advent of the new era.  Every boom [caused] an increasing fear of running out of oil, leading to overspending in oil production and refining.  It was this situation that led John D. Rockefeller [of the Standard Oil Company] to decide to avoid deadly competition in the market by eliminating his competitors.9

In 1919, the head of the U.S. Geological Survey, George Smith, predicted that America would run out of oil by 1928.10

Pickens refers to the fall in oil production since 2005 as a justification for his claim that oil production has permanently peaked due to dwindling supplies.  He has dismissed evidence to the contrary out of hand.  In testimony before the Senate Commerce and Energy Committee last June, for example, Pickens said:

Could we drill our way out of [the oil crisis]?  No, there’s no way you could do that.  I don’t agree with the [U.S. Geological Survey] that there’s 86 billion barrels of oil off the East and West coasts of the United States.  Those guys work on that a lot more than I do, so I’m not gonna say it’s a ridiculous number, I just don’t agree with it.11

Pickens’ unsupported assertion wasn’t questioned by a single member of the Committee.

As Pickens says, world oil production has fallen from its high in 2005.  But we should not conclude by this that oil reserves have peaked.  In fact, much of the fall in production since 2005 resulted from the affairs of men rather than dry wells, or, as British Petroleum CEO Tony Hayward recently put it, the problems “are above ground, not below it.”12

Among those problems are:

  • OPEC’s decision not to develop new oil production capacity over the last two decades.  In 2007, National Geographic quoted oil expert Maugeri, who noted that OPEC, frustrated by low oil prices, “continually [said], if you don’t ensure markets for new capacity, we won’t spend money [on development].  And sooner or later, if we don’t spend money, the current capacity will be overloaded, and a crash will come.  Now the production crash has come.”13

  • Violent upheaval in Nigeria in 2007, leading to attacks on oil facilities and reducing output by 200,000 barrels per day.14   

  • Stalled or falling oil production in Russia, Norway and Mexico in 2008 for a “variety of reasons, including… nationalistic policies that restrict foreign investments,” according to Jad Mouawad of the International Herald Tribune.15 

It is in the midst of such problems that Pickens said before the Senate, “we’re gonna be brought to our knees, and there’s no reason to believe that the people with the oil are going to bring the price down… and they do not have as much oil as they tell us they do.  It isn’t there.”16

Or is it?

Significant new oil discoveries in recent years suggest that considerable oil reserves may remain.  Brazil has found an estimated 41 billion barrels of oil off its coast since 2006, which has transformed the long-time oil importer into an exporter.17  In the same period, three oil companies found a reserve in the Gulf of Mexico that could hold 15 billion barrels.18

More discoveries are continually made, usually categorized as “conventional” oil.  According to the U.S. Department of Energy:

Over 95 percent of current world oil production is of relatively light oil, often referred to as ‘conventional oil’… the definition of conventional oil… includes onshore and shallow offshore light oil; it can also include light oil from deepwater offshore oil fields, natural gas liquids, arctic oil, and/or refinery gains, etc.19

Although conventional oil has long been produced, there are still untapped reserves available.  For example, the Energy Information Administration estimates there are 100 billion barrels of undiscovered oil in Iraq – undiscovered because Saddam’s regime pursued minimal exploration.20  While approximately 1,000,000 oil wells have been drilled in Texas, only about 2,000 have been drilled in Iraq.21

The Minerals Management Service of the U.S. Department of the Interior estimates that 86 billion barrels of oil could be located off of America’s coasts, in the Outer Continental Shelf.22

Because conventional oil is relatively cheap to refine into gasoline and other fuels, to date “unconventional oil” supplies have hardly been tapped.  But new technologies, combined with higher oil prices, are making unconventional oil production feasible.23  Unconventional oil reserves in North America are significant.  According to the U.S. Department of Energy, “the world’s conventional oil resources total 2.7 trillion barrels while North America’s unconventional resources total 3.7 trillion barrels.”24

The Council on Foreign Relations notes that “Canada’s oil sands, once deemed too expensive to distill, are currently extracted from in growing quantities.  Canada increased production by over 430,000 [barrels per day] between 2000 and 2006, and is expected to add another 300,000 [barrels per day] by 2008.”25  Oil sand is composed of a tar-like substance called bitumen, which can be refined into gasoline.26  The U.S. Department of Energy estimates that there is enough economically-accessible bitumen in Canada to provide 175 billion barrels of oil.27  It also forecasts that our northern neighbor will produce about four million barrels per day from oil sand by 2020.28

World oil supplies could also be increased through the production of oil from shale.  Shale is a sedimentary rock that contains a material called kerogen.  When kerogen is heated, it releases a liquid that is easily refined into oil.29  The U.S. Geological Survey estimates that shale in the Green River Formation of Colorado, Wyoming and Utah alone could yield one trillion barrels of oil, an amount equal to the world’s total consumption of oil since production began in 1859.30

The RAND Corporation estimates that the Green River Formation could provide 25 percent of America’s current oil needs for 400 years.31  Because oil shale is a dense and rich resource, relatively small production sites with limited environmental impacts can still yield enormous quantities of oil.  According to the U.S. Department of Energy, 15 billion barrels could be produced over 40 years from a plot as small as 23 square miles (out of the 17,000 square miles in the Green River Formation).32

America is not producing oil shale, or even readying production facilities, in part because of “above ground” obstacles.  The federal government owns most of the Green River Formation, but the Bureau of Land Management is prohibited from offering any leases for oil shale production due to an amendment that was added to the 2007 Interior Department appropriations bill.33  Representative Mark Udall (D-CO), the amendment’s chief sponsor, justified the legislation by claiming that oil companies were not yet ready to produce from shale. 

Years ago, Udall would have been correct.  Oil shale production was not economically feasible because operating costs were too high relative to the market price of oil.  But technological advancements and high oil prices have combined to change that.

The RAND corporation estimates that crude oil prices need to be $70-$95 per barrel to make oil shale production profitable.34  World oil prices have been within this range or above without interruption since the first week of September 2007.35  As the technology for oil extraction improves, the costs will continue to decline. 

One technology that shows promise is Royal Dutch Shell’s ‘in-situ’ process, which heats shale while it is still in the ground to collect oil, saving the costly process of moving rock.36  According to the RAND Corporation, the in-situ process, if it is successfully developed, will be economically-feasible when oil is $25 per barrel oil or more.

While Congress keeps America’s own natural resources off limits, Estonia, China and Brazil are developing their own small but thriving shale industries.37  Royal Dutch Shell signed shale development agreements with China’s Jilin Province in 2005.38

Pickens’ evaluation that oil “is getting more expensive to produce [and] harder to find” is also in question.  It is true that, as the most accessible sources of oil are depleted, upward pressure is placed on production costs because there is a shift to less accessible sources.  But there is also a downward pressure on the costs of conventional and unconventional oil production due to technological advances.39  That downward pressure is the reason Maugeri gives, as reported by National Geographic, for why “the cost to find and develop oil… dropped… from U.S. $21 per barrel of oil to under $6” between the late 1970s and late 1990s.40 

Since 2001, production costs have started to climb again, in part due to congressional limits on production from new sources. 41  As the most easily-accessible oil in a reserve is depleted, production shifts to less accessible oil in the increasingly-depleted site, or it shifts to new, previously-untapped reserves.42  Because government has limited the ability of producers in the United States to shift to economically-attractive new sites, production costs have risen more than otherwise necessary.

