WASHINGTON -- Boone Pickens likes to call it a "game changer,"
and the game he has in mind is a big one, the game for our global
energy security. Boone is the billionaire Texas oilman who years
ago warned that the price of oil will continue to go up, price
plateau by price plateau -- each plateau being higher and more
expensive for the American consumer. Sure the price of oil will
dip from its highs, but then it will go up again to a higher
plateau. As the years pass the price of oil has been climbing and
will continue to climb. That is because the supply of oil is
finite, and the demand is always growing. Worse, the United
States, which with only 4% of the world's population uses 25% of
the world's oil, has only 3% of the world's reserves and that is
being exhausted. We now depend on foreign oil for almost 70% of
our oil needs. Our suppliers are countries such as Iraq, Nigeria,
Saudi Arabia, Venezuela, and Russia, which is to say, countries
that are either unfriendly or unstable or both.
What is Boone's "game changer"? It is the NAT GAS Act of
2009 that now has bipartisan support in both houses of Congress
(S1408 in the Senate and HR 1835 in the House). Boone's Pickens
Plan, inaugurated a year ago for energy independence, advocates
all forms of energy production including wind and solar, but the
alternative to oil that he now stresses most is natural gas.
There have been breakthroughs in natural gas that make it
extremely economical and clean.
In the last few years natural gas has been found in
abundance in the United States. In fact, we have 2,000 trillion
cubic feet of natural gas reserves, mostly in Appalachia,
Arkansas, Louisiana, Oklahoma, and Texas -- more than twice the
amount of Saudi oil, enough to last us 100 years. Recent
innovations make it cleaner to burn and cheaper to use. It is the
only fuel that can replace diesel in semis and other heavy-duty
vehicles. Battery power will not work on these behemoths, nor
will ethanol.
The NAT GAS Act of 2009 that is pending before Congress
will extend and increase tax credits for natural gas and fueling.
The key clauses call for the orderly replacement of
diesel-powered 18 wheeler semis and other heavy-duty vehicles
with natural gas over a five to seven year period. That will
amount to a savings of 2.5 million barrels of oil a day. It will
cut our reliance on OPEC oil by 50%. This is why Boone calls it a
game changer. With our reliance on OPEC down by 50%, the oil
producers will have to negotiate with us for the price they
charge us for oil. Also, we will have a breathing spell during
which to find alternative sources of energy.
Searching for alternative energy sources is going to be
important in the future, which might be just around the corner.
The Indians and the Chinese are investing hundreds of billions in
renewable energy sources. The Russians and the Chinese are also
ensuring long-term supplies of conventional oil with their
investments and diplomacy. Both countries have recently entered
into deals with Venezuela to develop oil in that country's
Orinoco oil belt, Russia for $20 billion, China for $17 billion.
Worldwide the Chinese have $126 billion in deals for the
development and production of oil reserves.
The United States, says Pickens, has nothing like this in
the works: "We're watching a game we can't enter because we have
no team on the field." Even in terms of strategic reserves the
Chinese are catching up. We have 727 million barrels of oil in
reserve. They are on their way to meet and surpass us.
The good news is that this windfall of natural gas can buy
us time, and it is produced right here in America. Perhaps more
good news is that both the bills in the Senate and the House are
truly bipartisan. In the House 45 Republicans are co-sponsors,
with 42 Democrats as co-sponsors and Democrat Dan Boren as
sponsor. In the Senate the figures are two Republican co-sponsors
and one Democrat, with the Democrat Robert Menendez as sponsor.
That is a formidable array of support. The bad news is that these
bills are awaiting an end to the solons' wrangling over
healthcare. What we see is congressional legislation that cannot
fail to improve national security and energy independence lying
dead in the water while a dubious bill fraught with angry
disagreement and questionable consequences has center
stage.
topics:
Natural Gas
