Liveblog of Pickens on Hannity Show II

4:08 PM: Sean announces T. Boone to be on in the next hour. Supposedly to talk oil prices and how oil is jeopardizing our national and economic security. $700 billion has to come up, even if the oil price isn’t anywhere NEAR what is needed for $700 billion.

6:20 PM: AARGH! Stupid WIS radio! I just realized that I’ve been listening to a looped version of the first hour! So that means no liveblog. But I’ll try to see if I can find a clip of the broadcast and analyze that. But because Hannity’s website sucks, I doubt I’ll be able to find this…

T. Boone to Appear on Hannity TODAY

I only got wind of this at the top of Hannity’s show, but T. Boone Pickens is to appear on the Sean Hannity Show. You can listen to your local station or go to the local Columbia webcast here:

http://www.wisradio.com/article.asp?id=507137

I will be liveblogging this, just like I did last time. We’ll see if anything changes.

Review of Pickens on Leno

You can see the video here:

http://www.nbc.com/The_Tonight_Show_with_Jay_Leno/video/episodes/#vid=648021

Skip to the 35:00 mark, that’s when he stops doing his old man impression and gets to the Pickens Plan.

And of course, he started with the $700 billion lie, just like I thought he would. He said that he did the analysis ($700 billion and 70% of consumed oil is foreign) then went with his plan. If the analysis is wrong, which it is, what does that say about his plan?

Then he asserts that we (The US) is paying for both sides of the war, but doesn’t specify which war (Iraq? Afghanistan? On Terror?).

Then he states that the OPEC countries had revenues of $250 billion and now that’s $1.25 trillion. I’ll have to check that out in a bit to see if that’s correct or not.

Then he says “If you want to see where your money is going, go over to the middle east and look at those buildings.” Which contradicts his assertion that oil money is funding terrorism. If oil money is funding terrorism, then it’s not going to building Dubai. I’m pretty sure that terrorists, at least of the fundamentalist Islamic type, do not like Dubai, but they don’t bomb it because they’re Arabs and that would put a pretty big negative on their public opinion. It’s easy to stay popular if you’re attacking a foreigner, it’s less so if you’re attacking someone who looks and speaks like you. But that’s a different story that T. Boone isn’t going try and catch up.

But then he says that he “doesn’t criticize them, but that we’re to blame for the fix we’re in.” Which is a pretty big paradox he sets up. Does he think we’re funding terrorists through the middle east countries we import oil from? Or does he think that there’s nothing wrong with what the Middle East is spending their money on? But you can’t get both ways there.

He then goes into the plan where he says that we have an abundance of natural gas and his usual “it’s cheaper, cleaner and ours” routine he’s done many times before. They get into a little banter about how the US is the Saudi Arabia of natural gas, which is true. He doesn’t mention that there are other countries that have alot more natural gas than we do. What happens when the US runs out of our reserves?

The discussion then turns to municipal bus fleets, and T. Boone uses the opportunity to go after Dallas for considering to run their buses on diesel, about which he says that “clean diesel” is an oxymoron. Jay then compares using diesel like a drug dealer, where they give you the price low and then raise the price later. T. Boone agrees with that analogy.

And again, Pickens is wrong. It’s natural gas that’s historically “cheap”, though rising in cost along with gas. Here’s why. Oil is already been priced high, because we’re already using it as the main transportation fuel. If Dallas is struggling with the decision, already knowing that diesel has already hit the $5 a gallon mark, then what is it going to go from here? However, natural gas is increasing in usage and the price is where it is right now. But what happens in the future (which is what this discussion is all about) is when the Pickens Plan is implemented and everyone switches to natural gas? The price increases much more than diesel, which people switch away from. So it’s actually natural gas that’s like the drug. Which makes Pickens the drug dealer, in this analogy.

He then tops it off with a threat to move to Fort Worth because their fleet runs on natural gas. I’ll believe that when I see it.

Jay then mentions that it’s easy to convert cars to natural gas, though I don’t see anything in a cursory search of the internet that suggests easy (and this isn’t “change the oil” easy, we’re talking “replace the transmission”). 98% of car owners aren’t going to be able to do this themselves, which is more of a sign of the complexity of the situation than anything else.