For American producers, the effect is most drastic offshore, where the total cost of finding, developing and producing oil skyrocketed from about $15 to $70 per barrel between 2003 and 2007.43  The recent cost increase for American producers is not a result of worldwide oil depletion, but rather of individual wells drying up.  What American oil producers are experiencing is the result of Congressional policy.  Something similar, though less dramatic, has been occurring in other parts of the world.44  Rising production costs in recent years do not prove Pickens’ assertion that “that cheap and easy oil is gone,” or refute the fact that technological advancement places a significant downward pressure on oil prices.  Rather, they reinforce the call for lifting bans on oil production from America’s richest resources.

Technological advances also are worthy of note.  One new technology with great potential is horizontal drilling.  Traditional oil wells are drilled vertically, which renders production inefficient in certain regions.  Oil is generally dispersed through grains of porous rock.45  It can travel through that rock, but only over millions of years.  Therefore, an oil well has to tap directly into an oil reservoir.46  Sometimes, those reservoirs are small; a drill might pierce 5,000 feet of rock only to find an oil well 20 feet deep. 47  Once that well dries up, a new well has to be drilled to reach another oil reservoir close by.  But horizontal drilling allows oil producers to replace dozens of wells with only two or three.48 

According to the “A Crude Story” website of the Department of Geology and Geophysics at the University of Wisconsin, horizontal drilling technology not only cheapens oil production, but also lessens environmental impact by reducing the “area damaged by drilling operations.  At sea, it allows drilling many wells from a single platform…  The record [horizontal well] is a long-haul monster that wanders almost 7 miles, on the coast of southern England in the Wytch Farm oil field.”49

Horizontal drilling boosts our so-called ”proven reserves. ”  Professor Bill Kovarik of Radford University explains:

The economics of petroleum are as important as geology in coming up with reserve estimates since a proven reserve is one that can be developed economically.  This is natural inside an industry.  Investors need to know just how easy the oil will be to find and lift from the ground.  They want to know how light and pure the oil is, how much it will cost to refine, how close the oil is to the marketplace.  Oil reserves that fall below a standard index of affordability are not developed because no one wants to lose the money it takes to develop them.  And undeveloped reserves are not listed as proven reserves.50

The United States also has the option of producing oil from coal.  As the U.S. Department of Energy notes:

Coal is one of the true measures of the energy strength of the United States.  One quarter of the world’s coal reserves are found within the United States, and the energy content of the nation’s coal resources exceeds that of all the world’s known recoverable oil.51

Through liquefaction, coal can be transformed into synthetic oil for $40-46 per barrel.52  Compared to other means of oil production, coal liquefaction is still expensive.  But with a barrel of oil selling for $ 105.46 as of this writing,53 the cost of coal liquefaction is not so extravagant.54


The Nuclear Option

Pickens told a USA Today reporter, “Try everything.  Do everything.  Nuclear.  Biomass.  Coal.  Solar. You name it.  I support them all… But there’s only one energy source that can dramatically reduce the amount of oil we have to import each year, and that’s [natural] gas.”55  The French might disagree; 80 percent of their electricity is generated by nuclear power.56  America itself generates 20 percent of its electricity from nuclear power.57

Although the word “ nuclear” causes anxiety for many, nuclear power is in fact very safe.  Today’s nuclear power plants are built to withstand a direct impact from a Boeing 767 airliner, and no American has ever died from nuclear power plant radiation.58

Furthermore, nuclear power plants are environmentally sound because they emit no carbon dioxide, sulfur dioxide or nitrogen oxides (though relatively negligible emissions are created in the mining of uranium).59  In addition, nuclear power plants create very little waste.  If the average American used nuclear power exclusively for his energy needs, his spent nuclear waste over a lifetime would be small enough to fit in a soda can.60

Nuclear power is also far cheaper than wind power.  According to the Nuclear Energy Institute, the nuclear power industry’s policy organization, nuclear power plants “are the lowest-cost producer of baseload electricity.  The average production cost of 1.76 cents per kilowatt-hour includes the costs of operating and maintaining the plant, purchasing fuel and paying for the management of used fuel.”61

Nuclear power is affordable because one tonne of uranium in a light water reactor yields energy equivalent to 10,000 to 16,000 tonnes of oil, according to the Energy Information Administration.62

Wind power, by comparison, costs several times more than nuclear power at about five cents per kilowatt-hour after government subsidies and incentives.63  And while the U.S. Department of Energy estimates that America would have to build 100,000 windmills to produce 20 percent of its electricity, only 103 nuclear power plants do the same already.64  The estimate is found in a recent report titled “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” which Pickens himself frequently cites, and which is part of President Bush’s “ Advanced Energy Initiative.”65   It notes that about 50,000 square kilometers of land would be necessary for the number of windmills that Pickens suggests be built.66  Building 103 more nuclear power plants would require far less land than 100,000 windmills, and would also avoid shortages of the fiberglass, resin and permanent magnets necessary for windmill construction.67

Generating wind power has negative environmental impacts.  The U.S. Department of Energy notes possible harm to grassland mammals and birds.68   As The Union newspaper of Grass Valley, California (near Sacramento) reported in March:

Long before wind turbines sprouted on Altamont Pass, it was home to the highest density of golden eagles in the world and their major breeding area in the United States.  Almost as soon as the first turbine started rotating, the bird carcasses started piling up: Golden eagles, burrowing owls, red-tailed hawks, other raptors, western meadowlarks and migrating songbirds.  Raptors searching for prey such as ground squirrels and gophers will glide over the ground at low height, unaware of the rapidly moving tips of the turbine blades…  Burrowing owl mortality suffered the greatest increase – more than 300 percent – and the overall raptor deaths almost doubled.69

Another disadvantage of wind power is the nature of wind.  Wind conditions on any given day are dependent on the weather, which means they are inconsistent and unpredictable.  According to Cambridge Energy Research Associates, “wind power is least available between June and September, the peak months for electricity consumption.”70  Nuclear power production is independent of weather conditions.

No new nuclear power plants have been built in several decades, but, according to the Nuclear Energy Institute, “17 companies and consortia are exploring the licensing and financing issues associated with” building new plants.71

With public support and government permission, nuclear power plants can start operating in about ten years.72  Pickens believes that more nuclear power plants will someday be built, but that America’s energy problems are too immediate to wait.73  However, Pickens expects his own plan to take ten years.74

Wind is a viable energy source for America, and perhaps should comprise a greater share of our energy portfolio than it does at present.  But given the challenges inherent in using wind for 20 percent of our electricity, a cost-effective and environmentally-friendly reconstruction of America’s energy infrastructure should include nuclear power as a major component.


