T. Boone Pickens throws in the towel on NAT GAS
posted at 8:31 am on September 1, 2012 by Jazz Shaw
We’re going to need to catch up on some stories we missed last week during all of the convention coverage and this is one of them. On Aug. 29 the biggest proponent of the NAT GAS Act, Mr. T. Boone Pickens, decided that some battles simply aren’t worth fighting any more.
T. Boone Pickens said natural gas vehicles can survive just fine without Congress approving his so-called Pickens Plan.
“It’s going to happen, and you don’t have to have Washington do it, thank God,” Pickens said at Wednesday’s energy luncheon hosted by POLITICO…
And Pickens strongly suggested that he doesn’t have any plans to try to push his plan anymore in the nation’s Capital.
“I will not go back to Washington again unless it’s for a social event,” he said.
He also took a moment to toss in a comment on his previous wind energy proposal.
The billionaire and former oil baron also lamented that while his plan initially promoted wind energy, that hasn’t worked out so well.
“I’ve lost my ass” to wind-energy investments, he conceded.
The American Conservative Union was popping champagne over this while the rest of us were whooping it up in Tampa.
American Conservative Union (ACU) today issued the following statement from ACU Chairman Al Cardenas:
“We are thrilled to hear that T. Boone Pickens has thrown in the towel on the NAT GAS Act. It was a classic example of the federal government attempting to pick winners and losers within an industry and that’s why the ACU fought so hard against this misguided policy. ACU will continue to monitor this legislation and will act swiftly to make sure that the NAT GAS Act does not go anywhere”
Many of the strongest supporters of natural gas exploration, including yours truly, have lined up against the NAT GAS Act. This doesn’t mean in any way shape or form that we oppose the exploration, development and use of natural gas. It’s a great, abundant energy source with a ton of potential for America. But as always, government subsidies are not the answer to whatever problem some members of Congress think they’re trying to fix. This form of energy will succeed if it’s economical and competitive in the market. (And it certainly looks like it is.) We don’t need Uncle Sam’s thumb on the scale. Let’s hope this represents the closing chapter of this story.
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That’s unfortunate for him, but at least he was risking his own money, rather than ours, on a hare-brained “green” energy source. coughSolyndracough
Mr. Prodigy on September 1, 2012 at 12:29 PM
Wind and solar are absolutely not viable without heavy taxpayer subsidy.
What Pickens was “risking his own money” on was a sales pitch to the government to give him a guaranteed income from the wallets of the common citizenry.
Alberta_Patriot on September 1, 2012 at 12:33 PM
In fact… no. I’ve never purchased equity in an insurance firm, that I know of. I’m sure some of my energy holdings include self-insurance, but then again, nuclear isn’t a large part of their operations. I can suck up self-insurance against an oil spill. Against Fukushima? Absolutely not.
And no. I don’t purchase insurance, in any case, unless I absolutely have to. I carry auto, and I carry basic catastrophic care. Otherwise, I think insurance is a bad bet.
JohnGalt23 on September 1, 2012 at 12:33 PM
Sorry? Are we arguing in favor of subsidies now?
JohnGalt23 on September 1, 2012 at 12:35 PM
Not necessarily.
Need I remind you that the largest nuclear operator in the United States is not actually ~IN~ the United States, but out on and under the seas?
Alberta_Patriot on September 1, 2012 at 12:40 PM
That’s ok. If you could get to 98% energy independence that quite a few people would be happen. Quite a few $$$ would be staying domestic.
It’s downright silly to ignore great solutions simply because it only gets us to 98% – especially when that other 2% can come online if security warranted it.
blink on September 1, 2012 at 12:47 PM
OK, well you have every right to be an irrational investor. Other investors are not irrational, and the promise of a slightly higher return can easily overcome a rational risk/reward ratio requirement.
blink on September 1, 2012 at 12:50 PM
Fair enough. As a constitutionalist, I can accept, on principle, the idea of fruitful military spending being used to further civilian technology. Two problems though…
First, we know it will be years before such technology would be applied to civilian use, if only to protect our military advantage. Until then, we are still looking at domestic shortfalls. I, as a free marketeer, am willing to accept those shortfalls. Would those who argue for energy independence be willing to accept that time frame? (And I don’t ask that of you… I don’t know how you feel about Energy Independence.)
Second, while it is certainly a legitimate spending item under our Constitution, it still amounts to a gigantic subsidy for GE, unless when you are prepared to go into civilian production other firms are encouraged to enter the market. I’d be curious to see how that would be handled.
