The "Pickens Plan"… One Year On
Of all the people you might expect to spearhead a movement away from oil and onto alternative energy, T. Boone Pickens probably wouldn’t be at the top of the list.
But a year ago, the 81-year old chairman of BP Capital spent his own money to buy prime time on major networks and mobilized an "army" of believers in order to get the word out about the dangers of continued dependence on foreign oil.
Earlier this month, Pickens appeared on CNBC’s "Squawk Box" to discuss the progress of the "Pickens Plan," which essentially seeks to reduce the nation’s dependence on foreign oil through a combination of wind-generated power and natural gas powered vehicles. The goal: Drastically reducing or eliminating the need for foreign oil in as little as 10 years.
His timing was perfect, as oil prices shot to all-time highs around $150 a year ago. The plan garnered a lot of attention. And to his credit, over the past 12 months, nobody else has articulated a plan as clearly and succinctly as Pickens’ has.
Today, however, oil prices are down some 54% and the U.S. is sliding deeper into recession. Is shutting off foreign oil still a concern? Have we made any progress in doing so? Are we any closer to a national energy plan?
The short answers are:
- Definitely yes
- Yes
- Almost
Let me explain…
Get Rid Of The Rogues… And Pocket $400 Billion
While the price of oil has declined dramatically over the past year, our dependency on foreign oil is as great as ever. We still get over 70% of our oil from other countries, and it’s a huge security issue.
While the transfer of wealth - dollars out for oil in - is less, it’s still a huge net outflow of nearly $400 billion annually.
There’s no question that keeping that money here will not only have a positive effect on our trade balance, it’ll make a huge difference in the U.S. economy - a "free" $400 billion annual stimulus package, if you will.
Alternatively, according to Pickens, "If we go 10 more years with no plan, we’ll be importing 75% of our oil and it will cost us $300 a barrel."
Even if he’s wrong by 50% - which is unlikely given increasing world demand - it’s still a big problem. So how do we get rid of the rogues?
The "Anti-Oil": U.S. Natural Gas Reserves Soaring
In terms of our progress in displacing foreign oil, there’s only one quick way to do it: Replace it with natural gas.
The Potential Gas Committee - the nation’s authority on natural gas supplies - recently issued a report that showed a substantial increase in U.S.