Natural Gas Vehicles: Bad Idea

Converting a large number of American vehicles to natural gas use is key to the Pickens Plan’s ability to reduce U.S. dependence on foreign oil.  But altering how America uses its energy is not a simple prospect.

At a July 22 hearing convened by the Senate Homeland Security and Government Affairs Committee, Gal Luft, executive director of the Institute for the Analysis of Global Security, cast doubt on any notion that the government can easily alter how energy is used in America.

“Our energy system is not a Lego,” Luft said. “You don't take one cube and replace it with another.  ...Nothing guarantees that [wind power] will displace natural gas.  It could displace coal. It could displace solar.  ...How do you control what the wind will displace?”75

Noting that Russia and the Persian Gulf States, including Iran, control most of the world’s natural gas reserves, Luft said, “shifting our transportation sector from oil to natural gas is like jumping from the frying pan to the fire.  This is a spectacular [sic] bad idea. ... We don't want to give at this point in time a gift to Iran.”76 

Because natural gas production in America is increasingly part of a global market, the stability of its price can be upset by decreases in production in hostile nations such as Iran.  Therefore, reliance on natural gas may carry some of the same risk of oil dependency.

Pickens has glossed over the disadvantages of natural gas vehicles, saying they “combine top performance with low emissions.  The natural gas Honda Civic GX is rated as the cleanest production vehicle in the world.”77  But contrary to Pickens’ assertions, natural gas vehicles suffer a performance disadvantage and require sacrifices of cash and functionality. 

The conversion of a Civic from gasoline to natural gas adds about 200 pounds of weight to the vehicle, cuts trunk space in half and drains about 20 percent of the engine’s power.78  While a gasoline-powered Honda Civic DX sprints from 0-60 in about 7.7 seconds, the Civic GX takes about 10 seconds.79  More important, the GX costs a stunning 64 percent more than the standard model, or about $24,590 for the compact sedan.80

Furthermore, natural gas tanks take 20 hours to fill from a home fueling station, which costs about $5000 to purchase and install.81  A 20-hour fill-up gives the GX a range of 250 miles, but an overnight fill-up only yields 100 miles of range.82  100 miles is not sufficient for many commuters.  Commercial refueling stations can fill a natural gas vehicle in only a few minutes more than it takes to fill gasoline-powered vehicles.83  However, a massive retooling of America’s infrastructure would be necessary to build sufficient commercial filling stations to make natural gas vehicles feasible for long drives.

Natural gas vehicles are practical for a number of applications, such as bus and corporate fleets, due to savings that accumulate from increased fuel efficiency.  But for most consumers, technological and infrastructure advances are required before natural gas vehicles become a viable alternative to gasoline vehicles.


What Does Pickens Want From Uncle Sam?

Absent from T. Boone Pickens’ recent testimonies, from his interviews, and from the Pickens Plan website is a consistent platform of detailed recommendations to the federal government.  An inquiry for clarification from The National Center for Public Policy Research to the Pickens Plan organization is as of yet unanswered.84

Some of Pickens’ assertions in support of wind power imply that minimal federal intervention would be necessary to encourage the switch to windmills.  When Senator Jeff Bingaman (D-NM) asked Pickens during his Senate testimony what government action Pickens recommends, for example, Pickens replied that investment is “going to go to the cheapest source of power… wind will be cheaper than anything else.”85

If wind will be cheaper than any other source of electricity, then no government aid should be necessary because investors will be attracted to the most cost-efficient means of production. 

Yet, on some occasions, Pickens has suggested that government aid will be required for his plan to work. 

Asked by Senator Gordon Smith (R-OR) if private capital will be able to fund the investment in wind energy that Pickens seeks, Pickens replied, “I think private capital can do it if you have the PTC.”86 

PTC stands for Production Tax Credit, or the federal government’s assistance of 1.9 cents per kilowatt-hour for the first ten years of a wind power facility’s operations.87  The PTC covers a significant portion of the average cost of wind energy, about five cents per kilowatt-hour after all government aid, and is set to expire at the end of 2008.88

Quantifying how effective the PTC has been in spurring investment is difficult.  We do know that wind power investment has risen dramatically in recent years.  A May 2008 study by the U.S. Department of Energy found:

...U.S. wind power capacity increased by 46 percent in 2007, with $9 billion invested in U.S. wind plants alone, making the U.S. the fastest-growing wind power market in the world for the third straight year.  The report also showed that wind is on a path to becoming a significant contributor to the U.S. power mix – wind projects accounted for 35 percent of all new U.S. electric generating capacity in 2007, and transmission facilities capable of generating a total of over 200 GW of wind power are in the early stages of development throughout the nation.89

But the rise in wind power investment is to some extent the product of rising energy prices rather than government aid, the latter of which was available for years before the stellar rise in wind investment.  Given the strong climb in wind power investment over the last three years, it is not clear that further government aid is necessary. 

Pickens, however, believes the federal government should not only offer more aid to wind power development, but also encourage the use of compressed natural gas (CNG) vehicles.  A July 11 USA Today article by Dan Reed describes Pickens’ views this way:

Washington, Pickens adds, can encourage the move to natural-gas-powered vehicles by providing modest economic incentives for fuel retailers to invest in CNG pumps at their stations, for automakers to build CNG-powered cars and for individuals to convert their existing vehicles to CNG use.  And it should continue to provide tax incentives for another 10 years to encourage wind energy’s rapid development as part of an overall plan to wean the nation from foreign oil.90

By themselves, “modest economic incentives” for natural gas use in vehicles and a continuation of the PTC for ten years hardly appear to warrant the massive campaign Pickens has launched.  But Pickens seeks more than subsidies.


Eminent Domain

Asked by Senator John Barrasso (R-WY) about the potential obstacles to large-scale wind-power generation posed by high construction costs and land access problems, Pickens replied that they could be overcome by going “the route that Eisenhower used with the interstate highway system.”91 

Of the 1956 Federal-Aid Highway Act, President Dwight Eisenhower said in 1963, “More than any single action by the government since the end of the war, this one would change the face of America.”92

The Act was indeed a sweeping piece of legislation, but it also carried a high cost.  In 1956, the highway system was projected to cost $27 billion.93  By the time it was complete, the costs ran more than $114 billion.94 But there were other costs as well.

Spanning more than 46,000 miles,95 the interstate highway system is the largest federal public works project in United States history.  Because so much of the system was built where no roads had previously existed, close to 1.8 million acres of rights-of-way had to be purchased for its construction,96 sometimes against the will of owners, through the exercise of eminent domain powers.

Pickens recently told an editorial board meeting of the San Diego Union-Tribune that he envisions that government would need to use eminent domain to take some of the land needed to lay the wind power transmission lines necessary for his plan.97    

When land was needed for the interstate highway system, those with political connections tended to make out fairly well.

