Saying America’s addiction to imported oil is a “growing and dangerous” crisis, independent oil billionaire T. Boone Pickens unveiled an energy plan that he said could reduce America’s dependence on foreign oil by more than one-third within 10 years by shifting the national energy mix toward domestic renewable sources and using more natural gas as a transportation fuel.
“Our dependence on imported oil is killing our economy,” Pickens said in New York Tuesday morning. “It is the single biggest problem facing America today. As we import more and more of our energy, we are participating in the greatest transfer of wealth in the history of mankind, sending billions of our dollars overseas to buy oil for a commodity that lasts 90 days until burned in our gas tanks.
“This has to stop and it has to stop now before we get to a place where no actions can make a difference. Crisis means danger and opportunity. We know the danger, but now we have the opportunity to do something that we should have done 30-40 years ago. Sometimes it takes a crisis to awaken us from our slumber, but once aroused the American people can accomplish miracles.”
Pickens said he will fund an aggressive advertising and Internet education campaign to focus attention on this crisis and to advance a plan that he said could reduce foreign oil dependency by more than one-third and save more than $230 billion a year. The Pickens Plan calls for investment in power generation from domestic renewable resources such as wind and using natural gas as a transportation fuel.
The Pickens Plan would involve three steps:
Ramping up wind power quickly on a large scale is feasible if the government enacts the correct policies, starting with renewal of the production tax credit for wind power, according to the American Wind Energy Association (AWEA).
“In order to make this happen, however, the U.S. government will need to play its part and enact short- and long-term policies to transform many of our current practices,” said AWEA Executive Director Randall Swisher. “Of critical and immediate importance is an extension of the federal production tax credit so that the industry can move ahead with planned investments and keep people at work. Of equal importance will be longer-term policies to plan for more transmission to bring large amounts of wind power from windy areas to population centers.”
In May the U.S. Department of Energy (DOE) issued a technical report that concluded that wind power is capable of becoming a major contributor to America’s electricity supply by 2030 and most of the necessary tools to make that happen are already in place. In order to hit the 20% target, installations of new wind capacity would have to increase to more than 16,000 MW annually by 2019 and continue at that rate through 2030. According to the report, the central obstacles to achieving that goal — transmission, siting, manufacturing and technology — can be overcome. Growing wind to 20% of the nation’s energy mix would cost about 2% more than the cost of a baseline scenario without wind, an increase of about 50 cents a month for the average ratepayer, according to the report.
A study released last month by GE Energy Financial Services concluded that the added tax revenues generated by new wind energy development eclipses the federal tax breaks that expire at the end of the year and are generating a loud debate in Congress. The study concluded that tax revenues from wind projects more than offset the government’s costs for the tax breaks.
President Bush in his February 2006 State of the Union speech unveiled an energy initiative that included plans to boost research for wind energy and spur the development of solar power. Earlier this year the president laid out a plan to stop the growth of heat-trapping greenhouse gas emissions in the United States by 2025. The plan included a single, expanded incentives program to spur commercialization of new, lower-emission technologies, including those used to generate wind power.
In Texas, which leads the nation in the amount of power it generates from wind resources, the Electric Reliability Council of Texas Inc. (ERCOT) earlier this year completed a study of electric transmission options to bring wind power from West Texas and the Panhandle to the state’s load centers. A variety of scenarios were examined, each costing multiple billions of dollars.
Texas Senate Bill 20 (2005) directed the Public Utility Commission of Texas (PUCT) to designate Competitive Renewable Energy Zones (CREZ), after consultation with ERCOT and Southwest Power Pool, in areas with sufficient renewable resource potential and financial commitment from developers and to designate a plan for transmission to the areas. The PUCT issued an interim order in July 2007 designating five CREZ areas of the Panhandle and West Texas. The PUCT directed ERCOT to perform optimization and reliability studies and recommend a transmission plan for four different levels of wind capacity from the designated zones.
Last year Pickens’ Mesa Power filed documents with the ERCOT for a 4,000 MW wind farm, which could cost upwards of $6 billion and would be the world’s largest. The project could have as many as 2,700 turbines on up to 200,000 acres in Roberts and adjacent counties in the Texas Panhandle. The project has an in-service date of late 2011.
Pickens — the largest single investor in a natural gas supplier to heavy vehicle fleets of buses, trash trucks and airport shuttles called Clean Energy — said last year that more nuclear generation plants are the future of the electricity sector and natural gas should be targeted for use as a vehicle fuel (see Daily GPI, May 1, 2007).
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