Boone Pickens’s Plan Full of Hot Air

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Boone Pickens’s Plan Full of Hot Air

Posted by Jeff Rubin on August 11th, 2010 under SmallerWorldTags: Boone Pickens, ethanol, natural gas, shale gas, Volt • 8 Comments

Boone Pickens’s plans to save the United States from its energy dependence on so-called hostile petro-powers is, simply put, full of hot air. The abundance of shale gas in the US will no more free the country’s motorists from dependence on foreign oil than have either the American production of over ten billion gallons of corn-based ethanol or the rollout of GM’s electric-powered Volt.

There’s a reason for the fact that, for a given amount of energy, natural gas prices today trade at a fraction of the price of oil. If people could just switch from using one fuel to the other, that price gap would quickly be arbitraged away. But they can’t—at least not where it counts the most.

Not that there hasn’t been scope for substitution. Few households in North America still burn oil to heat their homes—most switched to much cheaper domestically produced natural gas after the OPEC oil shocks of the 1970s. Even fewer North Americans rely on burning oil to generate power for their homes. And most petrochemical producers can switch from oil to a natural gas feedstock.

But unfortunately, the majority of oil consumed in the United States—and indeed in the rest of the world—is used as a transport fuel. On average it’s about 60 per cent of all the oil consumed, and as much as 90 per cent of each new barrel that comes out of the ground. And that’s exactly where prices for oil and natural gas disconnect.

Planes fly on jet fuel made from oil, ships run on bunker fuel made from oil, and, most importantly, motor vehicles run on gasoline or diesel made from oil. And with good reason: oil packs about four times the energy density of natural gas. And it carries about 20 times the energy density of the lithium-ion battery found in an electric car.

That’s a key reason why neither electric- nor natural gas–powered cars have made any sizeable inroads into the North American vehicle market. The 110,000 or so natural gas–powered vehicles in the US, most of them urban buses, remain an insignificant fragment of a 250 million-vehicle market. And the story isn’t any different with electric powered cars: GM doesn’t expect to sell more than 10,000 of its heralded Volt next year.

Another reason is the absence of a fuel distribution system. Outside of urban centers, there are few gas stations that supply natural gas, which means that, at best, the fuel can only be used for urban commutes. To build a national distribution system for the fuel would require subsidies that far exceed anything already squandered on encouraging home-grown ethanol production.

Switching to natural gas is no more attractive an alternative for most American motorists right now than switching to corn-based ethanol or electric power. And until it is, expect natural gas and oil prices to stay disconnected, leaving the American economy as dependent as ever on foreign oil suppliers.

http://twitter.com/mika2k1 mika.

How Copenhagen Became a Great People-Oriented City (Video) – http://bit.ly/dyadsa
http://twitter.com/nelderini Chris Nelder

Jeff: I think you have missed the point of the Pickens Plan. It does not imagine running all our cars on natural gas; in fact Boone has specifically said that can't be done. Instead it hopes to convert a substantial part of our 18-wheeler trucking fleet to natural gas, which most definitely can be done with a relatively modest build-out of refueling infrastructure and truck conversions. Indeed it already is being done at a far larger scale elsewhere in the world, and in the US as well in response to other factors. For example, the port of Long Beach has a goal to convert 100% of the Port’s fleet to cleaner vehicles, including natural gas powered trucks. I remain skeptical about the future of shale gas production, and I respect Art Berman's work in that area. But it does seem reasonable to me that switching the trucking fleet to CNG would, in fact, make a substantial dent in our petroleum imports and create another bridge solution to a long-term scenario of renewably-powered infrastructure.
http://www.wyman.us/ bobwyman

In New York City, oil is still very commonly used for heating. In fact, there are still 9,000 buildings in this city that annually burn 70 Trillion BTU's of No. 6 residual fuel oil (basically bunker fuel) and 25 Trillion BTU's of No. 4 fuel oil.
See: http://dirtybuildings.org (hosted by EDF) to get a picture of the problem we have here.
According to a study by NYU-Law, converting just those 9,000 buildings from oil to natural gas would result in a reduction of annual mortality due to respiratory diseases by 259 lives and cumulative health benefits of $22 Billion over the next 30 years . Also, the annual reduction in particulate pollution would be the equivalent of removing 441,000 cars from the road as well as reducing CO2 emissions by 2.3 Million Tons per year.
The patterns of oil use depend on where you live. In New York City, we should be providing a great market for Boone Picken's oil.
1Eco_Indigo_1

Yes, gas is part of the short to medium term energy mix, but as Jeff points out, if crude oil either becomes too expensive or physical supply shortages manifests, then gas powered trucks will be all that are running on the roads. This is just common sense, as i don't know anyone who has a dual fuel car, cripes!

