If you are going to transform American energy to address the national security and economic risks associated with our OPEC oil dependence, there is only one solution: move our natural gas reserves into transportation, with an emphasis on the heavy-duty truck and fleet-vehicle markets.
Free-market advocates argue that’s bad public policy. They fail to understand that OPEC is far from a free market. They’ll tell you we shouldn’t pick winners and losers in the transportation fuel segments. I say it’s time to pick America over OPEC. Let’s go with anything American. I’m fine with the battery, but remember, it won’t move an 18-wheeler.
Imagine the impact natural gas could have in solving our energy problem. Targeting heavy-duty trucks and fleet vehicles — about 8.5 million in all — could cut our OPEC oil dependence in half in 10 years or less.
Fortunately, while we wait for Washington policymakers to lead, the move to replace more expensive, dirtier OPEC oil, diesel or gasoline with cheaper, cleaner domestic natural gas is gaining private-sector support. At an event in Chicago last week, two leaders in the natural gas vehicle industry — Navistar and Clean Energy Fuels — announced a plan to aggressively develop a comprehensive system to build natural-gas truck engines and provide the infrastructure to fuel them.
Over-the-road trucks tend to run the same routes on the same schedule. Drivers stop in the same places to rest, eat and refuel. Putting natural-gas refueling stations along the major travel routes is a relatively minor logistical issue. Building natural-gas engines for those trucks will be a major job creator.
We’re a country awash in natural gas. Since 2008, the biggest shift in energy resources has been the enormous reserves of natural gas in the vast shale deposits in Texas, Louisiana, Arkansas and Appalachia. New deposits are being tested in places like Iowa and Ohio, but even now, we have a 125-year supply of domestic natural gas literally under our collective feet.
On the world market, natural gas is selling from $12 per million cubic feet in Europe to $16 in the Middle East. The price in the United States? Less than $3 because of our massive reserves.
Getting that natural gas out of the ground and into our rolling stock is another major job creator. A recent study by PricewaterhouseCoopers LLP suggests that by utilizing America’s shale gas resources, “U.S. manufacturers could employ approximately 1 million more workers by 2025.”
America is sending nearly $1 million a minute out of the country to pay for foreign oil. We’re paying about $100 per barrel for foreign oil and, in the case of OPEC oil, often to nations that are hostile to our best interests.
With gasoline at the pump climbing toward $4 per gallon we might have thought energy would have emerged as a top-tier election year issue. In spite of the lingering threat to our economic recovery and our national security, it has not.
For more than four decades, every presidential candidate has said something to the effect of “Elect me, and we’ll be energy independent.” That’s four decades of failed promises.
Once we have serious fuel competition, we can control our energy destiny, have a better grasp on our energy costs and achieve what we’ve been promised for decades. To make that happen, we have to get on our own resources and in this case natural gas is an obvious winner.
T. Boone Pickens is founder and chairman of BP Capital.