Pickens' Natural-Gas Nonsense

By Steven Milloy
September 12, 2008, FoxNews.com

“Get this one,” says billionaire T. Boone Pickens in his latest TV ad, “Iran is changing its cars to natural gas and we’re not doing a thing here. They’re doing this to use less oil and sell it for $120 a barrel. We can switch our cars to natural gas and stop sending our dollars to foreign countries.”

Readers of this column know better than to take at face value the marketing of the so-called “Pickens Plan.”

So what’s the full story behind Iran’s move, and what would be the impact of switching our cars to natural gas?

Although Iran is a major oil and gas producer, it lacks oil-refining capacity and must import about 50 percent of its gasoline. To be less vulnerable to international pressure concerning its nuclear program, President Mahmoud Ahmadinejad decided to reduce Iran’s reliance on imported gasoline.

He started with rationing in May 2007. But that quickly led to violent social unrest.

Ahmadinejad then decided to convert Iran’s new car fleet to natural gas. So 60 percent of Iran’s car production this year — about 429,000 vehicles — will be dual-fuel-ready, capable of running on both gasoline and natural gas.

But contrary to Pickens assertion, Iran isn’t trying to use less oil:; It’s trying to use less imported gasoline — and only to thwart a possible international gasoline embargo.

Though hardly a role model for energy policy, should we nevertheless follow Iran’s lead with respect to natural-gas cars? Just what would that mean to you and to our economy?

While the natural gas sold for auto fuel is as much as 50 percent less expensive than gasoline — at least for now — the cover charge to get into a natural-gas vehicle can easily erase any savings.

A new natural-gas-powered car, such as the Honda Civic GX, for example, is almost 40 percent more expensive than a conventional Civic ($24,590 versus $17,700).

While tax credits can reduce the cost by thousands, somebody — either you and/or taxpayers — will be paying the difference.

If natural gas fuel saved you, say, $2 per gallon, then you’d have to drive 124,020 highway miles or 82,680 city miles to break even on fuel costs against the $6,890 purchase price premium.

You can convert an existing car from gasoline to natural gas, but the costs are daunting.

Converting a car to dual-use (as in Iran) costs between $6,000 to $10,000. Converting a car to run on natural gas only is about half as expensive.

Even so, the conversion has to be done correctly or, in the worst case, you risk leaks that could turn your car into an improvised explosive device. And if your car is altered without proof of EPA certification, you might not get any of the all-important conversion tax credits.

Then there’s the inconvenience. Though their fuel tanks are larger — which, incidentally, reduces trunk space — natural gas cars have less range.

While a new Honda Civic can go as far as 500 miles on a tank of gasoline, the GX’s range is less than half of that — and, currently, there are only about 1,600 natural-gas refueling stations across the country, compared with 200,000 gasoline stations.

If your home uses natural gas, you could buy a home filling station at a cost of about $2,000 plus installation. While home filling stations can further reduce fuel costs to substantially below $2 per gallon, the devices take about 4 hours to replenish the fuel consumed by only 50 miles of driving. So much for gas-and-go.

Moving past the personal expense and inconvenience, the broader implications of natural-gas cars are worrisome.

The U.S. currently uses about 23 trillion cubic feet of natural gas per year. Like all commodities, the price of natural gas is supply-and-demand dependent.

Switching just 10 percent of the U.S. car fleet to natural gas would dramatically increase our consumption of natural gas by about 8 percent (1.9 trillion cubic feet) — an amount that is slightly less than one-half of all current residential natural gas usage and one-quarter of all industrial usage.

The price ramifications of such a demand spike would likely be significant. The current cost advantage of natural gas over gasoline could easily be reversed. Our move toward energy independence could also be compromised.

Domestic production of natural gas has not kept pace with rapidly increasing demand. Consequently, about 15 percent of our natural gas must now be imported.

Without more domestic gas drilling, additional demand will need to be met with natural gas imported by pipeline and in liquefied form from the very same foreign sources that T. Boone Pickens rails about in the context of oil.

In its most recent annual outlook, the U.S. Department of Energy projects that the U.S. natural-gas market will become more integrated with natural-gas markets worldwide as the U.S. becomes more dependent on imported liquefied natural gas — causing greater uncertainty in future U.S. natural-gas prices.

The natural-gas supply problem will be additionally magnified if significant greenhouse-gas regulation is enacted.

Here’s how: Currently, when natural gas gets too expensive, electric utilities often substitute coal or cheaper fuels for power generation.

Under a greenhouse-gas regulation scheme, however, inexpensive coal might no longer be an alternative because of the significantly greater greenhouse-gas emissions involved with its combustion.

Utilities, and ultimately consumers, could easily find themselves at the mercy of natural-gas barons — like T. Boone Pickens himself, a large investor in natural gas.

Is that the real “Pickens Plan?”

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, and advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

Debunking Democrats on Drilling

By Steven Milloy
August 28, 2008, FoxNews.com

House Speaker Nancy Pelosi last Tuesday dismissively referred to pro-oil-drilling demonstrators chanting “Drill here! Drill now!” as the “2-cents-in-10-years-crowd.” She may have to revise her insult strategy, since it seems that some mere pro-drilling posturing by President Bush has already helped reduce the price of gas.