But then T. Boone has the revealing moment of the interview. He states that “he’s focused on trucks” and gives some statistics on that. What he doesn’t mention that is that the reason he’s interested is because he has a giant financial stake in getting trucks to run on natural gas. He’s on the board of directors of Clean Energy Fuels Corp, a supplier of natural gas to fleet vehicles (trucks). If he can get his plan to focus on trucks, then his company can see a large increase in demand for his services.

And lo and behold, he’s mentioned countless times that he wants the federal government to FORCE fleet vehicles to run on natural gas. In fact, at the 38:41 mark, he almost lets this cat out of the bag. He says:

I want those trucks. And I want the government, and I want the administration coming in to—you know, I started this on July the 8th.

See, he almost said what he wanted to do was force companies to use natural gas. I’m sure it’s just a coincidence that servicing fleet vehicles is EXACTLY what his company does. No politicking there at all, no financial benefit to him personally. Nope, not at all.

They wrap up by Jay mentioning that it’s about a $1.50 a gallon to fill up natural gas. This might be true… if you live in Utah or Oklahoma. (It’s no coincidence that these are two major producing areas in the US). Otherwise, you’re seeing above $2 per unit.

And he ends up with a prediction of $200-300 a barrel of oil if we continue with our current consumption. Considering that we haven’t even reached his prediction of $150 a barrel that he said we’d reach this summer, I’d take this with a bit of a grain of salt.

He also never got around to covering the wind part of his plan, but that part also has as many holes in it as his natural gas plan. So it’s probably best not to take up more time, but he did run long on the natural gas part.

So overall, he used his folksy style to cover up a bunch of lies and self-interest for the show. And the worse part is that he probably wasn’t very entertaining to boot. But we’ll see if his book promotion tour brings up any interest in his plan or not.

Pickens On Leno Tonight

T. Boone Pickens will be appearing on Jay Leno tonight.

I can guarantee that he will trot out the $700 billion lie. And nobody will care, as usual.

Leno is a car guy, so it’ll be interesting to see what his response to all this will be. But I’m pretty sure that Pickens’ populist shtick won’t be questioned at all. No surprise there. But I’ll review the show tomorrow once I see it. Because since I actually work for a living, I need to get sleep and I’m not interested in staying up till midnight or later to see this appearance.

Plus, he’s appearing with Matthew McConaughey, so there’s an oddball pairing if I’ve ever heard one.

The Energy Deficit and the Pickens Plan

This graphic is from the EIA in their energy brief on energy subsidies:

From this graph, we consume more energy (blue line) than we produce domestically (red line). The difference between the two is how much we have to import to balance the books, so to speak. This deficit amounts to about 30% of all energy consumed on a yearly basis.

The question now goes to those who want the US to become “energy independent”. How do you get those two lines to converge. You have to either bring down consumption, increase production or end up with a combination of the two. But if you don’t, then you’re still going to be importing energy. That’s the bottom line.

This is the elephant in the room for the Pickens Plan. Right now, the plan is to shift consumption sources around, from oil to natural gas in road transportation and from natural gas to wind in electricity. But shifting the production resources doesn’t address the fundamental imbalance between demand and supply. The difference will still need to be made up, and the Pickens Plan doesn’t do that at all. He’s just playing Three Card Monte with energy.

But one argument would be: yeah, but we’re reducing our imports of oil, so that’s something. But something will have to replace it if you don’t increase energy production by 30%. That is not the goal of the Pickens Plan, so there will still be energy imports even if the Pickens Plan is implemented.

But we have to make sure those dirty Arabs and other terrorist nations don’t get any American oil money, even if we end up buying their natural gas, uranium and other energy sources, which then means that the Pickens Plan will accomplish nothing. Well, except put money in Pickens’ pocket.

How much land would be needed for the Pickens Plan to work?

But let’s give the benefit of the doubt to Pickens and say that wind could make up the difference. How many windmills and land would be needed for it to work?

From the graph in my previous post, we have a power deficit of 300,000,000,000,000,000 British Thermal Units. This converted to kilowatt hours is 87 921 325 000 000 kWh. You need to get capacity to figure out how much space is needed, which is in units of kilowatts so you divide by the number of hours in a year, specifically 8420. That means you need to have 10441962589 kW of capacity to get this much power in a year.

