Get with the Plan
From the June 20, 2011, issue of NR


In Article I, Section 8, the United States Constitution grants Congress the “Power To,” among other things, “provide for the common Defense and general Welfare of the United States”; “regulate Commerce with foreign Nations”; and “lay and collect Taxes.”

While the Constitution does not speak directly about “establishing an energy policy,” the need for an energy policy is certainly implied by the powers over defense, general welfare, commerce with foreign nationals, and the laying and collecting of taxes.

Four years ago, in May 2007, the major issues in the presidential campaign were the war in Iraq and a decelerating economy. A year later, by May 2008, the war was still an issue and the economy was going in reverse. No one was talking about energy.

In July 2008, with oil at nearly $150 per barrel and gasoline well over $4 per gallon, I introduced an energy-policy proposal called the Pickens Plan. From that time to this, every major candidate for federal office has talked about the need to reduce our dependence on foreign oil generally and OPEC oil in particular. But we have not made much progress. In April 2011, we spent about $42 billion on imported oil. Annualized, that amounts to half a trillion dollars shipped to such countries as Saudi Arabia, Venezuela, Nigeria, Angola, and Iraq. I can’t find anyone who thinks putting our economy (“general Welfare”) and energy security (“common Defense”) into the hands of unstable and unfriendly countries such as those (“Commerce with foreign Nations”) is a good idea.

Even with the death of Osama bin Laden, the War on Terror goes on, and it is not difficult to see the link between sending hundreds of billions of U.S. dollars to unfriendly nations and the continued ability of terrorist organizations to recruit, organize, train, and deploy fanatics who are bent on doing America harm. Someone is paying for all that, and I believe that someone is us.

About 70 percent of the oil we import is used as our primary transportation fuel: as gasoline for our national fleet of 250 million cars and light trucks, or as diesel fuel for our 8 million heavy-duty and fleet trucks.

All that oil accounts for two-thirds of our trade deficit, which, along with several other elements, puts a drag on our ability to recover from the recession. As the debate in Congress over fiscal policy continues to escalate, the amount of money we are — by our own choice — removing from our economy by sending it offshore has a huge impact on our ability to reduce our $14 trillion national debt.

From its earliest days, the Pickens Plan was designed to replace a significant amount of imported oil with domestic natural gas as a transitional transportation fuel. Over time, as new data have become available, the Plan has evolved.

About one year into the Pickens Plan, an organization called the Potential Gas Committee — which is associated with the Colorado School of Mines — released a report that, for the first time, recognized that a significant amount of the enormous natural-gas reserves known to be contained in the vast shale deposits under the continental U.S. are now available for economically viable recovery, because of the development of a horizontal hydro-fracturing drilling technique.

This report shocked the natural-resource world by taking natural gas out of the realm of “scarce and diminishing.” Additional studies were released indicating that our natural-gas reserves could last more than 100 years and contain more energy than all the oil in Saudi Arabia.

The ample supply and the recession combined to cause the price of natural gas to drop. This had the effect of making funding for alternative power sources tougher to come by, because wind and solar are priced “on the margin” — which is to say, priced at what it would cost a power company to produce a kilowatt of electricity using natural gas — and the seizing up of the financial industry made it much tougher to finance large-scale projects.

Nevertheless, the Pickens Plan has remained a stalwart supporter of wind power, especially in the wind corridor stretching from Texas to the Canadian border. As production costs of turbines have come down, and as financing has become more accessible, wind power has again gained favor as a source of alternative energy.