The “2-cents-in-10-years” slam refers to the anti-drilling environmentalists’ primary argument that even if we expanded domestic oil production, it would have only a marginal impact on gasoline prices far into the future.

Increased worldwide oil demand, a weak dollar and increased oil futures speculation are among the leading factors that have caused crude oil prices to rocket upward since last summer, reaching a peak of about $136 per barrel in mid-July. Since then, the price of oil has backed off to about $110 per barrel, a decline of almost 20 percent. Gasoline prices have also fallen from mid-July’s national average of $4.11 per gallon to late-August’s $3.73 — a decline of more than 9 percent.

Why have the prices of oil and gasoline declined so much since mid-July? It’s hard to know for sure, but let’s consider the factors that caused the price to spike in the first place.

Americans, who drive about 3 trillion miles per year, do seem to be driving less and reducing demand for gasoline, according to the latest figures from the Federal Highway Administration.

Americans drove 4.7 percent fewer miles in June 2008 than June 2007, and 53.7 billion fewer miles between November 2007 to June 2008 than over the same period a year earlier — a time when gasoline prices rose from $3.06 to $4.13. So if less driving leads to lower oil and gas prices, the data don’t show that relationship.

How about the dollar’s 8 percent rally against the Euro since mid-July? Historically, the relationship between the dollar and the Euro has been only weakly correlated with the price of oil. That is, higher-dollar/lower-Euro and lower-dollar/higher-Euro movements have correlated only about 20 percent of the time with decreases and increases, respectively, in the price of oil. Recently, however, this correlation has increased to 57 percent, indicating “a reasonably high level of common movement,” according to David Gaffen, who writes the Wall Street Journal’s Marketbeat blog. So it is possible that the dollar’s rise against the Euro may have helped reduce oil prices somewhat — but to what extent is unclear.

The remaining factor is oil futures speculation — which can be gauged by so-called “open interest” in crude oil, the number of futures contracts open on a given day. Since mid-July, crude oil open interest has declined by 100,000 contracts, a sign of heavy liquidation, the president of an energy risk management firm recently told the Associated Press.

So what happened in mid-July to cause oil speculators to bail out of oil? Could it have been Bush’s July 14 announcement that he was lifting the 1990 executive order barring the Department of Interior from issuing leasing rights to explore and drill for oil offshore? If Bush’s announcement was the trigger — and there doesn’t appear to be any other significant event during that time that might have caused speculators to rethink their positions — then it’s all the more remarkable since Bush’s action itself will not lead to more drilling or a major infusion of new supply.

Not only is there a separate moratorium on offshore drilling that Congress renews every year — and, so far, the Democrat-controlled Congress has given little indication that it is seriously considering lifting it — but there’s “only” an estimated 18 billion barrels of oil in the offshore areas subject to the leasing prohibitions. At current consumption rates of 7.5 billion barrels of oil annually, that’s less than a three-year supply of oil for the U.S.

Getting back to Pelosi’s derogatory “2-cents-in-10-years-crowd” comment, it seems as if it was debunked before she uttered it. Bush’s revocation of the executive order — which without similar congressional action amounts to little more than a political statement in favor of increasing the oil supply — has possibly already reduced the price of gasoline by 38 cents in 30 days.

The mere prospect that the U.S. might get serious about increasing the supply of oil has sent speculators scurrying for cover. Imagine what would happen if we actually explored, drilled and produced some of that offshore oil — which, by the way, could be way more than 18 billion barrels. The U.S. Minerals Management Service estimated in 2006 that the quantity of undiscovered technically recoverable oil in the outer continental shelf is between 66.6 to 115.3 billion barrels of oil.

In any event, even if the offshore drilling only reduced the price of oil 2 cents over 10 years, as Pelosi would have us believe, isn’t that better than the alternative her no-drill policy offers — ever-increasing prices?

As reported by Politico.com, Pelosi’s retort to the protesters’ chant was, “Right here? Can we drill your brains?” House Majority Leader Steny Hoyer then chided the protesters that “sophomoric chanting” won’t solve the energy crisis. That may be true as long as we allow petulant Democrats to run Congress and our energy future.

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, and advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

Environmentalists Prompt Nuclear Power Wake-Up Call

By Steven Milloy
August 14, 2008, FoxNews.com

What did the nuclear power industry get for playing footsie with the “greens” on global warming? A knife in the back, it looks like. The greens now are saying that emission-free nuclear power may actually contribute to climate change.

After decades of having its growth entirely stymied by anti-nuclear environmentalists, the industry decided to help the greens lobby for global warming regulation in hopes of easing opposition to the expansion of nuclear power. Companies like Exelon, FPL Group and NRG Energy, for example, helped the greens form the U.S. Climate Action Partnership (USCAP) — a coalition of big businesses and green groups that has been leading the charge on Capitol Hill for global warming regulation.

But as the saying goes, when you lie down with dogs, you get up with fleas.

