I haven’t always been a supporter of former President Jimmy Carter’s politics, but I did vote for him, mainly because we shared the Navy experience and he was educated as an engineer. His later opposition to nuclear power surprised many of us in the power business at the time, and I found his suggestion to wear a sweater instead of pushing up the thermostat quaint. My view of his politics hasn’t changed, but I remain a fan of the man, especially his work with Habitat for Humanity.
We weren’t listening
Carter delivered his now-famous national energy policy speech on April 18, 1977. “With the exception of preventing war,” he said, “this [energy crisis] is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.” Carter continued: “It is a problem we will not solve in the next few years, and it is likely to get progressively worse through the rest of this century.” In 1970 we were importing 24% of the oil we used, but by the time of Carter’s speech, the U.S. imported almost 48%.
Carter then gave us our medicine: “Many of these proposals will be unpopular. Some will cause you to put up with inconveniences and to make sacrifices. The most important thing about these proposals is that the alternative may be a national catastrophe. Further delay can affect our strength and our power as a nation.”
The Straight Talk Express and Mr. Change could learn from Carter how to unambiguously define the current situation, no matter how unpalatable that might be. But I’m not optimistic that will happen, as no politician wants to deliver bad news to voters on the eve of a close election.
Carter’s problem wasn’t with his energy plan but with its delivery: He couldn’t sell it to the American people because they believed the cure was worse than the disease. Not so today. Four-dollar-a-gallon gasoline has shocked us out of apathy, and energy policy now has our undivided attention. In 2008 we will import 70% of the oil we use.
The right idea
T. Boone Pickens, that irrepressible Oklahoma oil man, made his billions the old-fashioned way: identifying undervalued energy companies and playing “let’s make a deal” with them. Wall Street once painted the “Oracle of Oil” as just another corporate raider—a charge he doesn’t deny. What isn’t well-known is his penchant for philanthropy; Pickens has donated over half a billion dollars to several universities and other causes, most over the past five years. Even at 80 years old, Pickens is a man of enormous financial means who isn’t afraid to spend some of that money, or even a lot of it, on causes that are important to him.
Pickens has stolen this election year’s energy policy center stage with a plan that is eloquent in its simplicity. The Pickens Plan correctly points out that natural gas is the only fuel available in quantity that can be used as substitute transportation fuel. It also notes that the Great Plains—from the Texas panhandle to North Dakota—have the wind resources to produce 20% of our nation’s electrical energy at a cost Pickens estimates as $1 trillion (plus another $200 billion for the wires). The plan’s third point is that we generate about 20% of our electricity in plants fueled by natural gas. The core of the plan is to use wind power to replace gas-fired generation and then use the natural gas for transportation fuel to reduce oil imports.
Show me the money
Pickens’ altruism, however, is tempered by the lure of a good business deal. His current project is a 4,000-MW wind farm in the Texas panhandle estimated to cost $10 billion. In a recent interview published in Fast Company, the oilman was asked if his plan was about money or the environment. Not mincing his words, he responded, “Money!”
“I’m also a good environmentalist,” Pickens said, “But I’m not going to do a 4,000 MW wind farm for the environment first and money second.”
What a breath of fresh air—capitalism is still alive and well. When asked about his expected return on this project, Pickens replied, “A minimum of 15%. It’ll probably be closer to 25%.” And not a nickel in taxpayer money is needed.
Pickens’ grassroots approach is rapidly gaining momentum, and he believes his “army” of supporters will exert enough pressure to convince the next administration to adopt his plan. Pickens is drawing plenty of attention with more than 100,000 hits a day on his web site (www.pickensplan.com), a growing number of TV ads, and appearances on the talk show circuit. I would not be surprised if either or both of the presumptive presidential candidates adopt the Pickens Plan as the centerpiece of a comprehensive energy plan by the time you read these comments.
I also hope the candidates endorse additional off-shore drilling, flex-fuel cars, additional nuclear plant construction, and more clean coal plants, such as Wisconsin Public Service Corp.’s Weston 4 —the subject of this issue’s cover story.
Here is my suggestion to Pickens: Open up a fund that accepts individual investor contributions to these projects, and millions of people will be involved on an intensely personal level. Then you’ll have a real energy policy revolution on your hands.