The following op-ed by T. Boone Pickens ran in the Evansville Courier-Press on Saturday, March 30, 2013.
Few states have a bigger stake in the potential transition from imported diesel to domestic natural gas than Indiana. Given the amount of over-the-road truck traffic that passes through the state, a reduction in pollution and costs for truckers will be a significant economic and social benefit for all Hoosiers.
Hydraulic fracturing, in what is known as the New Albany Shale Gas Play, is creating real, permanent jobs.
Everyone talks about a free market in energy. It’s as if we are wearing blinders on both the state and federal level. We keep listening to free market zealots to guide our energy policies when, in fact, there is no free market in energy. All we need do is look at OPEC.
The cost of OPEC oil is astronomical in its impact on national security, the state and national economy and the environment.
OPEC is a cartel that controls the global price of oil by manipulating the amount available.
Since October, Saudi Arabia has sharply cut production to keep prices up. In essence, the $4 per gallon you are paying for gasoline at the corner station is helping fund the Saudis’ domestic programs.
The OPEC nations are just the largest part of the equation. Seventy percent of the world’s oil supply is controlled by state-owned entities. Here in the United States constantly changing laws, rules, tax policy, and regulations — new CAFE (Corporate Average Fuel Economy) standards are the latest example — are just as manipulative.
If we want to break the back of the OPEC cartel, there are two free market-focused approaches that make sense.
First, we need to inject serious fuel competition into the transportation fuel mix. Transportation in America accounts for two-thirds of all oil use. There are many options, but to me, the one that makes the most sense is natural gas as a fuel substitute for OPEC oil/diesel/gasoline, with a focus on the heavy duty and fleet markets.
We are now a nation awash in natural gas, so much so there’s a push to allow the export of America’s natural gas to Asia, Europe and elsewhere where it sells for up to four times as much.
While I fully support the producers’ right to sell into higher price markets, I think it shortchanges America’s energy future. Why rebuild another country’s economy on the back of our cheap energy? Wouldn’t we be better served by rebuilding our own with our own natural gas?
Secondly, there is a lot of talk about renewables — wind and solar in particular — but those are power generation fuels. While some can argue that power from wind and solar ends up in the power grid — and, ultimately, in electric vehicles — a battery won’t move an 18-wheeler.
But there’s another free market-focused approach that works, and that’s to get government out of the way.
We should conduct an audit of the antiquated state and federal tax policies that impede the alternative fuel market growth. Here’s an example: In about a dozen states, including Indiana, a visual inspection of a tax decal is necessary before a truck can refuel with liquefied natural gas.
Imagine if an attendant had to come out and record the number on your inspection sticker every time you went to the gas station. Makes “pay at the pump” a useless bit of technology.
Two members of the Indiana State Legislature are working to change that with HB 1324 which will make changes in the natural gas fuel decal program to make it more efficient to fuel LNG vehicles and will change the tax code so truckers pay their fair share based on the energy content of the fuel — making LNG competitive with diesel or gasoline.
It’s all about leadership to me, and on energy we’ve been sorely lacking. We need an energy plan. A fool with a plan can beat a genius with no plan.
Right now, we’re fools without a plan. Here are some elements I’d think about incorporating into one.
First, let’s quit being the world’s oil police. Let other countries — and their increasing thirst for oil — protect the Straits of Hormuz.
Second, let’s rethink the Strategic Petroleum Reserve. It was a good idea when we didn’t know how much energy we had — or how to get at it. But now we are sitting on an ocean of oil — about 700 million barrels — purchased at an average cost of $28 per barrel in a world in which oil is selling for above $90 per barrel. We can release half of it over a 10-year span so it doesn’t upset domestic oil production, but takes control of our oil prices out of the hands of OPEC.
Third, we should move toward a North American Energy Alliance to include Mexico and Canada. They are our two largest oil trading partners.
This would help Mexico increase the recovery of its reserves. Canada’s oil can be moved into the North American market by developing a pipeline to get it to the large refineries in the U.S. South, providing funds for Canada’s growing infrastructure needs.
We can do this if we get buy-in from all the players: The president, Congress, the U.S. Department of Energy, the State Department, and every governor.
Together we can make the energy markets free — and liberate ourselves from OPEC oil.
Read the post HERE.