In Indiana, for example, speculators bought land in the proposed interstate corridors and then sold it to the state for what The Washington Post and Times Herald (now The Washington Post) called “preposterous profits.”98

Those without strong political connections didn’t fare as well.

According to historian Raymond A. Mohl, by the early 1960s, 33,000 people were being forced from their homes each year to make way for interstate construction.  By 1969, 62,000 housing units were being destroyed per year – dislocating as many as 200,000 people annually.99

Most of those displaced – perhaps not surprisingly – were minorities.  Interstates were frequently routed through black neighborhoods in urban areas as a means of eliminating “slum” housing and advancing urban renewal projects. 

In San Francisco, for example, the Embarcadero Freeway was routed through a blighted area that included the historic Ferry Building (which had once served as San Francisco’s transportation hub but had been largely abandoned) and a site that had once served as a farmer’s market.  After completion of the first section of the freeway in 1959, which the San Francisco Chronicle called “a crime that cannot be prettied up,” the San Francisco Board of Supervisors passed a resolution against any further freeway construction.  The “forced uprooting and relocation of individuals” was among the key reasons cited for the moratorium.100

Homeowners forced from their homes in blighted areas typically faced unusual difficulties in getting fair market value for their homes because local governments, eager to clear the way for interstate construction and for redevelopment plans, would condemn housing in the interstate’s path in advance, which depressed home values.  Renters forced to move fared even worse, often receiving no assistance at all.101 

The massive, forced relocation of blacks in Newark and Detroit – bluntly referred to by some local residents as “negro removals” – was an important factor in the riots that occurred in those cities in July 1967.102

Yet, Pickens sees “the route that Eisenhower used” as a model for increasing U.S. wind-generated electricity. 

Pickens is correct that a transmission superhighway akin to the interstate highway system is exactly what would be required to meet his goal. 

According to the U.S. Department of Energy report, “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to the U.S. Electricity Supply,” 12,650 additional miles of power lines would be needed for wind to meet 20  percent of the country’s electricity needs by 2030.103  The construction, estimated to cost $20 billion, is necessary because electricity is in highest demand in areas far away from the wind corridor of the Midwest.104

Eminent domain would almost certainly be used to overcome resistance of landowners to the new transmission lines cutting through their property.

The construction of 100,000 windmills across 50,000 square kilometers of land – the number the Department of Energy estimates would be needed to meet the 20  percent target – could also require eminent domain takings. 

The Pickens Plan website attempts to assuage property owners’ concerns, claiming, “wind turbines don’t interfere with farming and grazing, so they don't threaten food production or existing local economies” and says that windmills are an economic gift to “small towns in middle-America” with “a shortage of good jobs.”105  But it makes no mention of how the enormous wind turbines could alter viewsheds, lowering property values, a likely key concern of locals.106

In his testimony before the Senate Commerce and Energy Committee, Pickens presented a map of the United States showing a massive wind corridor stretching from North Dakota and Montana down through Texas.107  Presuming to speak for millions of Americans, Pickens said, “It’s perfect as far as the people in that area.  They want the wind, it’s not like on the coast, where you have problems sighting those turbines.”108

Pickens was referring to the many coastal residents who prefer not to stare at vast arrays of 260 foot-tall windmills, offshore or onshore.109  Famed historian and author David McCullough referred to a windmill project planned for Cape Cod as “visual pollution.”110  Senator Ted Kennedy (D-MA) has vigorously opposed the same project despite his environmentalist leanings.111  In Pickens’ view, similar opposition in the Midwest would be minimal.


T. Boone Is Already Invested In The Pickens Plan

T. Boone Pickens earned his massive wealth in the energy industry and today chairs BP Capital Management, a hedge fund that invests in energy firms, including both natural gas and wind energy. 

His firm, Mesa Power, plans to invest ten billion dollars in what will be the world’s largest wind farm, located near Pampa, Texas.  The Pickens Plan website claims that the Pampa Wind Project, when completed, will have 4,000 megawatts of capacity.112  Reuters reports that the facility will eventually power 1.3 million homes.113

The Pampa Wind Project continuously operating at its maximum capacity would produce 35.04 million megawatt-hours of electric power, or 35.04 billion kilowatt-hours of power, per year.  But it won’t operate continuously.  According to the Energy Information Agency, the capacity factor for wind turbines ranges between 25  percent and 45 percent,114 meaning that actual power generation at the Pickens wind farm would likely run between 8.76 billion and 15.77 billion kilowatt-hours annually.   

Pickens has been lobbying to have the wind power subsidy, the Production Tax Credit (PTC), extended until 2018.  If the subsidy is extended at its current level of aid and a new ten-year clock starts with completion of new phases of the Pampa Wind Project, Pickens’ firm stands to receive between $1.66 billion and about $3 billion in PTC payments alone over ten years, a significant portion of its original investment.  There might be further subsidies available to Pickens from local and state authorities.

But Pickens also wants federal aid to connect his wind farm to the national power grid, which will cost untold millions and likely require the use of eminent domain.

If Pickens’ lobbying is successful, it will not be the first time he has benefited from eminent domain.  He noted in testimony before the Senate Energy and Natural Resources Committee that, in the past, Mesa Power was “permitted to use the power of eminent domain, subject to oversight by public authorities and the courts, to obtain rights of way for transportation corridors.”115

Mesa Power may have used eminent domain under public oversight, but, in parts of Texas, employees of Pickens are the public oversight. 

According to Susan Berfield of Business Week, Pickens owns the rights to more water than any other American through his firm Mesa Water, “and is looking to control even more.”116  He hopes to sell about 65 billion gallons of water to Dallas every year, but must first construct a 250-mile pipeline through 650 private properties to do so.117  If he fails to gain access through just one of those properties, the entire pipeline will fail.

When the Texas Legislature convened in January 2007, Mesa Water hired lobbyist J.E. Buster Brown.118  Brown helped secure an amendment to a piece of water legislation that allows “a water-supply district to transmit alternative energy and transport water in a single corridor, or right-of-way.”119  If Pickens builds a pipeline to deliver water, he can use it to deliver energy from windmills.

Berfield summarizes for Business Week what happened next: “Pickens still needed the power of eminent domain if he was going to build his pipeline and wind-power lines across private land.  And by happy coincidence, the legislators passed a smaller bill that made that all the easier.”120

The bill eased the requirements for creating a water district.121  Originally, five registered voters living within the water district had to be elected as its supervisors.122  But now, the five voters only needed to own land there.123 

Pickens sold eight acres of his ranch to five of his employees that summer.  Mesa Water then filed a petition “to create an eight-acre water-supply district with those five as the directors and sole members.”124  The water district was created, so Pickens’ employees can now use eminent domain proceedings and issue tax-exempt municipal bonds.  In April 2008, Mesa Water sent letters that informed landowners in the area that their lands could be condemned by eminent domain if they refuse to sell.125

The same could happen across America if the Pickens Plan is adopted.