A case in point is the proposed addition of a third reactor at the Calvert Cliffs Nuclear Power Plant in southern Maryland. The greens formed a group euphemistically called the Chesapeake Safe Energy Coalition (CSEC) to oppose the new reactor. Members of the CSEC are hardcore anti-nuclear activists including the Sierra Club, Public Citizen, Maryland Public Interest Research Group (PIRG), the Maryland Green Party and the Chesapeake Physicians for Social Responsibility.

A June 2007 report by Maryland PIRG lays out the standard anti-nuclear objections against the proposed reactor, including that nuclear plants are expensive to build, radiation is inherently dangerous, uranium mining is environmentally destructive, and that nuclear waste “remains dangerous for thousands of years and no nation on earth has developed an acceptable solution for safely disposing of it.”

But in this era of global warming hysteria, the standard arguments apparently aren’t working.

Maryland’s Gov. Martin O’Malley — who is well-regarded by environmentalists for consuming and metabolizing the green Kool-Aid on global warming — supports the Calvert Cliffs expansion. O’Malley apparently realizes that Maryland needs the electricity given the fact that the state is facing rolling blackouts on summer days starting as early as 2011. Moreover, nuclear power is emissions-free, another plus for Maryland’s warmer-in-chief. His support is even more remarkable since he recently barred the installation of wind turbines on public lands.

The governor’s picking nukes over wind must have sent the greens into meltdown. So in response, the desperate greens came up with a bizarre new argument: nuclear power causes global warming.

That’s right, nuclear is the latest form of “dirty” energy. How can that be, you ask? Nuclear power doesn’t produce greenhouse gases, does it? Well, not directly, the greens argue. But nuclear power “worsens climate change,” says prominent environmentalist Amory Lovins in a new paper, because it diverts money away from alternative energy and efficiency efforts that would otherwise reduce greenhouse gas emissions. Adding insult to injury, Lovins also says that nuclear power is “grossly uncompetitive, unneeded and obsolete” and “weakens electric reliability and national security.”

The head of Maryland PIRG picked up on Lovins’ line of thinking, telling Carbon Control News (Aug. 8) that “efficiency programs and renewables such as wind and solar can provide more carbon-abatement per dollar while avoiding the downsides of nuclear power.”

The movement to block the Calvert Cliffs plant also has an international component. Greenpeace has taken its anti-nuclear jihad to Flamanville, Finland, where a private utility company is currently building a European Pressurized Reactor (EPR) — a safer, more reliable and cheaper next-generation reactor. But Greenpeace has alleged technical and safety problems with the EPR and misconduct in the Finns’ safety approval process. Though the Finnish regulatory authority has rejected the misconduct claims, it nevertheless announced that it plans further studies on the EPR’s safety.

This, of course, has delighted the opponents of the Calvert Cliffs expansion since the reactor that has been proposed to be built is an EPR.

And the greens aren’t just going after the Calvert Cliffs plant, they are turning their sights on the entire nuclear industry. No doubt this is a direct result of the industry’s effort to expand in the wake of global warming hysteria, which has taken the form of more than 20 applications to the U.S. Nuclear Regulatory Agency for new plant licenses.

Lovins claims “the nuclear industry’s sales pitch is false” and that “the supposed nuclear revival is a carefully manufactured illusion that seeks to become a self-fulfilling prophecy.” The Natural Resources Defense Council has a “fact sheet” on its web site entitled “New Nuclear Power Plants Are Not a Solution for America’s Energy Needs.”

Environmental Defense ominously intones on its web site that, “Serious questions of safety, security, waste and proliferation surround the issue of nuclear power. Until these questions are resolved satisfactorily, Environmental Defense cannot support an expansion of nuclear generating capacity.”

The World Resources Institute says, “And while it can be argued that the actual risks of nuclear power are far lower than the perceived risks, and that coal-fired power plants have killed a far greater number of people than nuclear energy, most communities do not want nuclear plants nearby.”

While the nuclear industry has no reason to expect better treatment from activists like Lovins, shouldn’t it get at least a little friendly lip service from the Natural Resources Defense Council, Environmental Defense and the World Resources Institute — its lobbying partners in USCAP?Instead, these groups are happy to exploit the influence and resources of the likes of Exelon, FPL Group and NRG Energy to promote global warming regulation, but then feel no compunction about trying to tear down the partners it exploited.

Is the industry OK with such two-facedness? Will anyone complain or drop out of USCAP? We’ll see.

Meantime, it’s ironic and disturbing that the nuclear industry can figure out how to safely and productively harness the power of the atom, but it can’t figure out that lobbying with the enemy is a bad idea.

Steven Milloy, who publishes JunkScience.com and DemandDebate.com, is an advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

Pickens Gives New Meaning to 'Self-Government'

By Steven Milloy
July 31, 2008, FoxNews.com

The more you learn about T. Boone Pickens’ plan to switch America to wind power, the more you realize that he seems willing to say and do just about anything to make another billion or two.

This column previously discussed the plan’s technical and economic shortcomings and marketing ruses. Today, we’ll look into the diabolical machinations behind it.

Simply put, Pickens’ pitch is “embrace wind power to help break our ‘addiction’ to foreign oil.” There is, however, another intriguing component to Pickens’ plan that goes unmentioned in his TV commercials, media interviews and web site — water rights, which he owns more of than any other American.

