The Pickens Plan and the Way Forward

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The Pickens Plan and the Way Forward

• Moving to a Cheaper, Cleaner, Cooler Energy Future

Tom Smitty Smith Director, Public Citizen
Texas October 8, 2008
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What is The Pickens Plan?

• It aims to get us off foreign oil
• Support wind power nationwide as a renewable
  resource
• Use natural gas rather than oil to fuel cars
• T. Boone Pickens believes this will work he is
  heavily invested in wind and is putting millions
  into advertising.

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Alternatives to the Pickens Plan
Pickens plan Alternatives
Get us off foreign oil Invest in a cleaner, cheaper, cooler energy future using fully renewable resources to reduce greenhouse gases. Decrease use of all fossil fuels to a sustainable level
Support wind power nationwide as a renewable resource, with a goal of getting 20 of our energy from wind by 2020. We support this goal 100- but we can go even further by including other renewable resources like solar, geothermal.
Use natural gas rather than oil to fuel cars In a limited fashion, where feasible. Instead, use renewable-created electricity to fuel most cars.
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Are we building the right types of power plants?
ERCOT data shows we need to meet growing peak-
not build baseload plants. Efficiency and
renewable energy can meet that need
Forecasted average load vs. forecasted peak load
Source ERCOT
Presentation by Tom Smitty Smith Public
Citizens Texas Office
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How Texas Can Meet Its Energy Need for the
Future
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What should the goal of our energy policy be?

• Decrease Greenhouse Gas Emissions 80 by 2050
• Lower Cost
• More Jobs

Texas Green House Gas (GHG) Emissions
Even if emissions start to decrease in the next
two years and reach a rapid and sustained rate of
decline of 3 per year, temperatures are likely
to rise to 1.7C above pre-industrial levels by
2050 and to around 2C by 2100. This is because
carbon dioxide already in the atmosphere will be
around for many years to come and the climate
takes some time to respond to these changes. Only
an early and rapid decline in emissions gets
anywhere close to the target. Vicky Pope,
Hadley Centre on Climate Change, Oct 1, 2008
Source Greenhouse Gases A Report to the
Commission.Texas Natural Resource Conservation
Commission 2002.
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Whats our plan

• Statewide Efficiency Goals to meet 50 -100 of
  Growth
• Decrease energy use by 30 or more through
• net zero energy buildings
• green building programs
• energy codes that are 15 above current code
• retrofitting all existing buildings to reduce
  energy use 50 by 2030
• Reduce CO2 emissions by 80 from all power plants

• Use renewable energy
• Expand the RPS including
• energy storage
• concentrating solar
• building integrated solar
• geothermal energy
• biomass
• Use CHP to utilize gas 3 times more efficiently
• Create repayment program for excess electricity
  generated
• Change Building Codes to allow CHP

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Wind power is already here

• Wind is renewable, abundant, and affordable.
• Investments in wind have produced measureable
  economic benefits, including thousands of new
  jobs
• Transmission lines are a limiting factor, but is
  being addressed by the Texas PUC
• Wind is successful at offsetting pollution from
  other power plants

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Wind is abundant

• Texas is ideally situated in the wind corridor
• The US Department of Energy estimates we can
  easily get 20 of reliable electricity from wind.
  It is possible we could get even more.

Source Department of Energy, The 20 Wind
Solution
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Wind creates jobs Case Study Nolan County

• 2008 local economic impact of 315,025,200 and a
  2009 local economic impact of 396,540,380.
• 2008 1,124 direct wind jobs, payroll in excess
  of 45,000,000
• 2009 1,330 direct wind jobs, payroll in excess
  of 56.6 million
• Landowner royalties annual at 2,500 MW
  installed 12,264,000, or 17,660,160
  annually at 3,600 MW installed by late 2009
• Total taxable property values in Nolan County
  have increased from 500 million in 1999 to 2.4
  Billion in 2008 (projected 3.5 Billion by
  2010)
• Cumulative wind energy project property taxes
  paid in Nolan County from 2002 through 2007
  30,357,617
• Property taxes paid to County of Nolan by wind
  energy projects in 2007 1,724,242
• School district property taxes paid by wind
  energy projects in Nolan County in 2007
  12,778,691
• Cumulative school property taxes paid 2002
  through 2007 in Nolan County by wind energy
  projects (Sweetwater, Blackwell, Trent, and
  Highland school districts) 22,670,680
• New school construction in Nolan County school
  districts (2004 through 2010) 24,000,000

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Transmission is a limiting factor, but is being
addressed by the Texas PUC

• Investing in transmission will allow us to get
  renewable energy to the major population centers
  of the state.
• Transmission is technology neutral, benefitting
  all renewable energy sources equally.
• Building more transmission actually saves money
  for the consumer. Every 3 spent on transmission
  equals 8 savings on the average power bill.
• Increased transmission will eliminate pollution
  10 of CO2 and 12 of smog precursors from other
  pollution sources by replacing fossil fuels with
  wind and other renewable energy.