JohnGalt23 on September 1, 2012 at 12:53 PM
Who is pulling numbers out of the air now?
But in general, I agree. I think domestic energy production is good, if for no other reason than our current account deficit. And in general, I’m pro-nuclear, if someone wants to invest in it.
But I don’t want to see Uncle Sugar being the backstop.
JohnGalt23 on September 1, 2012 at 12:59 PM
1. Any plan for energy independence will take years.
2. No plan involving fission plants would require the GE PRISM reactor. He was just telling you about a more efficient reactor.
JohnGalt23, are you a child? Have you ever heard of a defense contractor? Paying a company to develop a new defense technology is not a subsidy. Paying General Dynamics to develop a new fighter aircraft is not a subsidy – even if General Dynamics is able to someday apply that technology to civilian aviation.
Now, paying wind producers to buy GE wind turbines is most certainly a subsidy.
blink on September 1, 2012 at 1:04 PM
Actually, I was being conservative. Feel free to show a back-of-the-envelope scenario which indicates that more than 2% of our total domestic energy costs would need to be spent on foreign uranium.
The government MUST backstop nuclear plant construction loans because the government has too often screwed nuclear plant investors by changing their minds after the money starts to get spent (or in the case of that plant in Long Island it was after ALL the money had been spent).
Newly elected politicians need to know that they will waste taxpayer money if they cancel a project.
blink on September 1, 2012 at 1:08 PM
Except we’re now talking about an industry that you, but one post later claims that “The government MUST backstop”.
So, we’re talking about the USG funneling hundreds of billions of dollars to GE to develop a source of energy, putting them in a position to have an overwhelming competitive advantage in the civilian marketplace, all the while having that same USG act as a backstop to their potentially disastrous risk of operations, however small that risk might be?
Am I missing something?
JohnGalt23 on September 1, 2012 at 1:22 PM
I wouldn’t have a problem with that, as long as the deal included a provision for any GE patents or rights to the technology.
See how long it takes GE to walk away from $100B. How fast is a nano-second, anyway?
BobMbx on September 1, 2012 at 1:37 PM
Ahhh….
Meant to say “GE doesn’t have any rights or patents to the techonology”
BobMbx on September 1, 2012 at 1:39 PM
Yes, you’re missing quite a bit, but that’s ok. I’ll get you up to speed.
The government only needs to backstop construction loans. The backstop isn’t needed as long as the government doesn’t change its mind and suddenly decide that the plant can’t open.
Regardless, if Boeing develops and builds a new aircraft for the US government (such as the new P-8), then that will help Boeing have additional expertise in that area of aviation. That doesn’t mean that the R&D contracts were subsidies.
How is it a new source of energy?
Are you sure about that price tag? That sounds like it’s off by one or two orders of magnitude to me.
1. The USG only needs to backstop construction loans – not operations.
2. The USG wouldn’t need to backstop new technologies. It could merely backstop traditional/proven reactors.
blink on September 1, 2012 at 2:00 PM
First off, there’s no need for “hundreds of billions of dollars”.
As described in Esquires interview with Dr. Eric Loewen, PRISMs lead designer:
This technology is far cheaper and far less complicated than the uninformed make it out to be.
Second, PRISM isn’t the only game in town. Flibe Energy’s LFTR (itself an evolution of the taxpayer funded Aircraft Reactor Experiment) is a potentially huge game changer in the energy sector. So to is any reactor that has a breeding ratio in excess of 1.0.
Third, government funding is nowhere near as big an issue government interference. The NRC has evolved from an agency dedicated to promoting safe nuclear power to one dedicated to stopping nuclear power. Mitt Romney has promised to clean house at the NRC if elected. This alone is almost the single biggest reason to vote for him.
Alberta_Patriot on September 1, 2012 at 2:23 PM
That’s a risk that every industry faces. Why should nuclear power be treated any differently?
Of course they are subsidies. Such activity necessarily steers resources into R&D that might, absent those incentives, naturally head into R&D of other technologies, or something other than R&D in the first place.
Now, if they develop an airplane that keeps us safe, it was well worth it. But that doesn’t change the fact that, as a result of obtaining those government contracts, Boeing is in a superior position in the civilian marketplace vs it’s (theoretical) competitors, and that it obtained that advantage on the taxpayer’s dime.
Is anyone employing PRISM commercially? If not, sounds like a new source of energy to me.