But wind turbines don’t run 24 hours a day, in fact, they only run about 33 to 50% of the time, so you actually need double the capacity, AT BEST, to get the capacity needed. So you really need 20883925178 kW to supply the power importation needs for the US.

How much land would this require? For that I went here and used their calculator. The end results:

To get the US off foreign energy, we would need 41,767,850 turbines, which would cover 10,441,962.5 acres. This is also 16316 square miles. Or nearly the size of Vermont and New Hampshire COMBINED. And this is just for the physical items of turbines themselves.

Using a different method, a rule of thumb is that one square kilometer can support 10 to 15 MW of capacity. So using the figure above, we’d get 20883925 MW. So dividing by the best case scenario of 15 MW per square km, we get 1392262 sq. km or 537555 square miles. This is approximately the size of Texas, Oklahoma, Kansas, Nebraska and half of South Dakota, including urban areas, highways, mountains, and water.

So when T. Boone says that the Great Plains is the Saudi Arabia of wind, you better believe it because if we’re going to use wind to get the US energy independent, the Great Plains will become one giant wind farm.

And this is under a BEST case scenario. Just for fun, lets use the lower end of the power estimates (under the cut):

How Much Does the Government Spend on Energy Subsidies?

Thanks to the Energy Information Agency, I get little email every once and a while alerting me to when they have produced something called “Energy in Brief.” So this week, I got one in the email called:

“How much does the Government spend on energy-specific subsidies and support?”

Jackpot.

And the answer to this question: $16.6 billion just in the past year. To put that in pork perspective, that’s 45 to 60 Bridges to Nowhere, depending on which figure you use (total price of bridge to nowhere or just the famous 2005 earmark). That’s right, we can connect 45 to 60 small towns with their airports for just how much the government gives out for energy.

And what does the government do with this money? Not much, by the EIA’s own accounting:

Have Subsidies Affected Prices or Production?

Between 1999 and 2007, the average real price of total energy per British thermal unit (Btu)3 consumed increased more than 80%. Meanwhile, total energy consumption or demand, including imports, grew by about 5%. Most subsidies and support to energy producers should stimulate supply; so too should higher prices and rising energy demand. Yet in 2007, the United States supplied roughly 72 quadrillion Btu from domestic resources, about the same amount as in 1999. This leaves the impression that energy subsidies had little effect on net domestic production other than to help prevent further declines. But the enactment of various production-oriented tax incentives in the Energy Policy Act of 2005 and subsequent legislation may have contributed to the slight increase in primary energy production over the last two years.

So as a result of billions of dollars in subsidies and tax incentives, the US might have had a slight increase in energy production. At least with the 45 to 60 Bridges to Nowhere, we would have ACTUAL BRIDGES, not possible things that people would be hard pressed to identify.

You’d think that because of T. Boone Pickens’ ad campaigns that we don’t do anything to support wind energy right now. And, like most things T. Boone Pickens says, this is pretty wrong. Again from the EIA:

Did You Know?
The estimated value of production tax credits to wind producers in FY 2007 was $666 million. The benefit was distributed over an estimated 27.7 million megawatthours, making wind power the largest beneficiary of production tax credits among all renewable technologies.

And this doesn’t even include other incentives given to wind producers that AREN’T tax credits, like direct subsidies. And this doesn’t even take into consideration that wind power DOESN’T produce much energy. So the per unit cost is an astronomical $.02/per kilowatt-hour. Considering that your energy bill is anywhere from $.08 to $.20 / kWh per unit, wind gets a subsidy that’s equal to 10 to 25% of your per unit costs. That sounds like it’s doing a whale of a job.

But believe it or not, wind ISN’T even the worse offender when it comes to government largess. That would be “clean coal”, which gets $2 billion to produce a tiny fraction of the energy in the US. But once again, clean coal and coal-to-liquids have huge backers in the Senate in the form of Robert Byrd and Mitch McConnell. And that’s money that’s not doing a lick of good.

So before we start heaping MORE money on renewables, a la the Pickens Plan, we should look to see what works and what doesn’t. Right now, wind and solar aren’t.

