I attended this week’s 2012 Milken Institute Global Conference in Los Angeles. On Monday, I and other media members chatted with energy tycoon and advocate T. Boone Pickens before his dinner appearance.
T. Boone Pickens probably knows more than you do about natural gas and oil. And the differences and best uses of compressed natural gas and liquefied natural gas. And how many buses run on natural gas in Beijing (5,600, he said), not to mention Oklahoma State University football.
But he wants you to know one thing above all: The ongoing threat of the Organization of Petroleum Exporting Countries should be creating a national urgency that equals Pickens’ personal urgency. Pickens, who is nearly 84, wants to act now, and he believes the newfound bounty of abundant natural gas and bargain-basement natural gas prices creates an ideal avenue to do so.
How does he plan to lessen U.S. dependence on foreign oil? Through outfitting 8 million heavy-duty trucks — 18-wheelers, essentially — with natural gas-powered engines. He’s been the inspiration for the NATGAS Act, which would provide incentives for natural gas vehicles; the proposal recently was voted down as an amendment to a Senate transportation bill and has been stagnant as a standalone bill in the House. But this hasn’t deterred him from promoting natural gas heavy-duty vehicles or opposing foreign oil. “I’m trying to get off OPEC oil. I’ve got a national security angle to this thing. … If I get off OPEC oil, I get off getting our people killed. I want out of Afghanistan, I want out of Iraq, I want the hell out of the Middle East.”
Furthermore, he believes that the trend is with him. Garbage trucks, among other fleets, are switching over to natural gas at a brisk pace, and the cost of converting is coming down quickly and can be more than offset by the savings on using natural gas instead of diesel. The other alternatives — ethanol and biodiesel — aren’t good enough, he says. “We’re in the middle of a fundamental change in transportation fuel in this country. This is all gonna happen, and it’s gonna happen because it’s so cheap.”
Pickens knows there are tradeoffs, and he’s not afraid to make them. Adding 8 million vehicles (of 250 million total U.S. vehicles) using natural gas will cut into the vaunted 100-year domestic supply, and it could, along with separate factors, increase the market price of natural gas. But he’ll tell you that he’d rather not sit on our supply, squandering jobs and the chance to stop sending money to OPEC and risking American lives overseas. He’s not concerned about a 14-cent-per-gallon rise in natural gas fuel costs for every $1 per million cubic feet increase in the commodity price, because the gap between natural gas and diesel — the only realistic choices for truckers — is measured in dollars, not cents. And he believes that the fueling infrastructure is a problem already being worked on and ultimately overcome by trucking demand for the fuel.
On the legislative front, Pickens is not shy about saying how his plan would do the job that the president and Congress haven’t done. Of President Barack Obama, “He said, we will not import any oil from the Mideast in 10 years. And he has never had a plan that I’ve seen” for doing so. And when Sen. Bob Corker, R-Tenn., objected to the Senate amendment by saying it would pick winners and losers, Pickens said, “When you turn natural gas down, you pick OPEC.”
Fundamentally, his confidence in U.S. natural gas is rooted in an urgency for energy independence, but also in his confidence in the domestic oil and natural gas industry. “They’ve done an unbelievable job, the technology and the horizontal drilling and multiple fracking of the wells and all. It’s been a great performance on their part. And instead of people criticizing them all the time, I don’t quite understand the attitude towards the industry.”