T. Boone Pickens Finds Allies in Harry Reid, Al Gore

Posted by Gregg Gethard on October 8, 2009 at 11:43 am

Pickens on stage with Reid and Gore at a clean energy summit. (image: zimbio.com)

T. Boone Pickens is a most unlikely darling of environmentalists.

T. Boone Pickens is a billionaire who made most of his fortune by purchasing and selling shares in energy companies. But, as detailed by Kambiz Foroohar for Bloomberg, Pickens is now touting the Pickens Plan, which would use natural gas to power the 6.5 million diesel trucks which drive up and down America’s roads. By doing so, Pickens says that the United States can save 2.7 million barrels of oil per day, which is over half of what the country imports on a daily basis from OPEC.

For the past year, Pickens has traveled across the nation touting this idea. Along the way, he has managed to unite both Republicans and Democrats behind legislation that provides incentives for the creation of natural gas vehicles and filling stations. This is a shocking turnabout; Pickens was an ardent supporter of President George W. Bush, put both his name and money behind the controversial “Swift Boat” attack ads against John Kerry, and has been described in the past by current US Senate Majority Leader Harry Reid as his “mortal enemy.”

But today, Pickens and Reid describe themselves as friends. And Reid has co-sponsored a bill that integrates portions of the Pickens Plan. The New Alternative Transportation to Give Americans Solutions Act—or, the “NAT GAS Act”—would provide a 10-year tax credit for natural gas vehicle makers in addition to a $100,000 credit for natural gas filling stations. Other senators sponsoring this legislation include Utah Republican Orrin Hatch and New Jersey Democrat Bob Menendez.

Yet critics of this bill say that Pickens’s attempts to shape legislation are nothing more than an attempt to once again tilt the energy markets to his favor. And to be sure, Pickens certainly does have money tied into natural gas vehicles. He currently owns 5 percent of a Dallas-based natural gas exploration company. And he’s also partnered with Kleiner Perkins Caufield & Beyers, a venture capital firm which has tossed money behind a company looking to build environmentally friendly cars. One of the partners in Kleiner Perkins Caufield & Beyers is former vice-president Al Gore.

In addition to gaining a foothold in Washington, The Pickens Plan has also won the backing of some major companies. Both AT&T and Wal-Mart have investigated the possibility of moving some of their trucks to natural gas.

However, there are major stumbling blocks that may prevent the development of natural gas vehicles. One is the price of oil. When prices nearly reached $150 per barrel, many legislators and pundits were clamoring for a major change to America’s energy policy. However, as prices dropped, America’s oil dependency no longer became a priority in Washington. The price of oil may have to rapidly increase before there’s a great demand for natural gas powered trucks. (On Tuesday, Pickens said on CNBC that he thinks the price of oil will reach the $75 per barrel mark this year and would average $80 next year. Further details about this were previously reported on HeatingOil.com.)

In addition, there must be a dramatic increase in the amount of natural gas produced in order to meet the increased demand natural gas vehicles would create. Another 20 billion cubic feet of a day of natural gas would be required to move all trucks to natural gas. Many natural gas exploration firms are concentrating on extracting gas from reservoirs in Colorado, Louisiana and Pennsylvania; however, gas in these regions is very hard, and costly, to reach. In order to make drilling in these states profitable, natural gas would have to rise from its current price of $4.89 per million BTUs.

The obstacles are large, but if a former oilman like Pickens can win over Harry Reid and Al Gore, his plan may reach fruition.