Pickens Continues to Use $700 Billion Myth

From a Cato Institute Blog Post by Will Wilkinson:

Pickens: It’s more than me. I mean, this is about America. This isn’t about Boone Pickens and whether Pickens’ wind farm makes money or whatever happens to it. But I mean, here with $700 billion going out of the country, and let’s say that we could cut it in half — $350 billion in the United States, can you imagine how that would multiply for jobs here. I’d much rather that gonna $350 billion was being used here than to give some for foreign oil.

As I’ve stated before, $700 billion is a falsehood. In fact, all we’ve done in the past is import $320 billion or so, and given current oil prices, are on track for something in that neighborhood, say $400 billion. So even if we do NOTHING, we’ll get to that $350 billion number that Pickens would “like to see happen.”

Here’s another issue with this argument. Lets say the Pickens Plan is successful and it cuts down on oil imports by half (to $150 billion, not $350 billion). He says that all that money would be going towards American jobs. Yes, but at what cost? That’s something that Pickens does not address at all (nor has anyone else for that matter). If it costs $150 billion in tax incentives, infrastructure and whatever else is needed to get his plan off the ground, then it’s a wash. Sure some workers are happy, but consumers are left in the cold. And that’s if his plan works exactly as he thinks it will. As I’ve pointed out before, on both transportation and electricity, that’s far from a given. But this is the point that Will makes rather well in his post.

But I’m glad that at least more people are starting to call out Pickens on his economically illiterate thinking.

I also recommend the Cato@Liberty blog as an excellent resource or non-partisan thinking on political and economic matters.

John McCain Uses the Pickens Lie

From John McCain’s acceptance speech last night:

My fellow Americans, when I’m President, we’re going to embark on the most ambitious national project in decades. We are going to stop sending $700 billion a year to countries that don’t like us very much. We will attack the problem on every front. We will produce more energy at home. We will drill new wells offshore, and we’ll drill them now. We will build more nuclear power plants. We will develop clean coal technology. We will increase the use of wind, tide, solar and natural gas. We will encourage the development and use of flex fuel, hybrid and electric automobiles. (Emphasis added)

I’ve documented the fact that $700 billion is a bald-faced, economically illiterate number that was conjured up by T. Boone that has no basis on the realities of the oil market or just plain facts. Add to the fact that McCain just lumped natural gas in with solar and wind (“one of these things is not like the other, one of these things is just not the same”), and T. Boone must have been jumping for joy with the speech last night. I’m sure one of the first things McCain will reach across the aisle to Nancy Pelosi is to force private fleet vehicles to run on natural gas.

So if you oppose the Pickens Plan, or don’t like the fact that it’s based on sketchy numbers, has a significant chance of screwing up our electricity market and backed by someone who has a huge financial stake in it, then you don’t have a choice in the election. Well you do, but you won’t hear about it in the media.

I would call on John McCain’s campaign to fully disclose their relationship with T. Boone and fess up to the fact that he cited a horribly incorrect number during a nationally televised speech. It’s the least that he can do “for the country.” But I doubt that will happen.

McCain Invents New Constitutional Power

Again, from John McCain’s acceptance speech:

We need to change the way government does almost everything: from the way we protect our security to the way we compete in the world economy; from the way we respond to disasters to the way we fuel our transportation network; from the way we train our workers to the way we educate our children. All these functions of government were designed before the rise of the global economy, the information technology revolution and the end of the Cold War. We have to catch up to history, and we have to change the way we do business in Washington.

I must’ve missed that part of the Constitution where it says that the government sets the standards for transportation fuel. Yes, yes, I know I’m in a minority opinion, where the Supreme Court has given the federal government carte blanche to do whatever it wants with the economy. Of course, no one has opposed the ethanol mandates, or the EPA gasoline/diesel requirements yet either, at least not successfully. Of course, as a nation, we have long accepted federal limits on economic freedom. Perhaps when you’re required to trade in your gasoline powered car for a T. Boone special, you might make a peep, or not.

Regardless, this is just another way that McCain is letting everyone know that he’s going to be fulfilling the Pickens Plan when he gets into office. He just doesn’t want to say it so directly. So much for that openness and accountability that he’s running on.