Pickens Plan Particulars - Another View

The Wind Cries 'Bailout!'
By Steven Milloy
July 10, 2008

Texas oilman T. Boone Pickens launched a media blitz this week to announce his plan for us "to escape the grip of foreign oil." Now he's got himself stuck between a crock and a wind farm.

Announced via TV commercials, media interviews, a Wall Street Journal op-ed (July 9) and a web site, Pickens wants to substitute wind power for the natural gas currently used to produce about 22 percent of our electricity and then to substitute natural gas for the conventional gasoline currently used to power vehicles.

Pickens claims this plan can be accomplished within 10 years, reduce our dependence on foreign oil, reduce the cost of transportation, create thousands of new jobs, reduce our carbon footprint, and "build a bridge to the future, giving is time to develop new technologies."

It sounds great and gets even better, according to Pickens.

Don't sweat the cost, he says, "It will be accomplished solely through private investment with no new consumer or corporate taxes or government regulation."

What's not to like?

First, it's worth noting Pickens' claim made in the op-ed that his plan requires no new government regulation. Two sentences later, however, he calls on Congress to "mandate" wind power and its subsidies.

Next, Pickens relies on a 2008 Department of Energy study claiming the U.S. could generate 20 percent of its electricity from wind by 2030.

Setting aside the fact that the report was produced in consultation with the wind industry, the 20-by-2030 goal is quite fanciful. Even if wind technology significantly improves, electrical transmission systems (how electricity gets from the power source to you) are greatly expanded, and environmental obstacles (like environmentalists who protest wind turbines as eyesores and bird-killing machines) can be overcome, the viability of wind power depends on where, when and how strong the wind blows -- none of which are predictable.

Wind farm siting depends on the long-term forecasting of wind patterns -- but climate is always changing. When it comes to wind power, it is not simply, "build it and the wind will come."

Even the momentary loss of wind can be a problem. As Reuters reported on Feb. 27, "Loss of wind causes Texas power grid emergency." The electric grid operator was forced to curtail 1,100 megawatts of power to customers within 10 minutes.

Wind isn't a standalone power source. It needs a Plan B for when the wind "just don't blow."

This contrasts with coal- or gas-fired electrical power which can be produced on demand and as needed. A great benefit of modern technology is that it liberates us from Mother Nature's harsh whims. Pickens wants to re-enslave us with 12th century technology.

Then there's the cost of the 20-by-2030 goal -- $43 billion more than the cost of non-wind assets, according to DOE -- and this doesn't include many billions of dollars more for additional transmission lines.

Could the 20-by-2030 goal even be accomplished?

According to Electric Utility Week (June 9), a DOE official informed attendees at a June wind industry meeting that reaching the goal would entail replicating the entire existing U.S. wind system (about 17,000 megawatts of capacity constructed over the past decade) every year starting in 2018.

What about Pickens' plan to shift us into natural gas vehicles?

Well, they cost a lot more: an extra $3,000 to $6,000 for cars and $30,000 to $40,000for buses and trucks. There are only about 1,300 natural gas refueling stations in the U.S., as compared to about 180,000 conventional gas stations -- that's a lot of infrastructure to build and finance.

Will Pickens' plan reduce our dependence on foreign oil? Doubtful.

Even if the fleet of natural gas-powered vehicles is enlarged, the bulk of existing and new vehicles will continue to depend for the foreseeable future on gasoline. Americans currently own about 260 million vehicles, a total that grows by more than 3million new vehicles every year. Turnover is low as about 60 percent are owned for more than seven years.

Besides, as demand for natural gas increases, so will prices. In the Washington, D.C. area, natural gas is already about two-thirds as costly as gasoline -- and that's with hardly any demand.

None of these facts and circumstances are new to Pickens. So what's up with him?

Not only does Pickens' firm, BP capital, have significant investments in natural gas, but last June he announced plans to build the world's largest wind farm in west Texas, capable of producing 4,000 megawatts of electricity.

