Should America switch to natural gas (even if people get rich in the process)?

I got an email from the local TEA Party, part of which is below.
My reply below that.

What do you think, should America switch to natural gas?
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The Pickens Plan and Crony Capitalism

I still find it strange when those who claim they believe in free enterprise, limited government, reducing government intervention in the marketplace and fiscal responsibility, suddenly take an "Everywhere but in my house" approach. I am referring to the more than 80 House Republicans, many of whom claim to be conservatives, who are co-sponsoring H.R. 1380, otherwise known as the Pickens Plan after Texas energy tycoon, T. Boone Pickens.

The bill revolves around several main arguments, the first of which is that America must become energy independent. I fully agree with those sentiments: America only produces 5 million barrels of oil a day, yet consumes 20 million, meaning 75% of our oil comes from other producers, some of whom have no love for this country. The second argument builds off the first: we must tap into American energy sources to gain more independence. Again, I completely agree with that argument. The third argument is that natural gas is one of the best American energy resources, therefore we must tap into it, as we have more than 100 years of natural gas that we can produce domestically. There is of course nothing wrong with any of the above arguments.

But where the Pickens Plan starts to go awry is when you look at the nuts and bolts of how the Plan would work. First, as many know, American cars and big rigs don’t currently run on natural gas, so there would have to be a massive overhaul of vehicles.

The plan calls for each big rig to get a ,000 subsidy for the conversion from diesel to natural gas. With around 8 million large trucks on American highways right now, you can do the math and figure out what the price tag is. It’s one thing to convert big rigs to natural gas. Once that happens, you then have to overhaul thousands of fuel stations across the country that would need to have natural gas available. But don’t worry: the Plan gives a 0,000 tax credit for every station that converts to natural gas. I won’t even really touch on the conversion of cars to natural gas, but there are provisions in the plan that have, by the time it’s all added up, a ,500 subsidy for every natural gas car.

What is really being discussed with the Pickens Plan is a complete overhaul of our transportation system, which will cost hundreds of billions of dollars, as National Review has pointed out, for very minimal profit; billion by one estimate. And the person who just happens to benefit the most? Someone heavily invested in the natural gas business by the name of T. Boone Pickens.

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(there was more to the letter, but you get the drift…)
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My reply:

If Pickens can pull off a Nationwide conversion to natural gas, I don’t care if he gets rich in the process. Consider railroads in the 1800s. Government couldn’t afford to build railroads all the way to California. That required robber Barons trying to get rich(er). What government COULD do is create a right-of-way 20 miles on each side of the new tracks. In which new towns sprang up, thanks to the new thing called "transportation".

Without private enterprise getting rich, the railroads would never have been built and The West would have taken a lot longer to become "settled".

Perhaps the Pickens Plan is not the best way to do it. But I think it should be done. If he can pull it off, great.

10 Responses to “Should America switch to natural gas (even if people get rich in the process)?”

  1. Harvey Mushman Says:

    I see two flaws to this bill.

    First, a new bureaucracy would have to be created to manage this conversion. And we all know how efficient bureaucracies tend to be… A $64k conversion from diesel to NG, will actually cost $120k, if we use the model all other federal bureaucracies.

    One example:http://nation.foxnews.com/stimulus/2011/07/05/obama-s-economists-stimulus-has-cost-278000-job The $787 billion stimulus produced jobs at a cost of $278,000 per job. I see no need to give the plutocrats a new slush fund to dip into.

    The other flaw is: http://www.usdebtclock.org/ We are $14.6 trillion in debt.

  2. Paul Jackson Says:

    The less oil we import the better. The cost of the Pickens plan to convert trucks is $512 billion. How much do we spend fighting wars in the middle east?

    Calling the Pickens plan "crony capitalism" is the pot calling the kettle black when compared to our current energy policy.

    Thank you for asking a sensible question. They are a rare commodity around here these days.

  3. L.T.M. Says:

    Best question I’ve seen in a long time. Here’s my short answer but I’ll be back. Is it a smart idea for not only economic reasons but for national security reasons as well? Absolutely. Were it gets complicated is that word "We"….We are a divided country ideologically and ideology would be front and center.

    Seems to me the options would come down Central Planning or Central Planning Lite.

    Edit.. I say that because we’ve had a tug of war btwn the left and right in this country for a long time and the left has steadily gained ground. The private sector is so demonized it makes it very hard for politicians to sell the idea that they should play the major role in anything, including the idea you propose here.