Pickens hopes that his recent $100 million investment in 200,000 acres worth of groundwater rights in Roberts County, Texas, located over the Ogallala Aquifer, will earn him $1 billion. But there’s more to earning such a profit than simply acquiring the water. Rights-of-way must be purchased to install pipelines, and opposition from anti-development environmental groups must be overcome. Here’s where it gets interesting, according to information compiled by the Water Research Group, a small grassroots group focusing on local water issues in Texas.

Purchasing rights-of-way is often expensive and time-consuming — and what if landowners won’t sell? While private entities may be frustrated, governments can exercise eminent domain to compel sales. This is Pickens’ route of choice. But wait, you say, Pickens is not a government entity. How can he use eminent domain? Are you sitting down?

At Pickens’ behest, the Texas legislature changed state law to allow the two residents of an 8-acre parcel of land in Roberts County to vote to create a municipal water district, a government agency with eminent domain powers. Who were the voters? They were Pickens’ wife and the manager of Pickens’ nearby ranch. And who sits on the board of directors of this water district? They are the parcel’s three other non-resident landowners, all Pickens’ employees.

A member of a local water conservation board told Bloomberg News that, “[Pickens has] obtained the right of eminent domain like he was a big city. It’s supposed to be for the public good, not a private company.”

What’s this got to do with Pickens’ wind-power plan? Just as he needs pipelines to sell his water, he also needs transmission lines to sell his wind-generated power. Rights of way for transmission lines are also acquired through eminent domain — and, once again, the Texas legislature has come to Pickens’ aid.

Earlier this year, Texas changed its law to allow renewable energy projects (like Pickens’ wind farm) to obtain rights-of-way by piggybacking on a water district’s eminent domain power. So Pickens can now use his water district’s authority to also condemn land for his future wind farm’s transmission lines.

Who will pay for the rights-of-way and the transmission lines and pipelines? Thanks to another gift from Texas politicians, Pickens’ water district can sell tax-free, taxpayer-guaranteed municipal bonds to finance the $2.2 billion cost of the water pipeline. And then earlier this month, the Texas legislature voted to spend $4.93 billion for wind farm transmission lines. While Pickens has denied that this money is earmarked for him, he nevertheless is building the largest wind farm in the world.

Despite this legislative largesse, a fly in the ointment remains.

Although Pickens hopes to sell as much as $165 million worth of water annually to Dallas alone, no city in Texas has signed up yet — partly because they don’t yet need the water and partly because of resentment against water profiteering.

Enter the Sierra Club.

While Green groups support wind power, “the privatization of water is an entirely different thing,” says the Sierra Club. Moreover, the activist group has long opposed further exploitation of the very groundwater Pickens wants to use — the Ogallala Aquifer.

“The source of drinking water and irrigation for Plains residents from Nebraska to Texas, the Ogallala Aquifer is one of the world’s largest — as well as one of the most rapidly dissipating… If current irrigation practices continue, agribusiness will deplete the Ogallala Aquifer in the next century,” says the Sierra Club.

In March 2002, the Sierra Club opposed the construction of a slaughterhouse in Pampa, Texas, because it would require a mere 275 million gallons per year from the Ogallala Aquifer. Yet Pickens wants to sell 65 billion gallons of water per year — to Dallas alone. In a 2004 lamentation about local government facilitation of Pickens’ plan for the Ogallala, the Sierra Club slammed Pickens as a “junk bond dealer” who wanted to make “Blue Gold” from the Ogallala.

But while the Sierra Club can’t seem to do anything about Pickens’ influence with state legislators, they do have enough influence to make his water politically unpotable. This opposition may soon abate, however, now that Pickens has buddied up with Sierra Club president Carl Pope.

As noted last week, Pope now flies in Pickens’ private jet and publicly lauds him. The two are newly-minted “friends,” since Pope needs the famous Republican oilman to lend propaganda value to the Sierra Club’s anti-oil agenda and Pickens needs Pope to ease up on the Ogallala water opposition.

This alliance isn’t sitting well with everyone on the Left.

A TreeHugger.com writer recently observed, “… I am left asking myself why the green media have neglected [the water] aspect of Pickens’ wind-farm plans? Have we been so distracted by the prospect of Texas’ renewable energy portfolio growing by 4000 megawatts that we are willing to overlook some potentially dodgy aspects to the project?”

It shouldn’t sit well with the rest of us either. Pickens has gamed Texas for his own ends, and now he’s trying to game the rest of us, too. Worse, his gamesmanship includes lending his billionaire resources, prominent stature and feudal powers bestowed upon him by the Texas legislature to help the Greens gain control over the U.S. energy supply.

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, and advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

Is T. Boone Pickens 'Swiftboating' America?

By Steven Milloy
July 24, 2008, FoxNews.com

Liberals have done a U-turn on conservative billionaire oilman T. Boone Pickens.

Formerly reviled for funding the “Swift Boat Veterans for Truth” campaign against Sen. John Kerry, he’s now adored by the Left — unfortunately, for trying to gaslight the rest of us on energy policy.

