“You’ve got to think huge.”This is T. Boone Pickens’ summary of his plan to reduce America’s dependence on foreign oil. The famed oilman spoke to a small number of Republican delegates and Congressmen gathered in Minneapolis-St. Paul for the GOP’s National Convention this week, and he laid out a massive proposal for the future of energy.
Pickens is worried that every year, the United States spends $700 billion on foreign oil and if current trends obtain, $10 trillion will leave the country in the next decade. This is both a big-picture economic crisis, and a daily dilemma for Americans trying to put fuel in their cars and heat their homes.
Pickens’ “think huge” philosophy is born of the fact that the situation is urgent and, practically speaking, no single solution can solve the problem. New battery technology will be great but, Pickens observes, a battery cannot move an 18-wheel truck. Nuclear power could provide more than the 20 percent of America’s energy that it does today, but approvals and logistics would delay the first new reactor coming online for at least a decade. Moreover, the inability of reactors to run much below full capacity means they would have to be supplemented by sources that can adapt to usage levels, such as clean coal.
So, Pickens says, America should do it all: drill for oil domestically, develop wind, solar and nuclear generators, build a new transmission network to move power where it’s needed, provide incentives for renewable energy production and alternative fuel vehicles, and use natural gas for transportation. This last step, Pickens believes, will start reducing America’s dependence on foreign oil immediately and will cut imports by 38 percent within ten years.
Every president since Richard Nixon has promised to move America toward energy independence, but the percentage of its oil that the U.S. imports has risen from 24 percent in 1970 to 70 percent today. Pickens has shared his ideas with Republican presidential nominee Sen. John McCain, as well as his Democratic counterpart, Sen. Barack Obama, and he feels the federal government can take a leading role in the marketplace. “I would like the new president to say that any cars purchased by the government will be natural gas vehicles. That would send a message.”
Pickens is quick to draw a distinction between importing oil from Canada as opposed to the Middle East, saying, “From friends, it’s okay.” It is the 63 percent of America’s oil imports that come from non-North American sources, including unfriendly regimes, that have him concerned.
He believes Canada has larger reserves than Saudi Arabia, but notes that the expense of extracting from the oil sands means the price of crude needs to be at least $85 a barrel for producers to maintain a 15 percent profit margin. Costs notwithstanding, Pickens predicts Alberta oil sands production will shoot up from current levels to 5 million barrels a day.
As to his credentials, and the ups and downs of oil exploration, Pickens says, “I don’t care who you meet in the next ten years, you will not meet anybody who has drilled as many dry holes as I have. I know about looking for oil. I have looked for oil in Africa, the North Sea, Australia, Canada. I’ve been around the world and I’ve found a lot of oil.”
Asked how the United States could have gotten itself into this energy muddle, Pickens begins by pointing to elected officials who should have seen it coming: “It’s a lack of leadership. We didn’t have the leadership in Washington that said, ‘We have to develop alternatives. We have to do something different.’”
But he is circumspect in assigning culpability, recognizing that all citizens have a duty to foresee and address threats to their nation: “My wife said, ‘If you’re going to blame them, why wouldn’t you blame yourself? You understood it, and you didn’t do anything about it.’ And so I thought, well, that’s true. We’re all to blame – all of us.” So, Pickens is putting his money where his mouth is, harnessing his hard-earned wealth to make America a better place.
Since July, Pickens has been buying advertising time and taking to the Internet to introduce Americans to his ideas. Television commercials and websites tell some of the story, but when a fellow is proposing something as revolutionary and comprehensive as Pickens’ plan, you need to look him in the eye and hear him talk it out. Of initial reaction to his campaign, Pickens laughs, “There were three articles written, saying that I’d lost my mind.”
“I’m an American, I want the best plan for America."But Pickens is sane and sensible, combining civic duty with a record of accomplishment to create a cogent and credible point of view. He is eager to hear what folks think and to defend his positions, and he has enthusiasm for other people’s ideas. Pickens admits that his might not be the best possible solution, and he welcomes improvements: “I’m an American, I want the best plan for America. If we have a better plan, I’ll go for it.”
He has critics on both sides of the aisle, including Democrats who bristle at his calls for more domestic drilling, and Republicans who resent his insistence that drilling alone cannot solve this problem. But to those who dismiss his plan, Pickens has a pithy reply: “What’s yours?”
theo@theocaldwell.com - Theo Caldwell, president of Caldwell Asset Management, Inc., is an investment advisor in the United States and Canada.
