Pickens Plan Right for South Dakota?

Hyperion, TransCanada, and BushCheney have made me suspicious of oilmen. So why should I trust oil magante T. Boone Pickens?

Maybe because this oilman's promises of energy independence don't rely on oil. Pickens stopped in Rapid City yesterday to pitch his wind and natural gas plan to a thousand-plus listeners.

Over a thousand people, taking time out of a beautiful summer day to hear a speech on energy policy. Wall Drug President Ted Hustead was rightly impressed: "Look at all the people here today. I've never seen a turnout like this at an issue meeting" [Kevin Woster, "Pickens Pitches Alternative Energy to About 1,000 at Civic Center," Rapid City Journal, 2008.08.21].

So what's there to like about the Pickens Plan?

• Pickens faces facts and says oil production isn't the answer. He says oil production peaked in 2005; the oil that's left will only be more expensive to find and produce and will not keep up with demand.
• Pickens focuses on wind and natural gas: use more wind for electricity, thus freeing up natural gas for use in cars and trucks, thus easing demand for oil. And as geologist Mark McGillivray tells Woster, South Dakota has wind and natural gas.
  
• Pickens takes the long view: building wind turbines from Texas to North Dakota to produce 20% of our electricity would cost $1.2 trillion, including new transmission lines. But that upfront, one-time cost translates into a one-third reduction in oil imports, which means (if I'm reading the plan right) $230 billion a year (at current prices) that we don't send overseas. We get net savings in six years. Extrapolate those savings over decades of increasing oil prices, and you see a big investment in domestic energy now means our kids have a lot more money in their pockets.
• Pickens takes the local view: He calls the predicted $10 trillion America will send to foreign nations for energy over the next decade "the greatest transfer of wealth in the history of mankind." The $1.2 trillion we would spend on the Pickens Plan would be all domestic investment, employing American workers who would fill their lunchpails and buy coveralls and pick-up trucks on Main Streets up and down the Great Plains. Instead of those dollars going straight from us to Riyadh and Moscow, that capital would turn over several times in small-town America. Economic stimulus, indeed.

Note that the Pickens Plan still isn't quite a triumph of the free market: Pickens is barnstorming (civic-center-storming?) the Plains to rally support for government action—i.e., subsidies. But then that's no different from the subsidies the oil industry gets... and development of the Great American Wind Corridor won't require two carrier groups and 150,000 soldiers in the Persian Gulf.

The Pickens Plan offers potential benefits for South Dakota and for America that would dwarf the benefits promised by TransCanada and Hyperion. South Dakota will make more money building Pickens's windmills and producing America's energy than surrendering land for TransCanada's pipelines. Pickens has a track record much longer and more successful than Hyperion. And unlike our other Big Oil wooers, Pickens isn't basing his plan on continued dependence on foreign oil.

Pickens is still a crafty oilman, so I'm keeping an eye out for whatever trick he may have up his sleeve. But at this point, his plan sounds like the best one I've heard this year... and he's not even running for office (hmm... maybe Obama or McCain should tap him as VP?).