Pickens’ hedge fund, BP Capital Management, is also poised to gain from government investment in wind power and natural gas.  Nearly 72 percent of the fund’s portfolio is invested in corporations that are involved in energy, and most of these firms are invested in natural gas or wind power.  These energy holdings comprise 60 percent of the value of BP Capital Management’s portfolio.126  Its two largest holdings are Occidental Petroleum and Suncor Energy Inc., which together represent over 30  percent of the fund’s portfolio (or $388 million).  Both have substantial natural gas assets.127  Suncor, for example, produced over 196 million cubic feet of natural gas per day in 2007.128   Suncor is investing in wind power and already has four modest projects operating in Canada that together generate 147 megawatts of power.129

Pickens would also benefit from federal aid for natural gas vehicles.  According to Fox News, he “owns about 90 of the roughly 500 publicly available natural gas stations with another of his companies, Clean Energy.”130

Pickens may also be taking extraordinary steps to boost the number of natural gas vehicles in use to boost his profits.  Earlier this year, Pickens’ Clean Energy contributed $150,000 to help pass Proposition S,131 a ballot initiative championed by Los Angeles Mayor Antonio Villaraigosa, to extend the city’s telephone tax to other communications vehicles, including the Internet, cell phones and yet-to-be-developed technologies.  The city had already extended the tax to wireless telephone calls, but California courts ruled the tax illegal.132

Why would Pickens, a self-identified fiscal conservative, support a tax increase such as this?  A natural gas opponent told The Los Angeles Times she believes the donation may have been made to expedite the Port of Los Angeles’s plan to convert up to 5,300 diesel trucks to liquid natural gas.  The program is overseen by appointees of the mayor and, when completed, would permit Clean Energy to sell an additional 100 million gallons of natural gas per year.133 

Pickens is also spending $3.25 million on Proposition 10, California’s Alternative Fuels Initiative, which, if adopted, would authorize payments of up to $50,000 to state residents purchasing natural gas vehicles.134  Again, Pickens stands to profit. 

Clean Energy recently received a $3.6 million grant from the Mobile Source Air Pollution Reduction Review Committee and the South Coast Air Quality Management District to help “defray” the costs of building nine new natural gas fueling stations in Southern California.135

If Congress goes beyond the Pickens Plan, the Texas billionaire’s profits could rise even more.  He encouraged Congress to do so.  Speaking about what percentage of America’s electricity could be generated by wind power at a Senate hearing on July 22, Pickens said, “If you wanted to go beyond 22 percent you could go to 40, 60, 80, whatever you want because that resource is unlimited.”136
           
Pickens apparently realizes that many may doubt his sincerity and good intentions, given his significant investments in natural gas and wind power.

“This is about saving our country from… ruination,” Pickens insists.  “I’m 80 years old and have $4 billion.  I don’t need any more money.”137 

Maybe he doesn’t, but he’ll make a great deal more money, much of it through government subsidies, if his plan is adopted.

If the Pickens Plan is really all about doing what is best for the country and not for himself, Pickens could demonstrate his sincerity by renouncing the government subsidies he is lobbying for.

That should be easy for a man who says he doesn’t need any more money.


-Reece A. Epstein and David A. Ridenour are the research associate and vice president, respectively, of the National Center for Public Policy Research.

 


Footnotes:

1  “The Plan,” Pickens Plan, available at http://www.pickensplan.com/theplan/ as of July 15, 2008.

2  Ibid.

3  Ibid.

4  David Lazarus, “T. Boone Pickens Could Gain From His Energy Plan, But So Might We,” Los Angeles Times, July 9, 2008, available at http://www.latimes.com/business/la-fi-lazarus9-2008jul09,0,7890733.column as of July 16, 2008.

5  “The Plan,” Pickens Plan, available at http://www.pickensplan.com/theplan/ as of July 10, 2008.

6  Brian Handwerk, “Cheap-Oil Era is Far From Over, Analyst Says,” National Geographic, May 20, 2004, available at http://news.nationalgeographic.com/news/2004/05/0520_040520_oil.html as of July 10, 2008.

7  Ibid.

8  “Interview with Leonardo Maugeri,” Eni S.p.A. company website, 2008, available at http://www.eni.it/it_IT/eni_award_2008_en/media_maugeri.shtml as of July 30, 2008.

9  Brian Handwerk, “Cheap-Oil Era is Far From Over, Analyst Says,” National Geographic, May 20, 2004, available at http://news.nationalgeographic.com/news/2004/05/0520_040520_oil.html as of July 10, 2008

10 Ibid.

11  “C-Span Senate Q&A,” Pickens Plan, June 17, 2008, available at http://www.pickensplan.com/media/ as of July 10, 2008.

12  “Oil Breaks New Ground Above $143,” British Broadcasting Corporation, June 30, 2008, available at http://news.bbc.co.uk/2/hi/business/7480703.stm as of July 16, 2008.

13  Brian Handwerk, “Cheap Oil to Last, “Doomsday” Fears Overblown, Author Says,” National Geographic, February 14, 2007, available at http://news.nationalgeographic.com/news/2007/02/070214-cheap-gas.html as of July 23, 2008.

14  Peter Brookes, “The Niger Delta Blues,” The Heritage Foundation, May 23, 2007, available at http://www.heritage.org/Press/Commentary/ed052307a.cfm as of July 10, 2008.

15  Jad Mouawad, “Behind Record Oil Prices, Troubling Signs in Production,” International Herald Tribune, April 28. 2008, available at http://www.iht.com/articles/2008/04/28/business/oil.php as of July 16, 2008.

16  “C-Span Senate Q&A,” Pickens Plan, June 17, 2008, available at http://www.pickensplan.com/media/ as of July 10, 2008.

17  Bernd Radowitz, “Petrobras Reports Major Offshore Oil Find,” The Wall Street Journal, April 15, 2008, available at http://online.wsj.com/article/SB120822029261414745.html?mod=hps_us_whats_news&apl=y&r=904711 as of September 2, 2008.

18  Clifford Krauss, “Big Oil Find is Reported Deep in Gulf,” The New York Times, September 6, 2006, available at http://www.nytimes.com/2006/09/06/business/worldbusiness/06oil.html as of July 16, 2008.

19  Robert Hirsch, “Peaking of World Oil Production: Recent Forecasts,” U.S. Department of Energy, February 5, 2007, available at http://209.85.165.104/search?q=cache:V2NVQQZkMZgJ:www.netl.doe.gov/energy-analyses/pubs/Peaking%20of%20World%20Oil%20Production%20-%20Recent%20Forecasts%20-%20NETL%20Re.pdf+site:doe.gov+peak+oil&hl=en&ct=clnk&cd=6&gl=us&client=firefox-a as of July 16, 2008.

20  “Iraq: Oil and Economy,” U.S. Government Info, available at http://usgovinfo.about.com/library/weekly/aairaqioil.htm as of July 10, 2008.

21  Ibid.

22  Offshore Energy & Minerals Management (OEMM), Minerals Management Service, U.S. Department of the Interior, last updated August 1, 2008, available at http://www.mms.gov/offshore/ as of August 5, 2008.