The federal government currently subsidizes wind farm operators with a tax credit worth 1.9 cents per kilowatt hour -- potentially making for a tidy annual taxpayer gift to Pickens based on his anticipated capacity.

But all is not well in Wind Subsidy-land.

Since Congress didn't renew the wind subsidy as part of the 2007 energy bill, it will expire at the end of this year unless reauthorized.

Subsidies are perhaps more important to the wind industry that wind itself. Without them, wind can't compete against fossil fuel-generated power. As pointed out by the Atlanta Journal-Constitution (July 9), "In 1999, 2001 and 2003, when Congress temporarily killed the credits, the number of new turbines dropped dramatically."

It's little wonder that Pickens is waging a $58 million PR campaign to promote his plan. If it works, his short-term gain will be saving the tax credit and his wind farm investment. In the long-term, he stands to line his already overflowing pockets with hard-earned taxpayer dollars.

What will the rest of us get from this T. Boone-doggle? That's anybody's guess, but it probably won't be cheaper energy, energy independence or a cleaner environment.

Toyota's first fuel cell vehicle in 2015 will be priced "shockingly" low

REPORT: Toyota's first fuel cell vehicle will be priced "shockingly" low
by Sebastian Blanco on Jul 20th 2009 at 7:56PM

How low is "shockingly" low?

According to an article in Ward's Auto (subs req'd), when Toyota puts its first production hydrogen fuel cell vehicle up for sale in 2015, the price will be so low it will "shock" the U.S. auto industry. Justin Ward, advanced powertrain program manager-Toyota Technical Center, said that economies of scale will be in place to drop the price down to something that is surprisingly low. Ward didn't name the shocking price, but did say that Toyota is pleased where its fuel cell technology is today. The automaker fully expects the next iterations of the fuel cell technology – currently used in the FCHV – to be ready to meet all customer demands of range and operating temperature, and it will bring the cars to market whether the refueling infrastructure is in place or not. Toyota is currenlty testing customer behavior with hydrogen cars by seeing how people adapt from a standard Prius to a plug-in Prius to a fuel-cell prototype vehicle.

Right now, customers can lease a Honda FCX Clarity in Southern California for $600 a month. How low will the 2015 price have to be to shock you?

[Source: Ward's Auto (subs req'd)]
Tags: featured, shockingly low, Shockingly Low, toyota fuel cell, toyota fuel cell hybrid vehicle, toyota hydrogen, Toyota Fuel Cell, Toyota Fuel Cell Hybrid Vehicle, Toyota Hydrogen

(3)Share
.
Related Articles From Autoblog GreenToyota reaffirms 2015 release of new hydrogen car
27 days ago

Toyota apparently not giving up on fuel cells, may move it up to 2014
68 days ago

VIDEO: U.S. Navy experimenting with fuel cell UAV
90 days ago

Related Articles From Autoblog EDITORIAL: Attention Wall Street Journal - Ford does not use Toyota's hybri...
15 days ago

REPORT: Toyota plans to manufacture up to 30,000 plug-in hybrids in 2012
15 days ago

Toyota reaffirms 2015 release of new hydrogen vehicle
27 days ago

See More Related Articles and Blog Posts
.Reader Comments (Page 1 of 1)

1unni
8:29PM (7/20/2009)
$15k for a 2010 prius equivalent one. I will be shocked if its below this price.

Till that i wont be shocked because its only electric motor, fuel cell stack,ultracapacitor , hydrogen storage/helper systems and a CPU.

Reply
↓↑report2Chris M
9:11PM (7/20/2009)
Considering that they are currently leasing the FCHV for $7,000 per month, I sincerely doubt the price will be all that low. In fact, I wouldn't be at all surprised if they announced a delay in 2014 "to solve some problems", like unaffordable prices.

I'd be surprised if they get the price below a quarter million, and truly shocked if they get the price below $100,000

Of course, they might try the "Riversimple" approach, making it a tiny underpowered limited range 2 seater! But in that case, the "shock" would be the underwhelming performance in an overpriced NEV.

