Thursday, August 26, 2010

Why T. Boone is on the Right Track

Its been two or more years since T. Boone Pickens has been coming on the television and travelling around the country espousing his plan for converting a greater portion of our energy consumption to using natural gas. The main focus of his plan being the establishment and subsidization of commercial trucks running on natural gas as a start.

Many people are suspicious because T. Boone stands to benefit from an adoption of his plan because he has many natural gas investments, but those same people don't realize he also is invested in wind farms and even underground water rights in Texas. He is no evil genius, just a great American entrepreneur.

What should ring true most clearly these days is his assertion that his plan would create a pathway for creating American jobs on the back of infrastructure investments and retooling of many commerical vehicles. Perhaps more important over the long term is the possibility of reducing the foreign dependence on imported oil.

Each month we import about $20billion dollars worth of oil. In todays world of massive government spending this may not sound like much, but to put it in perspective - this amount of money would cover the monthly tab for our foreign war efforts.

If we were to retain these dollars in the U.S. through utilization of our own domestic natural gas, we'd have a monthly stimulus for growth of $20billion with an investment multiplier effect of probably 4-5 times in the short run. Simply stating a strategic shift to natural gas would create a stimulus of outsized porportions domestically and unlike our past spending - this would lead to virtuous growth leading to more jobs and tax revenue instead of more unemployment benefits.

While Boone admits that we'll likely be running battery powered cars in 40-50 years, what we need is a stop gap. Boone has this. What makes it more compelling is that this stop gap won't drain our wealth, but bolster it, allowing us to increase the likelihood that we'll make it to the battery powered era without a bankrupt government.

For those worried about the environmental effects of natural gas drilling methods - make the tradeoff for this plan coincide with the strongest governmental and independent oversight legislation. The investment will still be there and maybe, just maybe we'll have an example of how Government can aid private investment and lead us to a source of prosperity rather than dependence.

Pickens Plan


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