Tags: Energy | Pickens | Plan

US Must Focus Its Energy on Passing Pickens’ Plan

By Bill Spetrino   |   Friday, 18 Nov 2011 08:10 AM

Lately, you are hearing about a $535 million guarantee that the Obama administration made to a green energy company called Solyndra.

I’m not going to debate the pros or cons of this but if we really want to get off foreign oil, we should listen to billionaire oilman T. Boone Pickens.

Pickens is supporting a bill now called HR1380

He said there are about eight million class 5 through class 8 heavy-duty trucks in the U.S.

These trucks range from refuse recycling trucks to over-the-road 18-wheelers and use upwards of 35 billion gallons of fuel annually.

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Helping the owners of these vehicles replace their diesel trucks with trucks running on compressed natural gas (CNG) or liquefied natural gas (LNG) can have an immediate, measurable effect.

"The cost of a basic class 8 truck, which includes regional tractors, drayage trucks, and refuse and recycling trucks, built to run on diesel is approximately $125,000," he said.

"A similar truck manufactured to run on natural gas will cost between $35,000 and $40,000 more ... just three years ago the incremental cost of a natural gas truck over a diesel was between $60,000 and $100,000," he said.

"I believe that, by providing this modest tax credit (HR 1380) for truckers to purchase NGVs (natural gas vehicles) that differential will quickly disappear as the benefits of natural gas as a transportation fuel become obvious to users and obviously the price will fall as more trucks are sold and the subsidy will eventually disappear as the prices will become almost equal.”

The reasons why I feel this is imperative:

• National Security. We have an abundance of natural gas. "In April of this year, oil imports accounted for about 60 percent of our three-year-high trade deficit of $50.2 billion.

Converting America's heavy truck fleet of about 8 million vehicles to liquefied natural gas would save 2.5 million barrels of oil per day, meaning we could reduce our reliance on OPEC oil by half. At $100 per barrel that means $250 million per day stays in the United States to circulate through OUR economy, rather than being shipped off overseas.

Additionally, natural gas is a secure North American energy source with 98 percent of the natural gas consumed produced in the U.S. and Canada.

• It is much cheaper. Currently priced $1.50 to $2.00 per gallon lower than diesel or gasoline (depending upon local markets), the use of natural gas fuel reduces costs significantly for vehicle and fleet owners. Think of the millions in savings.

• It is much better for the environment. It reduces greenhouse gas emissions up to 30 percent in light-duty vehicles and 23 percent in medium to heavy-duty vehicles

• Jobs. Over the next five years, Pickens believes the plan should create 400,000 jobs and over 1.3 million jobs in the next 10 years. With all due respect to the government, Pickens is 83 years old and is a billionaire whose honor and track record are superlative.

Now many have criticized this as the type of subsidy that needs to be eliminated.

However, Pickens, as usual, has a sensible answer. There is a difference between a targeted incentive and a never-ending subsidy paid by the federal government on a per-gallon, per-kilowatt or per-anything basis, said Pickens.

The private sector, not government, is what should seed that creation, Pickens said.

“The federal government’s job isn’t job creation; it doesn’t do that nearly as effectively as the private sector.”

Ask yourself this simple question: If your government who just lost more than a half a trillion dollars on a failed green project really wants to break its dependency from foreign oil.

Why not provide these credits which can help us keep $250 million a day, hundreds of thousands of jobs, lower prices on fuel all while lowering the greenhouse emissions by almost 30 percent?

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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