This is just another attempt to spread FUD and discourage people from buying plug-ins now. But it could backfire badly, causing people to delay purchasing a new car and NOT purchase a Toyota hybrid, thinking a cheaper H2FC car was imminent. Of course, when the H2FC price turns out to still be "shockingly high" in 2015, it will be Toyota suffering from "shockingly low" sales.

Reply
↓↑report3Boxman
9:15PM (7/20/2009)
Even if Toyota could make an FCEV at an affordable price, you still have the problem of infrastructure. At least with an EV, you can be reasonably assured of finding an outlet somewhere, even if you have to strike a bargain with some local hotel owner or something. There's no city or town in this country that doesn't have electricity.

But with hydrogen, you'd better limit your driving to Dearborn, Michigan or Los Angeles unless you want to get stranded. And since hydrogen infrastructure is so complex and expensive, it won't be spreading across the United States anytime soon.

Worse still, the very limited ranges of fuel-cell vehicles (vs gasoline) makes an infrastructure even more critical (an infrastructure which I would remind everyone does not currently exist).

To say nothing of the wisdom of using a power-storage device with only 1/5 the efficiency of batteries...

So even excluding the cost factor, hydrogen is still a loser compared to every other alternative (including the old-fashioned internal combustion engine).

In any case, we all know Toyota's full of **** as their promises to dramatically reduce fuel-cell costs will be forgotten by 2015. Ain't gonna happen.
.

China to emerge even stronger?

GUANGZHOU, China — The global economic downturn, and efforts to reverse it, will probably make China an even stronger economic competitor than it was before the crisis.

Reuters
Workers at job fair in Changzhi on Sunday. China is providing subsidies for large-scale vocational training programs.

Related
Times Topics: Credit Crisis — The EssentialsChina, the world’s third-largest economy behind the United States and Japan, had already become more assertive; now it is exploiting its unusual position as a country with piles of cash and a strong banking system, at a time when many countries have neither, to acquire natural resources and make new friends.

Last week, China’s prime minister, Wen Jiabao, even reminded Washington that as one of the United States’ biggest creditors, China expects Washington to safeguard its investment.

China’s leaders are turning economic crisis to competitive advantage, said economic analysts.

The country is using its nearly $600 billion economic stimulus package to make its companies better able to compete in markets at home and abroad, to retrain migrant workers on an immense scale and to rapidly expand subsidies for research and development.

Construction has already begun on new highways and rail lines that are likely to permanently reduce transportation costs.

And while American leaders struggle to revive lending — in the latest effort with a $15 billion program to help small businesses — Chinese banks lent more in the last three months than in the preceding 12 months.

“The recent tweaks to the stimulus package indicate a sharper focus on the long-term competitiveness of Chinese industry,” said Eswar S. Prasad, a former China division chief at the International Monetary Fund. “Higher expenditures on education and research and development, along with amounts already committed to infrastructure investment, will boost the economy’s productivity.”

The international economic slowdown is also doing some things that Chinese authorities had tried and failed to do for four years: slow inflation, reverse what had been an ever-growing dependence on exports and pop a real estate bubble before it could grow even bigger.

The recession in most of the large economies in the world is inflicting real pain here — causing a record plunge in Chinese exports, putting 20 million migrant workers from within China out of their jobs and raising the potential for increased and sustained social unrest. But as President Hu Jintao told the National People’s Congress last week, “Challenge and opportunity always come together — under certain conditions, one could be transformed into the other.”

To that end, Chinese companies are shopping for foreign businesses to acquire. The commerce ministry announced late Monday that it was greatly easing the government approval process for Chinese companies seeking permission to make foreign acquisitions.

The ministry is now leading its first mergers and acquisitions delegation of corporate executives to Europe; the executives are looking at companies in the automotive, textiles, food, energy, machinery, electronics and environmental protection sectors.