23  Toni Johnson, “Non-OPEC Oil Production,” Council on Foreign Relations, last updated July 10, 2008, available at http://www.cfr.org/publication/14554/ as of July 16, 2008.

24  Harry Johnson, Peter Crawford, James Bunger, “Strategic Significance of America’s Oil Shale Resource (Vol. II),” Office of Deputy Assistant Secretary for Petroleum Reserves, Strategic Petroleum Reserves, U.S. Department of Energy, published March 2004, available at http://www.fossil.energy.gov/programs/reserves/npr/publications/npr_strategic_significancev2.pdf as of June 23, 2008.

25  Toni Johnson, “Non-OPEC Oil Production,” Council on Foreign Relations, last updated July 10, 2008, available at http://www.cfr.org/publication/14554/ as of July 16, 2008.

26  James Cox, “Canada Drips With Oil, But It’s Tough To Get At,” USA Today, September 7, 2004, available at http://www.usatoday.com/money/industries/energy/2004-09-07-oil-sands_x.htm as of July 16, 2008.

27  “Oil Sands,” U.S. Department of Energy, available at http://www.eia.doe.gov/oiaf/aeo/conf/stringham/stringham.ppt as of July 16, 2008.

28  Ibid.

29  James Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary Cecchine, “Oil Shale Development in the United States: Prospects and Policy Issues,” The RAND Corporation, published 2005, available at http://rand.org/pubs/monographs/2005/RAND_MG414.pdf as of September 2, 2008.

30  Shale in America: John Dyni, “Geology and Resources of Some World Oil-Shale Deposits,” U.S. Geological Survey, U.S. Department of the Interior, posted online June 2006, available at http://pubs.usgs.gov/sir/2005/5294/ as of June 23, 2008.

One-trillion barrels since 1859: Brad Reagan, “America @ $100/Barrel: How Long Will the Oil Last?,” Popular Mechanics, April 2008, available at http://www.popularmechanics.com/science/earth/4254875.html?page=2 as of September 2, 2008.

31  James Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary Cecchine, “Oil Shale Development in the United States: Prospects and Policy Issues,” The RAND Corporation, published 2005, available at http://rand.org/pubs/monographs/2005/RAND_MG414.pdf as of June 23, 2008.

32  Harry Johnson, Peter Crawford, James Bunger, “Strategic Significance of America’s Oil Shale Resource (Vol. II),” Office of Deputy Assistant Secretary for Petroleum Reserves, Strategic Petroleum Reserves, U.S. Department of Energy, published March 2004, available at http://www.fossil.energy.gov/programs/reserves/npr/publications/npr_strategic_significancev2.pdf as of June 23, 2008.

33  Suzanne Struglinski, “House Amends Oil-Shale Bill,” Desert Morning News, June 28, 2007, available at http://deseretnews.com/dn/view/0,1249,680194656,00.html as of June 23, 2008.

34  James Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary Cecchine, “Oil Shale Development in the United States: Prospects and Policy Issues,” The RAND Corporation, published 2005, available at http://rand.org/pubs/monographs/2005/RAND_MG414.pdf as of July 25, 2008.

35  “All Countries Spot Price FOB Weighted by Estimated Export Volume,” Energy Information Administration available at http://tonto.eia.doe.gov/dnav/pet/hist/wtotworldw.htm as of July 25, 2008.

36  James Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary Cecchine, “Oil Shale Development in the United States: Prospects and Policy Issues,” The RAND Corporation, published 2005, available at http://rand.org/pubs/monographs/2005/RAND_MG414.pdf as of June 23, 2008.

37  Stuart Smith, “Focus on Australian Shale Oil,” International Energy Agency, 2002, available at http://www.iea.org/textbase/work/2002/calgary/Smithdoc.pdf as of July 16, 2008.

38  “Jilin and Shell Sign Oil Agreement,” Shell China, January 9, 2005, available at http://www.shell.com/home/content/china-en/news_and_library/press_releases/2005/sure_jvc_0109.html as of July 24, 2008.

39  “The Plan,” Pickens Plan, available at http://www.pickensplan.com/theplan/ as of July 15, 2008.

40  Brian Handwerk, “Cheap-Oil Era is Far From Over, Analyst Says,” National Geographic, May 20, 2004, available at http://news.nationalgeographic.com/news/2004/05/0520_040520_oil.html as of September 2, 2008.

41  “Crude Oil Production,” Energy Information Administration, last updated January 2008, available at http://www.eia.doe.gov/neic/infosheets/crudeproduction.html as of September 2, 2008.

42  Bill Kovarik, “The Oil Reserve Fallacy: Proven Reserves Are Not A Measure of Future Supply,” Radford University, 2002, available at http://www.runet.edu/~wkovarik/oil/3unconventional.html as of September 2, 2008.

43  “Crude Oil Production,” Energy Information Administration, last updated January 2008, available at http://www.eia.doe.gov/neic/infosheets/crudeproduction.html as of September 2, 2008.

44  Ibid.

45  “A Crude Story,” Department of Geology and Geophysics, The University of Wisconsin, available at http://www.geology.wisc.edu/courses/g115/oil/4.html as of September 2, 2008.

46  Ibid.

47  Ibid.

48  Ibid.

49  Ibid.

50  Bill Kovarik, “The Oil Reserve Fallacy: Proven Reserves Are Not A Measure of Future Supply,” Radford University, 2002, available at http://www.runet.edu/~wkovarik/oil/3unconventional.html as of September 2, 2008.

51  “Coal,” U.S. Department of Energy, available at http://www.doe.gov/energysources/coal.htm as of September 2, 2008.

52  Eric Roston, “Coal is Back,” Time Magazine, October 23, 2005, available at http://www.time.com/time/business/article/0,8599,1122055,00.html as if July 10, 2008.

53  Julie Kollewe, “Oil Price Falls to Lowest Level Since April,” The Guardian, September 2, 2008, available at http://www.guardian.co.uk/business/2008/sep/02/oil.hurricanegustav?gusrc=rss&feed=networkfront as of September 2, 2008.

54  “The Plan,” Pickens Plan, available at http://www.pickensplan.com/theplan/ as of August 8, 2008.

55  Dan Reed, “Texas Oilman T. Boone Pickens Wants To Supplant Oil With Wind,” USA Today, July 8, 2008, available at http://www.usatoday.com/money/industries/energy/2008-07-08-t-boone-pickens-plan-wind-energy_N.htm as of September 2, 2008.

56  Roger Cohen, “America Needs France’s Atomic Anne,” The New York Times, January 24, 2008, available at http://www.nytimes.com/2008/01/24/opinion/24cohen.html?_r=3&oref=slogin&oref=slogin&oref=slogin as of September 2, 2008.

57  “Nuclear Power 2010,” U.S Department of Energy, available at http://www.ne.doe.gov/np2010/neNP2010a.html as of July 21, 2008.