This column recently spotlighted Pickens’ proposed plan to get America off foreign oil by substituting wind-generated electricity for natural gas-generated electricity and then using the natural gas to replace gasoline.

Already having addressed the proposal’s flaws — and Pickens’ plan to profit at taxpayer expense from it — let’s consider how Pickens’ marketing shades the truth.

On his Web site and in TV commercials, Pickens tries to frighten Americans about being “addicted to foreign oil.”

“In 1970, we imported 24 percent of our oil. Today, it’s nearly 70 percent and growing,” he intones.

Aside from the fact that the Department of Energy (DOE) puts the import figure at a more moderate 58 percent, Pickens gives the impression that imported oil is scary because it all comes from the unstable Mideast.

His TV commercials feature images of American soldiers fighting in Iraq and he likens the annual $700 billion cost of foreign oil to “four times the annual cost of the Iraq war.”

But hold the phone. Only 16 percent of our imported oil comes from the Persian Gulf — barely up from 13.6 percent in 1973, according to the DOE. Imports from OPEC countries are actually down — from 47.8 percent in 1973 to 44.5 percent in 2007.

Contrary to Pickens’ assertion that oil imports are growing, the DOE expects oil imports to decrease by 10 percent by 2030.

Pickens tries to shame Americans because, “America uses a lot of oil … That’s 25 percent of the world’s oil demand, used by just 4 percent of the world population.”

Some might think these figures make us sound greedy and wasteful.

But what Pickens omitted to mention is that the size of the U.S. economy in 2007 was about $13.8 trillion and the size of the global economy was $54.3 trillion.

This means that the U.S. economy represents about 25.4 percent of the global economy. So what’s the problem if a nation that produces 25 percent of the world’s goods and services needs 25 percent of the world’s oil output?

Would he prefer that we shrink our economy by 84 percent to match our share of world population?

Pickens plays the hope-squasher.

“Can’t we just produce more oil?” he asks. “The simple truth is that cheap and easy oil is gone,” he responds.

But there are hundreds of billions of barrels of oil in the form of oil tar sands and oil shale in North America, not to mention the more than one hundred billion barrels of oil in the outer continental shelf of the U.S. and on public lands like the Arctic National Wildlife Preserve (ANWR).

And don’t forget that coal-to-liquids technology can convert our 268 billion tons of coal into 20 times the nation’s current crude oil reserves, according to investment analysts. We have liquid fuels to burn.

While producing this oil may not be as easy as it was in 1859, when crude oil bubbled out of the ground in northwest Pennsylvania, it is much more feasible and far less expensive than Pickens’ fantasy of replicating the entire existing U.S. wind supply system every year for the next 15 years in addition to building the national infrastructure for natural-gas filling stations.

Finally, Pickens laments the $700 billion (less at current oil prices) “wealth transfer” from America to foreigners every year because of our “addiction.”

But is he also concerned about our “addiction” to other imports?

In 2007, the U.S. merchandise trade deficit — the difference between imports of goods from and exports of goods to foreign countries — exceeded $815 billion.

Contrary to Pickens’ demagoguery, “wealth transfer” is a term generally used in the context of estate planning, where money is simply “gifted” to heirs.

Our purchases of foreign oil, in contrast, are more reasonably known as “trade” — and trade is good.

Americans are not simply petro-junkies who mainline crude oil for the masochistic high of watching gas pump numbers spin faster. We produce goods and services with imported oil more than any other people on this planet.

Pickens’ bad-mouthing of our use of oil sounds like it comes from Al Gore and his fellow Democrats and extreme Greens — and guess who Pickens’ new friends are?

Pickens told the National Journal that, “I think I would be for Al Gore for energy czar [in an Obama administration].”

Pickens said that he and Gore agree on about 95 percent of their respective energy plans.

House Speaker Nancy Pelosi invited Pickens to speak before the Democratic Caucus.

Senate Majority Leader Harry Reid says that, while Pickens was once a “mortal enemy,” they are now friends because of the oilman’s conversion to alternative energy.

Then there’s Carl Pope, the head of the Sierra Club, who not only flies in Pickens’ private jet but writes paeans about him on the liberal Huffington Post blog.

“T. Boone Pickens is out to save America,” Pope wrote on July 3.

It would have been more accurate, perhaps, for Pope to write that “Pickens is out to make billions of dollars for himself and to save the Sierra Club’s anti-coal, anti-oil, anti-natural gas agenda.”

Lastly, the New York Times rhapsodized about Pickens in an editorial this week.

Pickens’ involvement in the alleged swiftboating of John Kerry seems to have been forgiven and forgotten by the paper. But the Times went absolutely over-the-top when it observed that the billionaire Pickens wasn’t in it for the money because “he doesn’t really need it.”

It’s too bad we can’t generate electricity from such hilarity, half-truths and hypocrisy. Pickens and his new friends could power us — as Buzz Lightyear might say — to infinity and beyond.

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

Conservation Nation?

By Steven Milloy
July 17, 2008, FoxNews.com

President Bush almost got it right this week when he declined to call on Americans to conserve energy. Sadly, he still seems to think that conservation is a win-win proposition; worse, so do both major presidential candidates.