The government initiatives coincide with some immediate benefits of the slowdown for China. For instance, air freight and ocean shipping costs have plunged by as much as two-thirds since last summer as demand has fallen.

Blue-collar wages, which had doubled in four years in some coastal cities, have fallen for many workers this winter, causing personal pain but reviving China’s advantage in labor costs.

Unemployment has pushed down the piece rates that factories pay for each garment sewn or toy assembled. Overtime has practically disappeared.

Lao Shu-jen, a migrant worker from Jiangxi province who works at a blue jeans factory here, said that he earned $350 a month late last year but would be lucky to earn $220 a month this spring.

“There are a lot of blue jeans” piling up in the back of the factory with no sign of buyers, he said.

Highly qualified middle managers, in acutely short supply a year ago, are now widely available because of layoffs. They are likely to stay that way — although white-collar unemployment could pose a threat of social unrest. Limited job opportunities contributed to the Tiananmen Square protests 20 years ago.

Some jobs are still available now. Four days after a shoe factory closed here for lack of orders, laying off several hundred workers, there were four ads on the factory’s front gate from other shoe factories seeking to hire skilled workers.

Unskilled laborers face the greatest difficulty finding jobs. But with subsidies from Beijing, provincial governments have embarked on large-scale vocational training programs of the sort that the United States has discussed but not actually tried.

Guangdong province alone, here in southeastern China, is quadrupling its vocational training program this year to teach four million workers engaged in three-month or six-month programs.

The main comparable program in the United States, under the Workforce Investment Act, has been training fewer than 250,000 a year, although President Obama’s stimulus program provides funding that could double the number of American workers in training programs.

The Guangdong training programs are half in the classroom and half in the factory, usually the business that plans to employ the trainees. By increasing productivity, training programs can hold down corporate labor costs per unit of production for years to come.

China’s huge training programs may also help preserve social stability by keeping the unemployed off the streets, although Chinese officials deny that is their intention.

Multinationals are cutting back less in China than elsewhere — and some are even expanding.

Intel is shutting down semiconductor production lines sooner than previously planned at older, smaller operations in Malaysia and the Philippines as it opens a large, new factory in Chengdu in western China.

IMI Plc., the big British manufacturer of items as diverse as power plant valves and brewery equipment, has just announced an accelerated shift of operations to China, India and the Czech Republic, after cutting its global work force by 10 percent since December.

And Hon Hai, the 600,000-employee Taiwanese company that is one of the world’s largest contract manufacturers of products like the Apple iPhone and Nintendo Wii game console, has just increased employment by nearly 5 percent in China even as it cuts overall employment by 3 to 5 percent.

Yet China’s economy still has weaknesses. Little is being done to shift the economy away from a heavy reliance on capital spending and toward greater consumption. The social safety net of pensions, health care and education barely exists, so Chinese families save heavily.

Strict government policies on labor and the environment, intended to address serious shortfalls in both and imposed a year ago when China felt more confident of its economic strength, are prompting low-tech industries like toy manufacturing to move to other, less stringent countries.

Top labor officials insisted during the National People’s Congress that they would resist suggestions from some Chinese executives that the new standards be relaxed.

outsourcing jobs

Obama has repeatedly claimed that McCain supports tax breaks for companies that ship jobs overseas, and in one ad charged that McCain had "sold ... out" Pennsylvania workers whose factory closed. The ad further implied that their jobs were sent to China. That's not what happened. No jobs were sent to China, and the factory closed because the television parts it manufactured were becoming obsolete. As for those tax breaks, McCain has supported a provision of the tax code that allows companies to defer paying U.S. corporate taxes on profits they earn and leave overseas. But economists have said this isn't a major reason why jobs are lost. factcheck.org. Sounds like some upgraded training is in order here, to be competitive globally. outsourcing a job that costs $20 an hour here to a country where the cost are half, if the quality of work is comparable, is just good business. American workers need American jobs, doing what WE do best; innovation and technology. Renewing the American infrastructure will provide a LOT of good American jobs that CANT be outsourced.