The Pickens Plan

I have nothing against wind power and think it will be an important part of our future energy mix.  However, I think The Pickens Plan is misleading and will not lead to the advertised reduction in oil imports.

The Pickens Plan

  • The goal of the plan is to replace 1/3 of our oil imports in 10 years.
  • We would first replace existing natural gas fired power plants (20% of our generating capacity) with wind turbine power.  According to Pickens, this will cost about $1-trillion for the wind turbines and another $200-billion for additional grid/transmission infrastructure.
  • We would then take the natural gas displaced from power generation and use it to fuel compressed natural gas [CNG] cars and trucks instead of using gas and diesel fuel.

All this sounds simple enough, but as usual the devil is in the details.  I see three main fallacies.

Fallacy One – A variable and uncontrollable power supply like wind cannot replace a flexible, on-demand power source like natural gas.   The following is from the DOE’s July 2008 report titled “20% Wind Energy by 2030”:

“There are two separate and distinct power system challenges to obtaining 20% of U.S. electric energy from wind. One challenge lies in the need to reliably balance electrical generation and load over time when a large portion of energy is coming from a variable power source such as wind, which, unlike many traditional power sources, cannot be accessed on demand or is “nondispatchable.

Transmission system operators must ensure that enough generation capacity is operating on the grid at all times, and that supply meets demand, even through the daily and seasonal load cycles within the system. To accommodate a nondispatchable variable source such as wind, operators must ensure that sufficient reserves from other power sources are available to keep the system in balance.

However, overall it is the net system load that must be balanced, not an individual load or generation source in isolation. When seen in this more systemic way, wind energy can play a vital role in diversifying the power system’s energy portfolio.”

Translation:  There is a limit to how much of a variable power source like wind can be accommodated by the system and the DOE estimated that limit to be about 20% of the total electrical power generated.  In addition, after adding this new wind power, the system will continue to need natural gas fired, on-demand, dispatchable power to achieve a balance between supply and demand.

The bottom line – Few if any gas fired power plants can be displaced by wind power.

Fallacy Two – Utilities are unlikely to decommission any of their gas fired power plants.   In 2009, congress will probably enact a Cap & Trade policy for greenhouse gases.  Since coal fired power plants emit 2 times more CO2 than gas fired plants,  to reduce emission costs, utilities are much more likely to decommission older coal plants as new wind generation capacity comes on line rather than gas plants.  It’s even more likely that they’ll just use the additional capacity to meet growing demand.

The bottom line – Few if any gas fired power plants will be displaced by wind power.

Fallacy Three – In the near future, we will not be able produce enough natural gas to meet current demand let alone meet any new demand for transportation.

U.S. natural gas production peaked in 1973 and we have just managed to maintain production levels at near 1973 levels by extracting “unconventional” gas from tight sand and shale formations, deep water sources in the gulf of Mexico, and by tapping into coal bed methane gas.  We are now working almost twice as hard to extract the same amount of gas, and since 1990 the number of active wells has increased from 250,000 to over 450,000.  In addition, since 1996 production per thousand feet of well drilled has fallen from 350 MMcf/1,000ft to 60 Mmcf/1,000ft.  Based on the current trends, U.S. production may soon fall off a cliff.

U.S. Natural Gas ProductionAs a result, 20% of our needs are now met by imports. Canada provides most of these imports with a much lessor amount coming in the form of liquid natural gas [LNG] from Trinidad and few other sources.  Unfortunately, Canadian production is now in decline [~3% per year] and may be unable to supply our import needs as early as 2010.

The arctic pipeline of Sarah Palin fame will be capable of supplying 8% of our current demand, but will not be on line until 2018 at the soonest.  Our best near term option is to import and compete for LNG on the global market at more than twice the cost of our existing supply.  This will put us at the mercy of Middle Eastern and Russian suppliers which control more than 50% of the global supply.  In addition, it is doubtful the the current LNG infrastructure of tankers and de-gasification terminals is adequate to meet U.S. demand.

Bottom Line – Don’t run out and purchase that compressed natural gas [CNG] vehicle any time soon

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One response to “The Pickens Plan

  1. Bit shy about Nuclear power, are we..:-).

    Nice blog BTW.

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