And if we are talking about refitting our nuclear fleet with this technology (which, if it works, go for it!), over the life of the fleet, yeah… nine-figures doesn’t seem outrageous.
But even if it’s not, we’re still talking about appropriated dollars going to selected contractors to develop technologies that will benefit them in civilian use, to the detriment of their competition. And in this case, more so than Boeing, you are talking about an industry in which you’ve already admitted a necessary incestuousness with the government.
Forgive me for noticing that something smells fishy.
Right.
So, if we have a Fukushima here, all those damages are going to be taken care of by the equity of electrical utilities self-insuring? Are we really to believe that there is not an unspoken agreement by everyone involved that the government will be responsible in that case?
Frankly, I’m less than convinced…
JohnGalt23 on September 1, 2012 at 2:52 PM
The future is with Babcock & Wilcox mPower reactors built into depleted mines.
roy_batty on September 1, 2012 at 3:10 PM
“I’ve lost my ass” to wind-energy investments, he (T. Boone Pickens) conceded.
That’s only fitting as he tried to blow windmills up our butts.
RJL on September 1, 2012 at 4:23 PM
That’s the way the cookie crumbles. You simply won’t attract companies to do valuable military work unless you allow them to use technology developed once it is declassified.
Breeder reactors have been in use since the early 1940s. Nearly all reactors can be pressed into service as breeders, however they won’t be as good at it as a reactor specifically designed to produce fissile material.
We are not discussing refitting existing reactors, but using a smaller number of specialized breeder reactors to turn Americas existing stockpile of depleted Uranium into fissile reactor fuel useable by any reactor. Your figures are based on a very poor assumption.
For these reasons, the US government rarely hands out development contracts to just one company. Boeing developed the X-32 for the JSF competition (which was won by the Lockheed F-35) and Northrop developed the YF-23 for the ATF competition (won by the Lockheed F-22). Should technologies developed for all four aircraft be cleared for the civilian market, Lockheed is unlikely to dominate its competitors.
If you are going to employ argument from personal incredulity and imagine “unspoken agreements” whose existence cannot be proven, then you are unlikely to be convinced by even the most reliable evidence.
Alberta_Patriot on September 1, 2012 at 8:17 PM
Unnecessarily limiting siting options removes one of the main advantages of Small Modular Reactors.
B&Ws mPower still requires fissile fuel and a means of converting Americas depleted uranium stockpile (by either PRISM, LFTR or other form of breeder) will still be required.
Alberta_Patriot on September 1, 2012 at 8:20 PM
Forget personal credulity, then. Let’s take a look at some actual numbers, and some history.
The cleanup costs for Fukushima could approach $250 billion. That would wipe out any self-insurance the industry has, including the value of common stock of all but a few public corporations. It would be an insurance nightmare larger than Katrina and Andrew.
And who ended up on the hook for Katrina and Andrew?
JohnGalt23 on September 1, 2012 at 9:12 PM
Oh please.
You lose ALL credibility by trying to claim that all industries face the same political opposition as nuclear power.
So, apparently you don’t know the what a subsidy is.
So what? That doesn’t mean that it’s a subsidy.
If the government decides to pay a defense contractor money to develop missile defense, then the government is paying for a service. That is not a subsidy.
If you pay someone to cut your lawn, then that is not a subsidy for your lawn guy.
That doesn’t make it a subsidy.
If your lawn guy gets a contract with you, then he will have more experience than lawn guys that didn’t get a contract with you. That doesn’t make it a subsidy.
Good grief. There’s nothing fishy about it. The fish odor must be a naiveté induced psychosomatic reaction.
Wow, you really are a boyscout. It’s difficult for someone to criticize something that they don’t understand.
That’s ok, I’m sure there’s some willfully ignorant 5th graders out there that are less than convinced, too.
blink on September 1, 2012 at 9:36 PM
Would you label a new type of coal fired plant a new source of energy, too?
Apparently, you don’t know the definition of the word, source. The technology/mechanism that harnesses the source isn’t the source.
Apparently, you don’t know the definition of development cost. Retrofitting or building a new vessel with the new machinery is NOT development cost.
Those contractors are “selected” via competitive bid. The government choses the best entity for the job. Why on earth wouldn’t you want the best entity to build your weapons/defense systems?
blink on September 1, 2012 at 9:41 PM
Really? My lawn guy’s contracts handed out with taxpayer money? Do I pay my lawn guy for R&D, much of which is expected to fail, or does he pay for proven research, and then factor that into my bill.