I have to state that its incredible how the united states of america, a country founded on the hemp plant, cannot bring the potential of this plant to bear in terms of rebuilding the economy. Even as a food stock for local communities,hemp would provide a solution for high food prices or supply chain disruption. Whats even more incredible is that the federal government of the united states does not grasp this, and the rejuvenating effects of mass hemp cultivation. Imagine how much of a hero Obama would be if he repealed the legislation surrounding hemp? The dutch have shown that you don't become a nation of junkies, its more a case of maturity.

Here is the spirtiual/psychological issue at the root of this. We look to leaders/alpha males to provide for the 'weak', when ultimately, it is up to each individual to ensure they are able to provide for themselves, irrespective of society, coffee machines, mcdonalds etc. It is about personal responsibility. Can obama do what he wants? No. Can he wake up monday and say “everyone in america will jump off a cliff at noon”, No. No individual can affect the whole mass. This is a large portion of the human population versus nature, and i believe that everytime this has happened, nature has had the last word.

I know that when you drill down hard, methanol doesn't have the energy density of crude oil based petroleum, but what does? The world has taken the privilege (if it can be called that) of crude oil use for granted, and accepting humble alternatives is a small price to pay for disappearance of crude oil from our society altogether. If crude oil supplies got shut off from western economies, they will shatter, and make no mistake, people are not prepared in the slightest.
Rocrac80

I agree with your assessment.
Zantors

Got this from an e-mail. A hoax?

About 6 months ago, the writer was watching a news program on oil and
one of the Forbes Bros. was the guest. The host said to Forbes, “I am going to
ask you a direct question and I would like a direct answer; how much oil
does the U.S. have in the ground?” Forbes did not miss a beat, he said, “more
than all the Middle East put together.” Please read below.

The U. S. Geological Service issued a report in April 2008 that only
scientists and oil men knew was coming, but man was it big. It was a
revised report (hadn't been updated since 1995) on how much oil was in
this area of the western 2/3 of North Dakota, western South Dakota ,
and extreme eastern Montana …… check THIS out:

About 6 months ago, the writer was watching a news program on oil and
one of the Forbes Bros. was the guest. The host said to Forbes, “I am going to
ask you a direct question and I would like a direct answer; how much oil
does the U.S. have in the ground?” Forbes did not miss a beat, he said, “more
than all the Middle East put together.” Please read below.

The U. S. Geological Service issued a report in April 2008 that only
scientists and oil men knew was coming, but man was it big. It was a
revised report (hadn't been updated since 1995) on how much oil was in
this area of the western 2/3 of North Dakota, western South Dakota ,
and extreme eastern Montana …… check THIS out:

The Bakken is the largest domestic oil discovery since Alaska's Prudhoe
Bay, and has the potential to eliminate all American dependence on foreign
oil. The Energy Information Administration (EIA) estimates it at 503 billion
barrels. Even if just 10% of the oil is recoverable… at $107 a barrel,
we're looking at a resource base worth more than $5..3 trillion.

http://www.usgs.gov/newsroom/article.asp?ID=1911
KLou

Check out Clean Energy (CLNE) which has about 200 CNG filling stations in the USA.
You can drive across the country right now using CNG. Also, in Europe there are many vehicles using CNG rather than gasoline.
Jeff should talk with the experts at PetroBank (a canadian co) about their “Thai” process of insitu production of oil from the tar sands. They are in production now
http://woodworking-books.org Best Woodworking Plans

Planes fly on jet fuel made from oil, ships run on bunker fuel made from oil.

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Boone Pickens’s Plan Full of Hot Air