58  Roger Cohen, “America Needs France’s Atomic Anne,” The New York Times, January 24, 2008, available at http://www.nytimes.com/2008/01/24/opinion/24cohen.html?_r=3&oref=slogin&oref=slogin&oref=slogin as of September 2, 2008.

59  “Clean Energy,” U.S. Environmental Protection Agency, available at http://www.epa.gov/cleanenergy/energy-and-you/affect/air-emissions.html as of July 23, 2008.

60  Ibid.

61 “Reliable and Affordable Energy,” Nuclear Energy Institute, available at http://www.nei.org/keyissues/reliableandaffordableenergy/ as of July 10, 2008.

62  “Thermal Energy Conversions of Nuclear Fuels,” Energy Information Administration, available at http://www.eia.doe.gov/cneaf/nuclear/page/uran_enrich_fuel/convert.html as of July 10, 2008.

63  “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” U.S. Department of Energy, May 2008, available at http://www1.eere.energy.gov/windandhydro/pdfs/41869.pdf as of July 10, 2008.

64  100,000 windmills: Ibid.

103 nuclear power plants: James Lake, “The Renaissance of Nuclear Energy,” E Journal USA, available at http://usinfo.state.gov/journals/ites/0706/ijee/lake.htm as of July 23, 2008.

65  “U.S Continues to Lead the World in Wind Power Growth,” U.S. Department of Energy, May 29, 2008, available at http://www.doe.gov/news/6286.htm as of July 17, 2008.

66  “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” U.S. Department of Energy, May 2008, available at http://www1.eere.energy.gov/windandhydro/pdfs/41869.pdf as of July 10, 2008.

67  Ibid.

68  Ibid.

69  “Windmills Increase Raptor Deaths,” The Union, March 6, 2008, available at http://www.theunion.com/article/20080306/TODAYSFEATURE/969201445/- as of September 2, 2008.

70  Loren Steffy, “Pickens’ Plan is Bold - Too Bad It Won’t Work,” Houston Chronicle, July 10, 2008, available at http://www.chron.com/disp/story.mpl/front/5882292.html as of July 17, 2008.

71  “Building New Nuclear Plants,” Nuclear Energy Institute, available at http://www.nei.org/keyissues/newnuclearplants/buildingnewnuclearplants/ as of July 21, 2008.

72  “Key Steps in Building a New Reactor,” Nuclear Energy Institute, February 2008, available at http://www.nei.org/resourcesandstats/documentlibrary/newplants/factsheet/key_steps_in_building_a_new_reactor/ as of July 21, 2008.

73  “Media,” Pickens Plan, available at http://www.pickensplan.com/media/?bcpid=1640183817&bclid=1641831862&bctid=1650060434 as of July 21, 2008.

74  “The Plan,” Pickens Plan, available at http://www.pickensplan.com/theplan/ as of July 10, 2008.

75  “T. Boone Pickens: U.S. Paying for Both Sides of Iraq War,” Fox News, July 22, 2008, available at http://www.foxnews.com/story/0,2933,387961,00.html as of July 22, 2008.

76  Ibid.

77  Ibid.

78  Jared Gall, “2007 Honda Civic GX – First Drive Review,” Car and Driver, March 2007, available at http://www.caranddriver.com/reviews/hot_lists/car_shopping/green_machines/2007_honda_civic_gx_first_drive_review as of July 17, 2008.

79  Ibid.

80  “Honda Civic Family,” Honda, available at http://automobiles.honda.com/civic/ as of July 21, 2008.

81  Jared Gall, “2007 Honda Civic GX – First Drive Review,” Car and Driver, March 2007, available at http://www.caranddriver.com/reviews/hot_lists/car_shopping/green_machines/2007_honda_civic_gx_first_drive_review as of July 17, 2008.

82  Ibid.

83  Ibid.

84  On July 10, 2008, Reece Epstein of the National Center for Public Policy Research sent the following email to the Pickens Plan organization, using an email address listed on its website:

To those whom it may concern,
I am writing an analysis of the Pickens Plan for The National Center for Public Policy Research on Capitol Hill, and while reviewing your website I came up with a few questions. Is there a person who might be able to answer the following?:
1. The website contains some very good analysis of America's energy picture, but is light on details about what ought to be asked of the government. Will subsidies and eminent domain takings be necessary? How much would those subsidies cost?
2. The website mentions a $1.2 trillion price tag. Does that figure include land purchases for wind farms?
3. How much land is required for the windfarms?
4. The mentions energy output of a single 3 megawatt turbine. What would such a turbine cost? How much revenue would the proposed windfarms take in on a yearly basis from the sale of electricity?
5. The website mentions that oil production peaked in 2005. Is that viewed as a result of dwindling supplies or other economic/geopolitical factors?
6. What kind of backup energy source would we utilize in case wind dies down on a given day?
Cordially, Reece Epstein

Epstein also left two voice messages with the Pickens organization on July 10. As of September 2, 2008, no response had been received.

85  “C-Span Senate Q&A,” Pickens Plan, June 17, 2008, available at http://www.pickensplan.com/media/ as of July 10, 2008.

86  Ibid.

87  “Renewable Energy Tax Credit Extended Again, but Risk of Boom-Bust Cycle in Wind Industry Continues,” Union of Concerned Scientists, February 14, 2007, available at http://www.ucsusa.org/clean_energy/clean_energy_policies/production-tax-credit-for-renewable-energy.html as of July 17, 2008.

88  Five cents per hour: “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” U.S. Department of Energy, May 2008, available at www1.eere.energy.gov/windandhydro/pdfs/41869.pdf as of July 10, 2008.

89  “U.S Continues to Lead the World in Wind Power Growth,” U.S. Department of Energy, May 29, 2008, available at http://www.doe.gov/news/6286.htm as of July 17, 2008.

90  Dan Reed, “Texas Oilman T. Boone Pickens Wants To Supplant Oil With Wind,” USA Today, July 8, 2008, available at http://www.usatoday.com/money/industries/energy/2008-07-08-t-boone-pickens-plan-wind-energy_N.htm as of September 2, 2008.

91  “C-Span Senate Q&A,” Pickens Plan, June 17, 2008, available at http://www.pickensplan.com/media/ as of July 10, 2008.

92  “Federal-Aid Highway Act of 1956: Creating the Interstate System,” NationalAtlas.gov, last updated April 29, 2008, available at http://www.nationalatlas.gov/articles/transportation/a_highway.html as of July 17, 2008.

93  “Interstate FAQ,” U.S. Department of Transportation: Federal Highway Administration, available at http://www.fhwa.dot.gov/interstate/faq.htm as of July 17, 2008.

94  Ibid.

95  “Mn/DOT Celebrated the Interstate Highway System’s 50th Anniversary,” Minnesota Department of Transportation, available at http://www.dot.state.mn.us/interstate50/50facts.html as of July 24, 2008.

96  “The Numbers Game: How it Works With the Interstate System,” FHWA News, June 1981 available at www.interstate50th.org/FHWAstats.pdf as of July 29, 2008.

