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Pickens’ New Plan: No Wind

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T. Boone Pickens has a new plan — but fewer allies — in his quest to curb America’s dependency on foreign oil.

With wind energy projects not proving as financially viable as he anticipated, Pickens has tabled the renewable energy portion of his acclaimed Pickens Plan for clean energy and turned his focus exclusively to increasing development of natural gas.

The shift has divided what was once a powerful alliance between environmentalists and industry groups and is raising questions about Pickens’ relevance to the energy debate in Washington, D.C.

The Sierra Club, whose former executive director once praised Pickens as a man “out to save America,” has openly criticized this new approach and questioned whether the 82-year-old billionaire stands to profit from natural gas.

In an interview with Roll Call, Pickens defended his new focus as the only practical way forward.

“Of course, I wish I had everybody with me. Does it hurt [not to]? Sure. It’s not going to help. But you can’t do wind because natural gas is too cheap,” Pickens said. “There is a huge opportunity to get natural gas into the market, so I would ask the Sierra Club, what can I be for?”

The Texas billionaire unveiled the Pickens Plan in 2008 as a rallying cry for a comprehensive energy strategy. The plan proposed a major investment in wind turbines as a way to generate power, freeing up domestic natural gas to be used as a substitute for foreign oil and diesel in commercial trucks. Pickens envisioned that wind and natural gas combined would free America from its dependency on foreign oil.

But Pickens has now canceled the bulk of a $1.5 billion wind turbine order that he placed with General Electric last year and says wind power will not be profitable until the cost of natural gas rises from $4 to $6 per million British thermal units. That, he estimates, will happen by 2016.

In the meantime, the turbines that he has already purchased are slated to go to Minnesota and Canada, far from the nation’s oil-dependent South that Pickens said could benefit from a shift in energy strategy.

“You have no way to force wind in unless it makes economic sense,” Pickens said, explaining why he is pushing for natural gas in the interim. “You’re sitting here on an abundance of the cleanest of all hydrocarbons. You’re a fool if you don’t use it. If you turn it down, it means you’re for foreign oil.”

So, Pickens has turned his focus to lobbying Congress for the NAT GAS Act, a bipartisan bill introduced in April by Rep. John Sullivan (R-Okla.) to provide incentives for fleet vehicles to switch to natural gas. Pickens regularly fires up his private jet and makes the 1,000-mile journey between Dallas and Washington to push for the measure.

Pickens estimates that America’s reliance on foreign oil will be cut in half if
8 million 18-wheel trucks make the switch. The ultimate goal, as he explains it, is to “get off OPEC oil.”

He has also built a grass-roots base, dubbed the Pickens Army, of 1.7 million individuals whom he calls on to lobby Congress on behalf of his agenda.

These activists help counter the growing opposition that Pickens faces on natural gas from oil companies to environmentalists.

Bruce Hamilton, deputy executive director of the Sierra Club, said any excitement “about the fact that there was a major fossil fuel kingpin saying we’re addicted to oil and we need to be massively investing in wind power” has since faded.

Hamilton said Pickens “stands to make a lot of money” from natural gas, a resource that the Sierra Club has said lacks regulation. Companies are not required to disclose what chemicals they use to draw natural gas out of the ground.

Pickens denies the charge, saying his Texas ranch has “a minor amount” of natural gas wells.

The Pickens Army has also helped the oilman remain relevant in Washington, even as his bold energy agenda whittles down to a narrow focus on natural gas, said Frank Maisano, an energy specialist at Bracewell & Giuliani.

“A lot of people think natural gas fleet vehicles are a good idea. Is he the inventor of that approach? No,” Maisano said. “The Pickens Plan was very wide at one point, and that’s what got a lot of attention to it. But that has fallen to the wayside.”

Pickens insists he is still interested in wind power in the long term. The American Wind Energy Association, which in 2009 named Pickens “Industry Person of the Year,” has defended him on that basis.

But Peter Kelley, a vice president of the industry group, added that he sees no reason to wait to implement wind energy.

“We agree that natural gas prices won’t stay as low as they are today for very long, and that’s one of the reasons we believe wind energy needs to be a bigger part of our energy mix all along, so electric utilities can lock in long-term low rates today,” he said.

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