Pickens (Shale) Plan Smells Like Methane

I have examined the “Pickens Plan” and it seems to be a new variation of the old shell game but on a grand scale, from Shale to shining Shale.

Oilman T. Boone Pickens first wind farm, which when completed sometime around 2016 for about $10 Billion, will be 5 times bigger than the worlds largest to date (735 MW in Abilene, TX) at an ambitious 4000 MW. In his presentation we are told his plan is to replace 22% of U.S. electric power generation , the amount currently done with natural gas (NG), with wind power generation in ten years, freeing the NG for transportation use. Is this plan realistic? If not, what is he really up to? It smells like methane to me!

There is 313,901 MW of NG electricity production in place now ( 216,269 MW NG Combined Cycle + 97,632 MW NG Boiler). Pickens record shattering 4000 MW farm is not even close to this, so surely he means when the whole middle of the country has wind installed. OK, 313,901/4000 = 78.47 more wind farms the size of his will be needed in the next ten years. Are there 78 more T. Boone Pickens types lined up and ready to build wind farms? With $7.8 Trillion dollars in funding? This seems unlikely, but maybe, those oil guys have been doing pretty good at the pumps lately.

Let’s continue to examine this a bit.

A key to the part of the plan that claims to replace 22% of NG power generation with wind power generation is getting the right of way for transmission lines on a scale not seen since the railroads were built. Could this happen on the national scale envisioned on the map used in his presentation? Maybe, but probably not without a huge fight over property rights and compensation, and with environmental groups, which is the first reason Pickens needs the government’s help, and perhaps why we needed all the new eminent domain laws recently enacted. It’s important to note that Pickens own 4000 MW project will only tie into the Texas grid (ERCOT), which is separate from the other two power grids that serve the United States. This reduces the risk for his project in regards to transmission right of way as it’s all in Texas, and will have little impact on the rest of the nation’s electricity consumption. Predictably, environmental and property rights groups in Texas are resisting new transmission lines there, and T. Boone needs the government to step in and make new laws or bend old ones so he can carry out his plans. So even if there are 78 more oil-men that have “seen the light”, it is the transmission line issues that are far from resolved and this whole wind farm thing begins to look like a fantastic smoke screen, and maybe it is.

Pickens and his pals need the American public to buy in so they have repackaged an old message (wind & solar to solve our energy ‘crisis’) in a shiny new website with a good ol’ boy that made good spokesperson (Pickens) to sell “The Pickens Plan” to ‘merica. When the camera’s are switched off and the ‘boys’ meet in the back rooms, it will be Deutsche bank’s new report “From Shale to Shining Shale” that they will be huddled over. As part of his testimony, T. Boone gave copies of this 50 page document to members of congress and others for their private reading pleasure. He told them it is about new technology to process shale, and ‘new discoveries’ of massive new deposits in America that doubles the supply of natural gas previously thought available. Pickens testified “Five years ago I would have bet $100,000 to a cup of coffee, and drank the coffee” against this kind of a find.

One would think this information would immediately lower the price of natural gas but when asked about that T. Boone was quick to bluntly state no one should expect any lower price. So much for the free market laws of supply and demand!

Which leads us to the real reason T. Boone Pickens was in congress last week, which was to hook up with the boys in the back rooms to cook up the deals it will take to exploit the information in the Deutsche bank report, “From Shale to Shining Shale”. Extraction of hydrocarbons can be a messy process and shale is just about the dirtiest and least energy efficient of all. Big oil knows all about shale and has for decades. To date it has been cheaper and more environmentally friendly to pump oil out of the ground, but now with crude well over $150 barrel shale makes economic sense – that is so long as there is no environmental costs included in the calculation. Ah, those pesky EPA regulations! This is what T. Boone was roaming the Halls of congress about. He needs relief from government interference via environmental laws to exploit the ‘recently discovered’ increased supply of natural gas!

Suddenly it is all clear why an oilman is ringing the alarm and the “Pickens Plan” is the vehicle that will be used to exempt shale gas extraction and retort from the rules painstakingly made over the years as environmentalists have battled big business for protection of the world we all share. The plan is for everyone to look at this fanciful wind farm proposal while in the real world extraction on a massive scale will be authorized and blessed with government subsidies.

Why is this a problem you say? Well, if climate change is on page 2 for you, as it is for T. Boone, then odds are good it isn’t a problem, for you. But if global warming caused by increased emissions of CO2, health of our fresh water supply, pollution and damage to the land are on page 1 for you, then the Pickens Plan deserves a deeper look.

Firstly, the extraction and refining processes of shale hydrocarbons produce increased emissions as the raw feed-stock is mined and converted to useable fuel. These emissions are regulated and they must have EPA permits to operate, and there are environmental laws that apply. For example, Section 526 of the Energy Independence And Security Act prohibits United States government agencies from buying oil produced by processes that produce more greenhouse gas emissions than would traditional petroleum. Shale extraction is one such process.

But that’s not all. In addition to massive emissions of climate change pollution, both extraction and retort consume vast amounts of water, while mining operations destroy habitat and scar the land permanently. There are lots of laws and rules to be waived for the oil-men to maximize profits, and subsidies must be arranged for things that involve any risk. Special easements, mineral rights and other laws will have to be made, modified and overridden and this all takes a lot of back room dealing by the army of staff personnel involved, and THAT is what T. Boone Pickens is in Washington D.C. to get done.

Pickens singular vision of reducing imported oil has no conservation of hydrocarbons or reduction of climate change emissions in mind at all. In fact, emissions and consumption of fossil fuels are increased overall to extract, retort and refine the methane recovered from shale into liquid fuels for the existing fleet while distribution infrastructure is built out and manufacturers gradually convert the fleet over to NG. Even if the wind part can be done as implied, we are just shifting the use of the same volume of hydrocarbons from power generation to transportation. It is more of the “more” approach, which is the thinking that got us here.

Really, though you’ve gotta hand it to them, this is a masterful snow-job that lots of people will buy into, apparently including the CEO of Sierra Club Inc, Carl Pope. Amazing!

Sources:

World’s largest wind farm proposed by Pickens
June 13, 2007 by Chris Olsen in KVll

http://www.windaction.org/news/10126

The Pickens Plan
http://pickensplan.com

Wkipedia: Energy Use in the United States
http://en.wikipedia.org/wiki/Energy_use_in_the_United_States

Wikipedia: Wind Power
http://en.wikipedia.org/wiki/Wind_Power

Wikidedia: Oil Shale Extraction
http://en.wikipedia.org/wiki/Oil_shale_extraction

C-SPAN
http://c-span.org

Celebrating Freedom, Independence and Liberty

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This is modern day alchemy, change the lead in your right foot into gold in your pocketbook; simply observe ALL speed limits and never exceed 55 MPH to reduce consumption 20-50%.