A reporter, saying the energy debate will continue into the next administration, told President Bush that “one thing nobody debates is that if Americans use less energy the current supply/demand equation would improve. Why have you not sort of called on Americans to drive less and to turn down the thermostat?”

Bush responded: “They’re smart enough to figure out whether they’re going to drive less or not … it’s interesting what the price of gasoline has done, is it caused people to drive less. That’s why they want smaller cars, they want to conserve. But the consumer is plenty bright. … The marketplace works.

“Secondly, we have worked with Congress to change CAFE standards and had a mandatory alternative fuel requirement,” he continued. “One way to correct the imbalance is to save, is to conserve. … I talked about good conservation. And people can figure out whether they need to drive more or less; they can balance their own checkbooks.”

“But you don’t see the need to ask? You don’t see the value of your calling for a campaign?” the reporter persisted.

“I think people ought to conserve and be wise about how they use gasoline and energy … and there’s some easy steps people can take. You know, if they’re not in their home, they don’t keep their air-conditioning running,” Bush said, adding that “it’s a little presumptuous on my part to dictate to consumers how they live their lives.”

While muddled thinking thrives on both sides of this exchange — the current crisis is about $4-plus gasoline, not electricity, and while Bush says he won’t tell Americans to conserve, he still boasts of mandatory fuel efficiency standards — it should tee up the issue of conservation for debate.

The reporter positioned conservation as an indisputable virtue. But is it? Is conservation good public policy?

For individuals, conservation is better described as a “necessity” rather than a “virtue.” People use less gasoline not because they want to or because it makes them feel good or so that someone else can use more, but because prices have spiked and they’ve been forced to drive less or drive smaller cars. Need is not virtue.

Conservation also isn’t necessarily a virtue for those consumers who are unfazed by $4 gasoline, but nevertheless vainly choose to conserve to achieve some imagined “greater purpose,” such as “saving the planet” or “reducing our dependence on foreign oil.” This is, in fact, where conservation becomes, if anything, an anti-virtue.

In our modern society, using less gasoline means doing less and, most importantly, it means spending less. It means fewer shopping trips, less eating out, fewer pleasure trips and less employment in those businesses to where you drive.

It means fewer cars, pleasure boats and airplanes, and fewer jobs in the industries that manufacture those goods. Using less gasoline means engaging in less economic activity.

If you don’t remember the 1970s and very early 1980s, the last time conservation was all the rage, consider that every economic slowdown of the last 35 years, that is, the recessions of 1973-1975, 1979-1980, 1981-1982 and 1990-1991, has been associated with, if not caused by, a decline in oil consumption.

Whenever oil consumption increased, GDP did, too. The same goes for total energy consumption.

Additionally, conservation policies have undesirable side effects. Higher fuel efficiency standards result in lighter, more dangerous cars. Airtight, energy-efficient buildings — like the ones constructed during the 1970s — produced a host of indoor air quality problems such as “sick building syndrome” and asthma-causing cockroach allergens in public housing.

But if we keep burning more and more gasoline, won’t we run out or become even more dependent on foreign oil? That can only happen if we continue to permit the greens to dictate national energy policy.

Not only does the United States have vast reserves of oil offshore and on public lands, our Western state oil shale holds twice the oil as the Mideast. Although Canadian oil counts as “foreign oil,” our neighbor to the north is the Saudi Arabia of oil from tar sands.

There is plenty of oil at home and nearby that we can access to fuel vital economic growth — but the greens won’t let us.

But shouldn’t we conserve our oil resources for future generations?

Well, as Barack Obama might say — that is, if he could break away from the maximum security prison of green-think — “We are the generation that we’ve been waiting for.”

First, if the greens won’t let us use our oil now, why would they in the future? Won’t they always tell people to conserve or to wait for some fantasy alternative fuel or magical car battery?

Next, future generations are very likely to have improved energy technologies that are less or not at all dependent on oil.

Finally, if you think conservation will lead to less oil being used worldwide, think again. China, India and other rapidly developing countries plan to use all the oil they can get. If we don’t buy Canadian tar sands oil, India will buy it to fuel their $2,500 Tata cars.

If we don’t drill off the coast of Florida, others will, like the foreign oil companies working with Cuba.

Despite the self-defeating nature of conservation, both Sens. Obama and McCain are all for it. McCain calls it a “critical national goal.” Obama wants to give incentives for it.

These two ought to remember the sweater-wearing Jimmy Carter and think twice about promoting a national policy of malaise.

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

The Wind Cries 'Bailout!'

By Steven Milloy
July 10, 2008, FoxNews.com

Texas oilman T. Boone Pickens launched a media blitz this week to announce his plan for us “to escape the grip of foreign oil.” Now he’s got himself stuck between a crock and a wind farm.

Announced via TV commercials, media interviews, a July 9 Wall Street Journal op-ed and a Web site, Pickens wants to substitute wind power for the natural gas used to produce about 22 percent of our electricity and then to substitute natural gas for the conventional gasoline used to power vehicles.

Pickens claims this plan can be accomplished within 10 years, reduce our dependence on foreign oil, reduce the cost of transportation, create thousands of jobs, reduce our carbon footprint and “build a bridge to the future, giving us time to develop new technologies.”