Government payment for R&D, be it in medicine, agriculture, or defense, amounts to a subsidy.
JohnGalt23 on September 1, 2012 at 9:46 PM
Take note… you didn’t answer the question.
I’ll repeat:
So, if we have a Fukushima here, all those damages are going to be taken care of by the equity of electrical utilities self-insuring? Are we really to believe that there is not an unspoken agreement by everyone involved that the government will be responsible in that case?
Who ended up picking up the tab for Andrew and Katrina? And in Japan, who is picking up at least part of the tab for Fukushima?
That certainty that government will act as a backstop that you admitted was a necessary incestuousness, artificially props up nuclear as an option.
JohnGalt23 on September 1, 2012 at 9:50 PM
Is there a pool going for what T. Boohoo is next going to try and get someone else to pay for that will benefit him?
It’s not bad enough with fractional-reserve banking and the Federal Reserve both causing inflation; there are actually individuals that attempt to get a government to spend monies that it does not possess; hence, borrow with interest. Beautiful cycle.
John Kettlewell on September 1, 2012 at 9:53 PM
Subsidies don’t need to come from the taxpayer.
Good grief, do you know anything about anything?
You pay your lawn guy to perform a service for you. Paying someone to conduct R&D is paying someone for a service.
No, it doesn’t. You’re being irrational.
blink on September 1, 2012 at 10:19 PM
You do realize that nuclear power plants already exist, right? What are you asking here? Have you decided to become one of those irrational “Fukushima, Fukushima, Fukushima, Fukushima” people?
There are all types of disasters that can occur in the world. An asteroid can hit all the oil platforms and refineries on the Gulf coast. Then what?
blink on September 1, 2012 at 10:26 PM
You really are a waste of time because you know so little. Backstopping construction loans have nothing to do with backstopping operations.
blink on September 1, 2012 at 10:28 PM
In case you have forgotten, Fukushima wasn’t caused by a fault in the reactors design or some flaw inherent to nuclear power in general. Far from it, in fact. The reactors at Fukushima withstood forces 100 times more powerful that they were designed for.It was caused by an earthquake strong enough to knock the entire planet 9 inches off its axis.
Stepping in where acts of God are concerned is a natural role for Government.
There is nothing artificial propping up nuclear. It exists and will be exploited for the simple fact that it is the only energy source that meets or exceeds the density and capacity factor of fossil fuels.
Fossil and nuclear is all that we have and all that will ever be used in significant quantities. Nothing else is able to compete.
Alberta_Patriot on September 1, 2012 at 10:40 PM
Why do we keep pretending that the traditional free market economy still exists in certain industries?
The whole idea behind Capitalism is to accumulate as much wealth as possible, no matter how. That includes underhanded means to drive competitors under, fixing prices with others in the industry, and collusion with friendly politicians (by that I mean, those that can be bought off and/or promised lucrative positions should they leave office).
This system has worked well enough for us thus far…it is what it is and has worked way better than Socialist command economies.
But there’s no need to create some kind of free enterprise religion with its own set of Beatitudes and morals so as to tap into a sort of Universal Spirit of Commerce.
Dr. ZhivBlago on September 1, 2012 at 11:48 PM
This is about the only true thing you’ve stated so far. Regulations imposed upon us by government (sometimes on behalf of special interests. Others on behalf of big corps that want to stay on top.) have all but destroyed the free market.
What you’re describing is the current system… which is corporatism not capitalism.
Capitalism requires free people, a free society, a free market, and rules that are fair to all people/entities and that are enforced equally and justly by people interested in justice.
We don’t have any of the above quite frankly.
It’s also falling apart… like every other form of tyranny.
True Capitalism has at least a handful virtues that our current system does not:
Justice: All men are not equal… except before the law. We all have the same laws before us and should be punished equally for breaking them. The universe is no respecter of persons.
Honesty: You deserve nothing and will get nothing for free but death. By the sweat of thy brow thou shalt eat bread.
Freedom: You are free to try, you are free to buy, you are free to sell, and you are free to fail.
Diligence: there really is no such thing as a free lunch.
These are the only ‘morals’ and ‘beatitudes’ of capitalism… and they are the only ones capitalism really needs.
Chaz706 on September 2, 2012 at 1:51 AM
Three posts in a row! More proof that
“An empty barrel makes the most noise.”
landlines on September 3, 2012 at 2:27 PM
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