    Like I said, I think it’s a smart move. In the past 15 years we’ve discovered huge deposits of natural gas and improved ways to extract it. When I say ‘we’ I mean the private sector…. when a leftist says ‘we’ they always mean The Government.

  4. BUTTERFLY Says:

    My dear friend, I am an lay person into the above matter of yours. I would advise you to just stop medalling into such affairs of the states. The Economic and economists both have jobs to do for the betterment of the state. Who are you to put your views.

  5. Sting Ray Daddy Says:

    I like your response to the letter.
    The idea of America for each person to have the right to pursue happiness. T. Boone is pursuing his happiness and he should be aloud to proceed. I would think he would try to sell a pilot program first.

    To Butterfly: it is the duty of every American to meddle in the affairs of the State. The state does not have your best interest at heart.

  6. poolplayer Says:

    Gee Whiz Wally, you mean natural gas just doesn’t leap out of the ground and insert itself into trucks and cars that are magically converted to run on it? There would actually have to be "service stations" that supplied this fuel? Amazing. Someone or something is going to have to drill for this stuff, transport it to the places it’s needed, and most likely spend (gamble) money to do this? Well I’ll be darned.

    Why in the world would anyone expect that such a person or corporation should benefit from gambling their money to do this? That’s just not good socialism.

    Greenies are fond of telling us how dangerous our dependence on foreign fuel supplies is. And that’s correct. But I don’t see them doing their shopping at the Supper Market with their horse and buggies parked outside. Nor do I see a lot of bicycles lining the racks in front of the Home Depot. You get the idea. Transportation is a large part of our energy usage. Ethanol is not the answer. The slightest research will tell you it’s a net energy and natural resource loser. Electric cars/trucks? Where does the electricity come from? Solar cells and wind power? Maybe someday, but not now or in the near future. While these have more potential for home heating and cooling, they are a LONG way from being able to power the transportation and industrial sectors.

    In order to cut the foreign energy umbilical cord we need to take advantage of the resources we have in abundance. Natural Gas, Oil, Coal to name a few. And we need to do it sooner rather than later. It does us no good buried in the ground, and in the geopolitical game of chess, those resources still untapped make this country a valuable acquisition by some aggressive super power in the future. And I keep my fingers crossed that that future is a long way off (?).

  7. fatboysdaddy Says:

    Almost any plan that gets this nation off foreign oil is good.
    Mr. Pickens has tried to get this country to think beyond the box
    but there are those who seem to believe that getting natural gas and oil from the ground
    of this country is wrong.

  8. tott1 Says:

    my thoughts yes natural gas is a good fuel as is propane for transportation needs where i disagree with pickens is the subsidies and tax breaks to do it . we have the fuels and they are available you can buy a cng setup to fuel your natural gas vehicle from home and pay for it on your monthly heating bill. propane is also widely available. both fuels are currently about half the price of gasoline or diesel fuel. if we had a few more alt fuel cars on the market or conversion kits. so that people known as customers showed up at gas stations asking to purchase these fuels for motor vehicle use it would not take long for corporate greed to add them to the pumps. after all it was the oil companies that built the system of gas stations we now have. in the early 1900’s the tanks and pumps were put in to create gas stations to cut the costs of selling gasoline in stores in 5 gallon cans. i once read through the pickens plan and was disgusted at the use of tax money to push the switch over down everyones throat. the plan needs to be scrapped and a commercially sponsered one written.

  9. Just Thinking Says:

    If we use more natural gas for vehicles you will pay a premium to compress it. A study was done at Harvard for what kind of fuel is best for economnomics and health in cities. You would think natural gas would win, but the best fuel for buses is diesel. We can get diesel from coal. The reason we do not is that Coal is a boogeyman for the global warming nuts.

    In general, we should end the subsidies and cut back on the regulatoins. I predict coal and nuclear will win for power generation. Coal will produce more of our liquid fuels. And if we use less natural gas for electrical power it will be cheaper to heat our homes and cook with natural gas.

  10. warrior Says:

    In theory this reads like a spectacular idea, but in fact, the natural gas discovery in Fort Worth, Texas, has been everything but a gold mine or profitable… Whatever the case is, the rich will get richer from the natural gas, and the poor will get poorer…Teachers are losing their jobs, public libraries are being closed, all public swimming pools have been closed… The profit from natural gas is not helping in cow town at all…