Published on July 10th, 2008 | by Rod Adams28
T. Boone Pickens Knows Energy – So Does George Chapman, His Amarillo Neighbor
July 10th, 2008 by Rod Adams
T. Boone Pickens has captured America’s attention with his PickensPlan for energy. He recently testified in front of the US Senate and provided them with some excellent information about oil and gas depletion, asked repeatedly for them to continue supplying the Production Tax Credit (PTC) and described how there were perfectly located corridors in the US that were the “Saudia Arabia” of wind.
He has been running advertisements on major media outlets describing a clear challenge – America now sends $700 Billion across its borders every year to purchase oil.
Pickens has a plan to reduce that number and he intends to share the details of the plan during the coming weeks. He has been an oilman all his life; that has made him a strong believer in Peak Oil.
As a professional geologist and energy investor, he believes that the only way that the world’s oil supply and demand will be balanced in the future is for the price to achieve a high enough level to drive down the demand. He does not see any hope of dramatically increasing the rate of daily production above its current level of 85 million barrels of oil per day.
Pickens’s publicly released plan is to build a trillion dollars worth of wind turbines and 200 billion dollars worth of transmission lines in order to supply 20% of the US electricity market with wind. He claims that will push large quantities of domestic natural gas out of the electricity market and into the vehicle market as a replacement for gasoline and diesel fuel.
Pickens knows the energy business, and knows his geology. He also understands geography and I bet he can play a mean hand of poker.
The reason for the transition from energy to poker is that I believe that Pickens has a much better hand than he has revealed. The details on the visible cards do not add up – natural gas supplies 20% of the electrical power in the US, but a significant portion of the gas that we use for electricity is quick response peaking power in low capital cost gas turbines. If wind supplied 20% of the electrical power in the US, that portion of the gas use would certainly not decrease because wind blows when it wants to, not when the grid operator turns the knobs.
In my opinion, Pickens’s hole card is the energy source that he mentions only at the very end of his list of energy sources during his Senate testimony – nuclear. I watched the video a couple of times and realized that his poker face slipped just a little bit. When he had one of his people show a graph of the wind resources in the US, he said that they are in the right places “for safety”.
No one generally talks about putting wind in remote areas because of safety. Having wind and solar resources concentrated in places where few people live is more of a challenge than an advantage, since the energy has to be shipped a long way. People do, however, talk about putting large nuclear power plants into areas with low population density for safety reasons. (I am not one of them, but bear with me here.)
Pickens is a lifelong resident of Amarillo, Texas, owns a 68,000 acre ranch in Roberts County, and owns the water rights to a portion of the Ogallala Aquifer.
He also has a neighbor named George Chapman who has announced plans to build two large Evolutionary Power Reactors (EPR) in Amarillo. Each of those reactors will produce 1600 MW of 24 x 7 electrical power. They are also designed with load following capabilities.
Mr. Chapman understands that there is a race on to build new nuclear plants in the US, with a significant financial reward waiting for those who cross the finish line in front. As he told Amarillo.com during an interview in early 2007, “If we didn’t think we were going to win it, we wouldn’t get in the race,” Chapman said. When Mr. Chapman first discussed his plans, people asked several questions including:
- Who will buy the power? (The sparsely populated Texas Panhandle does not need 3200 MW of electricity.)
- Where will you get the cooling water needed for large pressurized water reactors?
When Pickens completes a transmission corridor from his planned wind farms to population centers like Dallas-Ft. Worth, the lines will be able to provide a higher return on the investment by carrying reliable nuclear generated power as well as the intermittent power provided by the wind turbines.
Amarillo Power’s reactors will also displace a lot more gas from the electrical power grid than covering the panhandle of Texas with as many wind turbines as we can possibly build between now and 2016, which is when I predict that Chapman’s reactors will start operating.
Intriguing hypothesis, don’t you think?
CNG Pump © Christine Gable – About.com Hybrid Cars & Alt Fuels
Hole card – Rod Adams under Creative Commons