97  Dean Calbreath, “Pickens Pitches Plans to Shift U.S. Away from Oil,” San Diego Union Tribune, July 25, 2008, available at http://www.signonsandiego.com/news/business/20080725-9999-1n25pickens.html as of July 30, 2008.

98  Richard F. Weingroff, “Essential to the National Interest,” Public Roads, Federal Highway Administration, U.S. Department of Transportation , March /April 2006, available as of July 29, 2008 at http://www.tfhrc.gov/pubrds/06mar/07.htm.

99  Raymond A. Mohl, “The Interstates and the Cities: Highways, Housing and the Freeway Revolt,” University of Alabama, 2002 available at http://www.prrac.org/pdf/mohl.pdf as of July 29, 2008.

100  Richard F. Weingroff, “Essential to the National Interest,” Public Roads, Federal Highway Administration, U.S. Department of Transportation , March /April 2006, available as of July 29, 2008 at http://www.tfhrc.gov/pubrds/06mar/07.htm.

101  Raymond A. Mohl, “The Interstates and the Cities: Highways, Housing and the Freeway Revolt,” University of Alabama, 2002 available at http://www.prrac.org/pdf/mohl.pdf as of July 29, 2008.

102  Dr. Max Herman, “Ethnic Succession and Urban Unrest in Newark and Detroit During the Summer of 1967,” Rutgers University, July 2002 available at http://209.85.215.104/search?q=cache:sG20iXM3kYQJ:www.cornwall.rutgers.edu/pdf/Herman-July%25202002-Report.pdf+%22detroit+riot%22+and+%22highway%22&hl=en&ct=clnk&cd=4&gl=us as of July 29, 2008.

103  “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” U.S. Department of Energy, May 2008, available at www1.eere.energy.gov/windandhydro/pdfs/41869.pdf as of July 10, 2008.

104  Ibid.  It is possible that the figures in the report are skewed favorably towards the advancement of wind power.  The American Wind Energy Association and, according to the report itself, “many wind energy organizations” contributed to the preparation of the U.S. Department of Energy’s report.

105  “The Plan,” Pickens Plan, available at http://www.pickensplan.com/theplan/ as of July 15, 2008.

106  “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” U.S. Department of Energy, May 2008, available at www1.eere.energy.gov/windandhydro/pdfs/41869.pdf as of July 10, 2008.

107  “C-Span Senate Q&A,” Pickens Plan, June 17, 2008, available at http://www.pickensplan.com/media/ as of July 10, 2008.

108  Ibid.

109  “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply,” U.S. Department of Energy, May 2008, available at www1.eere.energy.gov/windandhydro/pdfs/41869.pdf as of July 10, 2008.

110  Wendy Williams and Robert Whitcomb, “Cape Wind: Money, Celebrity, Class, Politics, and the Battle for America’s Energy Future on Nantucket Sound,” New York: Public Affairs, 2007.

111  Ibid.

112  “The Plan,” Pickens Plan, available at http://www.pickensplan.com/theplan/ as of July 10, 2008.

113  “Mesa Power Places World’s Largest Single-Site Wind Turbine Purchase Order,” Reuters, May 15, 2008, available at http://www.reuters.com/article/pressRelease/idUS155971+15-May-2008+PRN20080515 as of August 5, 2008.

114  Telephone interview with Chris Namovicz, energy forecasting expert, U.S. Energy Information Agency, by Ryan Balis of the National Center for Public Policy Research, July 30, 2008.

115  “Testimony of Mr. T. Boone Pickens before the Senate Energy and Natural Resources Committee,” United States Senate, June 17, 2008, available at http://64.233.169.104/search?q=cache:6gavx5uBqJ4J:energy.senate.gov/public/_files/ PickensTestimony061708.doc+%22mesa+power%22+pampa+site:.gov&hl=en&ct=clnk&cd=3&gl=us&client=firefox-a as of August 4, 2008.

116  Susan Berfield, “There Will Be Water,” Business Week, June 12, 2008, available at http://www.businessweek.com/magazine/content/08_25/b4089040017753.htm as of August 5, 2008.

117  Ibid.

118  Ibid.

119  Ibid.

120  Ibid.

121  Ibid.

122  Ibid.

123  Ibid.

124  Ibid.

125  Ibid.

126  J3 Information Services Group available at http://www.j3sg.com/Reports/Stock-Insider/Generate-Institution-Portfolio.php?institutionid=5034&DV=ye as of July 30, 2008.

127  Ibid.

128  “Our Business: Natural Gas,” Suncor Energy available at http://www.suncor.com/default.aspx?ID=53 as of July 30, 2008.

129  “Our Business: Renewable Energy,” Suncor Energy, available at http://www.suncor.com/default.aspx?ID=1091 as of July 30, 2008.

130  “T. Boone Pickens: U.S. Paying for Both Sides of Iraq War,” Fox News, July 22, 2008, available at http://www.foxnews.com/story/0,2933,387961,00.html as of July 22, 2008.

131  David Zahniser, “Texas Oilman Aids L.A. Phone Tax Effort,” February 1, 2008, Los Angeles Times, available at http://articles.latimes.com/2008/feb/01/local/me-pickens1 as of July 25, 2008.

132  Tibby Rothman, “Prop. S: The Revolution May be Taxed,” LA Weekly, January 23, 2008 available at http://www.laweekly.com/news/news/prop-s-the-revolution-may-be-taxed/18214/ as of July 29, 2008.

133  David Zahniser, “ Texas Oilman Aids L.A. Phone Tax Effort,” February 1, 2008, Los Angeles Times, available at http://articles.latimes.com/2008/feb/01/local/me-pickens1 as of July 25, 2008.

134  Dean Calbreath, “Pickens Pitches Plans to Shift U.S. Away from Oil,” San Diego Union Tribune, July 25, 2008, available at http://www.signonsandiego.com/news/business/20080725-9999-1n25pickens.html as of July 30, 2008.

135  “Clean Energy is Awarded $3.6 million MSRC Grant to Help Fund Nine New Natural Gas Fueling Stations in Southern California,” Clean Energy press release, July 17, 2008 available at http://www.cleanenergyfuels.com/0108/7-17-08.html as of July 30, 2008.

136  “Pickens Pitches Wind Power to Congress,” The Washington Post, July 22, 2008, available at http://www.washingtonpost.com/wp-dyn/content/video/2008/07/22/VI2008072201162.html as of July 22, 2008.

137  Dan Reed, “Texas Oilman T. Boone Pickens Wants To Supplant Oil With Wind,” USA Today, July 8, 2008, available at http://www.usatoday.com/money/industries/energy/2008-07-08-t-boone-pickens-plan-wind-energy_N.htm as of September 2, 2008.



 


Donation button



The National Center for Public Policy Research
501 Capitol Court, N.E.
Washington, D.C. 20002
(202) 543-4110
Fax (202) 543-5975
E-Mail: [email protected]
Web: www.nationalcenter.org