Pass the Boone Pickens Bill
By JOE NOCERA
On Wednesday, amid all the hullabaloo over the budget battles, a simple, discrete and largely overlooked bill was dropped into the Congressional hopper. Sponsored by two Democrats and two Republicans — that’s right: an actual bipartisan piece of legislation — its official title is the New Alternative Transportation to Give Americans Solutions Act, or the Nat Gas Act, for short. People in the know, however, call it the Boone Pickens bill.
Boone Pickens and I go way back; he was the subject of my first-ever business story, for Texas Monthly, nearly 30 years ago. Though we’ve had our ups and downs since then, and though our politics are very different, I like and respect him. In recent years, we’ve become friends.
Which is to say: I’ve got a bias here. Then again, so does Boone. Although he is usually described as a Texas oilman, that’s a bit of a misnomer. Boone has spent most of his career drilling not for oil but for natural gas, which he knows more about than just about anyone. His late-life occupation has been running a natural gas-oriented hedge fund, which has made him, at the age of 82, a billionaire several times over.
Out of that deep knowledge has come a powerful belief: that the country’s energy salvation depends on moving away from the fuel we don’t have — namely, oil, where imports, some of which come “from our enemies” (to quote Boone), account for two-thirds of our oil needs. Instead, we should move to a fuel we have in abundance: natural gas. Most experts say there is enough natural gas in the ground to last a century; Boone’s convinced that modern drilling techniques will allow us to find enough for several centuries.
His critics like to point out that anything that boosts natural gas will put money in his pocket. But so what? He’s already plenty rich, and, he says, “I’m sure not doing this for the money.” Besides, he’s right.
The bill introduced last week is an offshoot of the Pickens plan, his cri de coeur for energy independence, which he put together in 2008 and has spent more than $80 million promoting. Although Boone believes that our continued reliance on OPEC oil is dangerous, he also knows that even if you drill, baby, drill, as many Republicans want, it won’t make much difference. Quite simply, America is running out of oil. The Pickens plan calls for increased use of wind, solar, nuclear, even coal. ”I’m for anything that’s American,” he said.
But, of course, you can’t use solar or wind to power a vehicle, which is what most imported oil is used for. You can, however, use natural gas. Nor is this some pie-in-the-sky technology; there are already 12 million vehicles around the world that use either liquefied or compressed natural gas, though only 140,000 in the U.S. (They’re mostly buses and trash haulers.)
The Pickens bill creates tax incentives — $1 billion a year for five years — to encourage manufacturers to begin building heavy-duty trucks that will be powered by natural gas instead of diesel. It also gives some tax incentives to truck-stop owners who install natural gas filling stations to help create the infrastructure.
On the face of it, this seems like a pretty small goal for a guy who’s got such big ideas about energy independence. Partly, Boone is being realistic. It would be politically impossible to convert cars to natural gas or to ask for gigantic tax breaks in this time of austerity.
Even so, this one small step could make a big difference. Of the 20 million barrels of oil we use each day, 70 percent goes for transportation fuel. The 8 million heavy-duty trucks on the road today account for 23 percent of that fuel. Although the tax incentives in the Pickens bill would be enough to cover only about 140,000 new trucks, he hopes that it will catapult the industry toward natural gas even without the subsidies. Just moving the country’s big trucks to natural gas, he says, could cut our OPEC imports in half.
Every president since Jimmy Carter has called for the country to become more energy independent. Yet none of them have ever done anything to accomplish that. The result is that our reliance on foreign oil has inexorably increased. With the current turmoil in the Mideast, the price of gasoline breaking the $4-a-gallon barrier and the Chinese becoming voracious competitors for imported oil, this would seem an ideal time to pass a law that could lessen our dependence on foreign crude.
Oilmen are incorrigible optimists, and Boone is no exception; he thinks the bill will pass quickly. Not long ago, President Obama spoke out in favor of it, in a speech that included a shout-out for Boone. Already, the bill has attracted 157 co-sponsors. “I think the House can pass it in 30 days,” Boone says.
I hope he’s right. Natural gas is cheaper than oil. It’s cleaner. And it’s ours. If Congress can’t pass this thing, there’s really no hope.
