Magazine | June 20, 2011, Issue

Energy 2011: Disinherit the Wind

Mr. Pickens seeks a subsidy

Spend any time in West Texas, and you’ll get used to leaning into the wind. So persistent is the wind that a legend has it that it stopped blowing once for half a minute and all the chickens fell over between Amarillo and San Angelo. If the locals could take wind and barrel it up like they do oil, or pipe it around like they do gas, they’d be living like sultans in the Saudi Arabia of wind. But they can’t. And somebody needs to explain that to T. Boone Pickens.

Mr. Pickens is trying to sell Congress something called the Pickens Plan, a madcap, Rube Goldberg political contraption designed to appeal to the worst elements of American politics — corporate self-dealing, xenophobia, economic illiteracy — while directing billions of dollars of subsidies into businesses in which Mr. Pickens has a financial interest. The plan goes like this: T. Boone Pickens and associates build some enormous wind farms on the Great Plains, which will produce a great deal of electricity. Unfortunately, the Great Plains are sparsely populated, and the current infrastructure for transmitting electricity would not support the efficient transmission of power from Mr. Pickens’s wind farms to the country’s population centers. So, somebody has to build a new system, and somebody has to pay for it: Mr. Pickens is nominating the American taxpayer to play that role.

But wind power is just the beginning of it. Mr. Pickens wants to create that new wind power so that he can divert a great deal of the natural gas currently feeding the nation’s electric-power plants into the transportation market, specifically into the tractor-trailer rigs that haul food and freight and much else around the nation. Mr. Pickens is deeply invested in the natural-gas business and is the majority shareholder in the leading supplier of compressed natural gas (CNG) vehicle fuel. Unfortunately for him, the nation’s freight carriers have shown very little interest in converting their 18-wheelers into vehicles powered by compressed natural gas. The reason for this is that CNG conversion is expensive and inconvenient. And because there aren’t many trucks running on natural gas, there are not a lot of gas stations and such set up to fill up CNG vehicles. You can see how this would inconvenience Mr. Pickens and his colleagues.

Since the people who buy 18-wheelers haven’t shown much interest in buying CNG-powered versions, the Pickens Plan would help them to see the light, with a combination of mandates and bribery. (The original version of the NAT GAS Act, the Pickens Plan’s enabling legislation, contained a mandate that a certain proportion of new trucks be CNG-powered. That provision has been dropped, but an industry mandate, or the threat of such a mandate, remains as essential to the Pickens Plan as the individual mandate is to Obamacare.) Converting to CNG is expensive — the tax credits would run up to $64,000 per truck, with about 8 million or so trucks operating in the country, and $100,000 per filling station to retrofit. Mr. Pickens proposes to offset that pain by offering a bunch of subsidies for the people who would be obliged to endure it. Somebody has to pay for those, too, and Mr. Pickens again nominates the American taxpayer.

This is buffoonery — buffoonery to which both Barack Obama and John Boehner, along with about 150 members of Congress, have pledged their support.

Mr. Pickens is on a jihad against “foreign oil.” He believes that the United States should consume less oil produced in the places where it is most efficient to produce it. Ask him why and he’ll sputter about Arabs and Chinese — I’ve asked, I’ve seen the sputtering. The economic philosophy holding that a country should produce what it consumes and consume what it produces, minimizing its trade with nefarious foreigners and their wicked, efficiently produced goods and services, is called “autarky.” Autarky is not really how you want to live: On the individual level autarky means the life of Robinson Crusoe, and on the national level autarky means the life of North Korea. The intermediate grades of autarky are hardly more attractive. It is difficult to imagine why we would not want to consume goods produced in the places they are best produced. Nobody in Maine expects to eat locally grown mangos, and you don’t go to Lubbock, Texas, for the fresh seafood. If you live in Kansas, you probably drink wine made by the invidious French rather than by the good plainsmen of Eureka, decent and God-fearing though they may be. Italians want their televisions made by Sony. Indians will drive Indian cars until they can afford German ones. And thus the world goes ’round.

#page#Oil is thought to be different, even by a good number of conservatives who should know better. They call their goal “energy independence,” and the case for energy independence is: Arabs gotta lotta oil. Not to put too fine a point on it, conservatives who also are members of the Yahoo-American community do not have much use for Arabs, and they imagine that conferring a trillion-dollar subsidy upon T. Boone Pickens & Co. is a good way to stick it to Mohammed al-Mayhem. Some of you may remember Arianna Huffington’s harebrained campaign against SUVs a few years back and the Beverly Hillbilly jingoism that accompanied it: If you drive a Hummer, you’re basically in bed with al-Qaeda. Likewise, Mr. Pickens refers to natural gas as “patriotic” fuel. This subtle analysis misses the fact that the two largest foreign suppliers of oil to American consumers are: 1) Canada and 2) Mexico. The day a Canadian flies an airliner into a building in Manhattan, I’ll start worrying about radicalized ’Nucks and their filthy foreign oil. (Seriously, even the Bloc Québécois has settled down.) And Mexicans are effectively the most pro-American people around: By their deeds, they prove that there is no place they’d rather be. If the local Exxon refinery wants to buy their oil, I say: Fill ’er up, neighbors.

The Pickens Plan combines the worst kind of Al Gore enviro-utopianism with precisely the same kind of big-business self-seeking that produced the ongoing ethanol boondoggle. And, because Mr. Pickens is a hedge-fund man these days in addition to being an oil-and-gas man, there’s even a Wall Street angle: Firms financing alternative-energy projects would be given the power to issue tax-free bonds of the sort that municipal authorities have issued for years, conferring yet another round of taxpayer subsidies on the pinstripes set. Truly, the Pickens Plan has something for everybody.

The xenophobic rhetoric used to sell the Pickens Plan is especially revealing. “The Chinese have a plan,” Pickens’s literature reads. “Do we?” The Chinese are famous for their economic plans, traditionally developed on the five-year model. The five-year plan is the hallmark of Communist central planning, the butt of endless Cold War jokes, and the source of equally endless human misery. Of course the Chinese have a plan: They have a plan for population control, too. They have a plan for ensuring the cultural and political subservience of ethnic and religious minorities. I’m pretty sure they have a plan for breaking off a chunk of the Russian far east. Beijing is full of plans, and full of central planners: China is a one-party police state maintaining Marxist forms for nationalistic ends. Central planning was a disaster for Russian industry and a disaster for Chinese agriculture. It’s been a disaster for the Venezuelan energy industry and a disaster for American primary-school education. But T. Boone Pickens thinks he’s got the right plan this time, and all he needs is a trillion dollars of your money to get started.

– Mr. Williamson discusses the Pickens Plan at length in his book, The Politically Incorrect Guide to Socialism.

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