Proposed Transmission
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Transmission Lines as Planned
Source Texas Public Utilities Commission
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Transmission Costs

• Cost of Texas Transmission 4.93 billion
• DOE Estimate for Transmission Nationwide 43
  billion
• Pickens Estimate40-45 billion

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SECO study found storage

• Cost less than gas or coal with CO2 sequestration

• Turns night-time wind to peak performer

Presentation by Tom Smitty Smith Public
Citizens Texas Office
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Developing an Energy Storage Portfolio program
is cheaper than gas, coal or nukes and could
create jobs

• Pumped Hydro
• Thermal
• Ice
• Heat

• Compressed Air Energy Storage
• Batteries
• Super Capacitors
• Flywheels

Photos from DOE Office of Electric Delivery and
Energy Reliability Report on Energy Storage
Presentation by Tom Smitty Smith Public
Citizens Texas Office
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Efficiency and Renewables are cheaper than Coal
and Natural Gas with CO2 prices
Source Union of Concerned Scientists
Presentation by Tom Smitty Smith Public
Citizens Texas Office
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Downsides of Natural Gas Vehicles (NGVs)

• Supplies of natural gas dwindling
• The price of natural gas is notoriously unstable
• Lack of distribution infrastructure and cost of
  deployment
• NGVs run cleaner, but only reduce greenhouse gas
  emissions by 20 (approximately the same as
  ethanol)

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Why not Natural Gas?

• It is plentiful, but we are beginning to import
  more and more of it
• The price is notoriously unstable, subject to any
  small supply disruption or increase in demand.
• Prices increased dramatically in response to
  supply disruptions from Hurricanes Rita and
  Katrina. Further disruptions are not only
  likely, but assured.

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Natural Gas supplies are dwindling
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Natural gas prices are up recently
Both speculation and supply disruptions are
blamed for recent price spikes, according to the
DOE. (Natural Gas Weekly Update, Oct 1, 2008,
http//tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp
Overview)
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Natural Gas prices are incredibly volatile and
susceptible to supply disruptions
Following Hurricanes Rita and Katrina, natural
gas production decreased less than 15, but
prices jumped 60, not returning to a normal
range for six months despite increased production.
U.S. Natural Gas Marketed Production (Million Cubic Feet) U.S. Natural Gas Marketed Production (Million Cubic Feet)
Jan-05 1,632,685
Feb-05 1,498,281
Mar-05 1,687,347
Apr-05 1,614,614
May-05 1,652,081
Jun-05 1,611,743
Jul-05 1,627,427
Aug-05 1,619,414
Sep-05 1,400,941
Oct-05 1,475,622
Nov-05 1,514,407
Dec-05 1,592,533
Jan-06 1,618,148
Source EIA at http//www.eia.doe.gov/basics/quick
gas.html
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Demand also fuels natural gas prices
Any increase in demand could cause gas prices to
skyrocket. Replacing half of our cars with NGVs
could double the price.
According to the Natural Gas Vehicles
Association, replacing 5 of cars on the road
with NGVs would lead to only 4 increase in gas
consumption. Using regression analysis, we find
that 22 of the correlation between demand and
price is attributable to increased
demand. Assuming both of these, by increasing
NGVs on the road we could push up the demand on
natural gas by a ratio of 45 for every percent
of our cars we switch to NGVs, possibly doubling
natural gas prices as we replace half of the
fleet currently on the road.
Years 2002 2007 are already above this
trendline. We can assume this prediction to be
even somewhat conservative.
Sources NGVA at http//www.ngvc.org/about_ngv/ng
v_NGsupply.html , EIA at http//tonto.eia.doe.gov/
dnav/ng/ng_pri_sum_dcu_nus_a.htm
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Hybrid vs. Natural Gas

• Honda Civic Hybrid
• 50 reduction in CO2
• 35 reduction in NOX
• Base price 23,550
• These reductions are for traditional hybrids-
  plug-ins will be higher

• Honda Civic GX
• 20 reduction in CO2
• Nearly 100 reduction in NOX
• Base price 25,090

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Fueling Stations are limited
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Next-gen plug-in hybrids and all-electric cars
are the future

• Electrical generation is cheaper and cleaner with
  wind and solar on the grid
• Using wind generated at night (off-peak) to
  charge our cars is the cheapest and cleanest way
  to fuel them.
• Plug-in hybrids will generate 1/3 of emissions of
  a normal car at 1/3 of the fuel cost
• 65 of commuters travel less than 30 miles at
  less than 35 mph in traffic, during which time a
  hybrid can run completely on battery power.