It sounds great and gets even better, according to Pickens. Don’t sweat the cost, he says, “It will be accomplished solely through private investment with no new consumer or corporate taxes or government regulation.” What’s not to like?

First, it’s worth noting Pickens’ claim made in the op-ed that his plan requires no new government regulation. Two sentences later, however, he calls on Congress to “mandate” wind power and its subsidies. Next, Pickens relies on a 2008 Department of Energy study claiming the U.S. could generate 20 percent of its electricity from wind by 2030.

Setting aside the fact that the report was produced in consultation with the wind industry, the 20-by-2030 goal is quite fanciful.

Even if wind technology significantly improves, electrical transmission systems (how electricity gets from the power source to you) are greatly expanded and environmental obstacles (such as environmentalists who protest wind turbines as eyesores and bird-killing machines) can be overcome, the viability of wind power depends on where, when and how strong the wind blows — none of which is predictable.

Wind farm-siting depends on the long-term forecasting of wind patterns, but climate is always changing. When it comes to wind power, it is not simply “build it and the wind will come.” Even the momentary loss of wind can be a problem. As Reuters reported on Feb. 27, “Loss of wind causes Texas power grid emergency.”

The electric grid operator was forced to curtail 1,100 megawatts of power to customers within 10 minutes. Wind isn’t a standalone power source. It needs a Plan B for when the wind “just don’t blow.”

This contrasts with coal- or gas-fired electrical power, which can be produced on demand and as needed. A great benefit of modern technology is that it liberates us from Mother Nature’s harsh whims. Pickens wants to re-enslave us with 12th century technology.

Then there’s the cost of the 20-by-2030 goal — $43 billion more than the cost of non-wind assets, according to the DOE — and this doesn’t include many billions of dollars more for additional transmission lines. Could the 20-by-2030 goal even be accomplished?

According to Electric Utility Week on June 9, a DOE official informed attendees at a June wind industry meeting that reaching the goal would entail replicating the entire existing U.S. wind system (about 17,000 megawatts of capacity constructed over the past decade) every year starting in 2018.

What about Pickens’ plan to shift us into natural gas vehicles? Well, they cost a lot more: an extra $3,000 to $6,000 for cars and $30,000 to $40,000 for buses and trucks. There are only about 1,300 natural gas refueling stations in the U.S., as compared with about 180,000 conventional gas stations — that’s a lot of infrastructure to build and finance. Will Pickens’ plan reduce our dependence on foreign oil? Doubtful.

Even if the fleet of natural gas-powered vehicles is enlarged, the bulk of existing and new vehicles will continue to depend for the foreseeable future on gasoline. Americans own about 260 million vehicles, a total that grows by more than 3 million vehicles every year.

Turnover is low as about 60 percent are owned for more than seven years. Besides, as demand for natural gas increases, so will prices. In the Washington, D.C., area, natural gas is already about two-thirds as costly as gasoline — and that’s with hardly any demand.

None of these facts and circumstances are new to Pickens. So what’s up with him?

Not only does Pickens’ firm, BP capital, have significant investments in natural gas, but last June he announced plans to build the world’s largest wind farm in west Texas, capable of producing 4,000 megawatts of electricity.

The federal government subsidizes wind farm operators with a tax credit worth 1.9 cents per kilowatt hour — potentially making for a tidy annual taxpayer gift to Pickens based on his anticipated capacity. But all is not well in Wind Subsidy-land.

Since Congress didn’t renew the wind subsidy as part of the 2007 energy bill, it will expire at the end of this year unless reauthorized. Subsidies are perhaps more important to the wind industry than wind itself. Without them, wind can’t compete against fossil fuel-generated power.

As pointed out by the Atlanta Journal-Constitution on July 9, “In 1999, 2001 and 2003, when Congress temporarily killed the credits, the number of new turbines dropped dramatically.”

It’s little wonder that Pickens is waging a $58 million PR campaign to promote his plan. If it works, his short-term gain will be saving the tax credit and his wind farm investment.

In the long-term, he stands to line his already overflowing pockets with hard-earned taxpayer dollars. What will the rest of us get from this T. Boone-doggle? That’s anybody’s guess, but it probably won’t be cheaper energy, energy independence or a cleaner environment.

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

Carbon Offsets — Buyer Beware

By Steven Milloy
July 19, 2007, FoxNews.com

Congress began investigating the carbon offset industry this week. The inquiry could produce some “inconvenient truths” for Al Gore and the nascent offset industry.

Carbon offsets ostensibly allow buyers to expunge their consciences of the new eco-sin of using energy derived from fossil fuels. Worried about the 8 tons of carbon dioxide (CO2) emitted each year by your SUV? Similar to the indulgences offered by Pope Leo X in the 16th century, you can absolve yourself of sin by purchasing $96 worth of CO2 offsets – typically offered at $12 per ton of CO2 emitted – from offset brokers who, in turn, supposedly use your cash to pay someone else to produce electricity with low or no CO2 emissions.