The 2010 Chevy Volt will have a range of 100
miles on a single charge (before using any gas)
and be able to plug into any home
wall-socket. The Plug-in 2010 Prius at full
charge can run its first 6 miles under 55mph
completely on battery power.
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The Future of NGVs

• NGVs are a part of the solution- they are a great
  option for fleet or government vehicles, or as a
  boutique fuel where refueling stations are
  already in place.
• The Port of Los Angeles is already using Natural
  Gas trucks (along with next-gen diesel engines)
  in an attempt to eliminate all smog-precursors by
  2015.
• HEB has converted a portion of its truck fleet to
  NGV. Each tractor equals a NOx reduction of
  1,300 lbs per year, equivalent to removing 63
  cars from the road per year
• We should, instead, focus on running cars off of
  electricity from renewable sources.
• Biomethane should also be aggressively pursued as
  an alternative to CNG for cars.

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A Better use for Natural Gas Combined Heat and
Power Plants can provide 20-25 of our future
energy needs using 1/3 the energy

• Recycle energy 3 times
• For electricity
• For hot water
• For cooling
• Perfect for
• Hospitals
• Hotels
• Campuses
• Some light industrial

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Additional Annual Cost of CO2 for Texas Plants
Billion
20
35
50
/Ton of CO2
Statistics Sources for this and previous page
Energy Information Administration , Union of
Concerned Scientists, and Wachovia Capital
Markets, LLC
Presentation by Tom Smitty Smith Public
Citizens Texas Office
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Federal Regulation of Carbon Dioxide Emissions is
a Matter of When, Not If
Presentation by Tom Smitty Smith Public
Citizens Texas Office
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An Alternate Path Maintaining energy reserves
through efficiency.
Developed by Environmental Defense and Others
Presentation by Tom Smitty Smith Public
Citizens Texas Office
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Planning for CO2 reductions creates 84,000 new
jobs and saves 200-700 per customer
Presentation by Tom Smitty Smith Public
Citizens Texas Office
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The 2030 Energy Plan

• The goal 100 reduction in coal and oil
  consumption in America by 2030
• Renewable Electricity National Renewable
  Portfolio Standard
• 300 GW of onshore wind energy
• 80 GW of offshore wind energy
• 170 GW of solar photovoltaic
• 80 GW of concentrated solar power
• 15 GW of conventional geothermal
• 65 GW of enhanced geothermal.
• Transportation
• Increase in sales of plug-in and hybrid vehicles
  to 90 of all sales by 2030 (reaching 42 of the
  U.S. vehicle fleet in 2030)
• Increasing conventional vehicle fuel efficiency
  to 45mpg by 2030
• Acceleration of the vehicle fleet turnover from
  19 to 13 years (increasing sales by 31)
• Transmission/Infrastructure 32,000 kilometers of
  new transmission lines, investment in
  infrastructure for the massive deployment of
  plug-in cars and hybrids
• Others a price on carbon dioxide, fixed
  long-term tax credits and incentives, funding for
  RD and a smarter national grid that can cope
  with intermittence, a National Energy Efficiency
  Standard for appliances, buildings, vehicles,
  national decoupling of utility profits from
  sales, and investment in education to educate
  workers to fill new high tech green jobs.

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Conclusions

• Any energy plan should benefit consumers, aimed
  at giving residents the choice of the cheapest,
  cleanest energy possible.
• Wind energy, transmission lines, efficiency and
  storage are easily deployable NOW.
• Investments in clean energy will reap economic
  benefits
• We should not replace one expensive, imported
  hydrocarbon with another one, but NGVs can be a
  limited part of the solution.

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More conclusions

• Pickens has re-energized the debate
• He has over 1 million signers to his petition
• Oklahoma Governor Brad Henry signed the Pickens
  pledge
• urged the next President and Congress to enact
  energy policies that address renewable and
  alternative fuels such as wind power and natural
  gas in an effort to reduce oil imports.
• The only way to beat organized money is with
  organized people
• Sign up now

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Contacts

• Tom Smitty Smith, Public Citizen Texas
  www.citizen.org/texas www.texasvox.org
• PickensPlan.com
• CleanEnergyForTexas.org
• Energy Plan googleblog.blogspot.co
  m/2008/10/clean-energy-2030.html