Last year, offsets representing 23.7 million tons of CO2 were sold to businesses and consumers. Sounds like a lot of CO2 emissions were avoided, except when you consider that annual natural emissions of CO2 amount to hundreds of billions of tons.

The physical world aside, the CO2 offset marketplace itself is questionable – hence this week’s congressional hearing entitled, “Voluntary Carbon Offsets: Getting What You Pay For.” The hearing is particularly notable since it was called by a Democrat-run Congress, concerned that global warming alarmism is being jeopardized by dubious marketing and consumer rip-offs involving offsets.

A prime example of dubious offset marketing involves Al Gore’s movie, “An Inconvenient Truth.”

The movie’s producers, Paramount Classics and Participant Productions, announced that they purchased offsets from broker NativeEnergy to compensate for 100 percent of the CO2 emissions from the air and ground transportation, hotel use, and production and promotional activities associated with the movie.

So how many offsets supposedly compensated for the CO2 sins of Al Gore and the dozens of individuals credited with producing a movie shot in Nashville, Los Angeles, and Beijing? According to a Web site release from NativeEnergy – which has since been removed – it only cost 40 tons of offsets (worth about $480) to make “An Inconvenient Truth” carbon neutral.

It’s an absurdly low figure given that the making of a 30-second television commercial can easily produce 50 tons and the movie “Syriana” – another NativeEnergy project – was supposedly offset with 2,040 tons worth of offsets.

When I called NativeEnergy to inquire about the 40-ton figure and the Web page that mysteriously disappeared, I was rebuffed and told that the company “does not share information about its clients without their consent.” This immediately made me wonder why the producers of “An Inconvenient Truth” either withheld or revoked their consent since so many of NativeEnergy’s other clients’ offset purchases are so prominently touted on the company’s web site.

NativeEnergy told me I would have to go through Paramount’s legal department to obtain the necessary consent. Despite repeated attempts, Paramount never returned my calls – quite odd given the Oscar-winning producers’ mission and audacious self-acclaim of pioneer status as the world’s first carbon-neutral documentary.

NativeEnergy still boasts on its web site about offsetting “100 percent of the carbon dioxide pollution” associated with “An Inconvenient Truth” – but there’s still no mention – let alone any “carbon accounting” – of what that “100 percent” actually represents.

There is reason to explore this issue further than just the spotlighting of more Al Gore-related hypocrisy – the climate alarmist community is even concerned about the offset racket.

As recently reported on the left-wing web site Grist.org (http://gristmill.grist.org/story/2007/6/19/123649/857), it’s worthwhile asking whether carbon offsets are offsetting anything at all.

According to the Grist article, NativeEnergy is selling offsets that are supposed to be helping to pay for wind-generated electricity supplied by the Alaska Village Electric Cooperative (AVEC) to 52 Alaskan villages.

When the Grist reporter first interviewed an AVEC official, the money received from NativeEnergy was described as a “bonus” – a potential problem given that the agreement between AVEC and NativeEnergy requires that the offsets are “a significant contributor to economic viability and the seller’s efforts to build additional wind capacity.” AVEC and NativeEnergy have since backed off the “bonus” characterization, according to the Grist article.

While acknowledging the possibility of a slip of the tongue on the part of the AVEC official, the Grist reporter raised the salient point – presumably because of the black box-nature of CO2 offsets – that we will never actually know whether the offsets purchased through NativeEnergy were used to produce any wind power or reduce any CO2 emissions.

NativeEnergy sells offsets to the public at a cost of $12/ton. But how much of that price goes to reduce CO2 emissions versus NativeEnergy’s pockets? A recent CNNMoney article reported that NativeEnergy raised $250,000 to pay for 50,000 tons of CO2 reductions on South Dakota’s Rosebud Sioux tribe reservation – that is, as little as $5/ton may go toward emissions reduction.

A gross profit margin of $7/ton for NativeEnergy is not bad, especially since there appears to be little follow-up and verification as to whether the consumer’s goal of reducing CO2 emissions are actually accomplished.

Finally, taxpayers provide additional support for projects in which NativeEnergy is involved – the Department of Energy contributed more than $448,000 to the Rosebud Sioux project. The U.S. Department of Agriculture gave AVEC $2.5 million for wind turbines. A Capitol Hill staffer told me that the congressional inquiry would look into the possibility of “double-dipping” in the offset industry.

There’s an awful lot of consumer and taxpayer money flying around offset-related projects with little, if any, accountability. On one hand, it’s good that Congress, in the name of consumer protection, has commenced an investigation of “the efficacy and accounting of these unregulated commodities.” On the other hand, only time will tell if a Congress controlled by the global warming lobby will conduct a bona fide investigation that risks discrediting one of its major themes.

Steven Milloy publishes JunkScience.com and CSRWatch.com. He is a junk science expert, an advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.

Must-See Global Warming TV

By Steven Milloy
March 19, 2007, FoxNews.com

As Al Gore’s movie “An Inconvenient Truth” becomes mandatory viewing for many U.S. school children and nears becoming the “official truth” about global warming, it comes as most welcome news that an absolutely gripping film rebuttal has made its international debut, much to the chagrin of true believers in man-made climate change. Continue reading Must-See Global Warming TV