Pickens Flip Flops on Energy

Eight months ago, T. Boone Pickens stated that the low price of natural gas would create a market incentive for natural gas vehicles to flourish without federal assistance.  He’d given up calling for any more tax credits.  Sure he wanted them, but he didn’t need them and he didn’t believe that Congress would act.    What this meant – at least for a time – was that he was suddenly willing to abandon his Pickens Plan, which was his way of reducing U.S. dependence on foreign oil.

Part of the Pickens Plan was for America to use more of America’s natural gas, but his central focus was on natural gas and incentivizing (with subsidies) America’s heavy truck fleets to use natural gas.  He conceded last year that the switch from diesel-powered trucks could occur without federal intervention.

In his colorful words, “It’s going to happen, and you don’t have to have Washington do it, thank God.”  Yes, Pickens accepted market forces would allow this transition to occur without further intervention and market distortions from the federal government.  And that’s good because subsidy programs are bad for taxpayers and energy consumers, though they may be good for investors like Pickens. 

Pickens is now changing his tune, though:

The best thing to do is focus on heavy-duty trucks and give them a tax credit. It could work like a toll road, what you call a pay-for system. If you use it, you pay for it. So you give these guys a break upfront to convert to natural gas trucks, and then you tax the natural gas.

Unlike Mr. Pickens’s opinions, free market principles don’t change.

When the market is allowed to function without government intervention, the best product wins – as opposed to the most politically favored product.  And this, all without harming taxpayer and consumers.

Mr. Pickens has a prerogative to change his opinion, but that doesn’t make his opinion good.

To be clear, what he is advocating for is government handouts — that harm taxpayer and consumers — for folks who lobby Washington politicians.  And guess where those government handouts come from?

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One thought on “Pickens Flip Flops on Energy

  1. Dear Ms. Rosario,

    1. For almost your entire life, since the Oil Embargo of 1973, we have been jerked
    around by OPEC. It’s been humiliating to watch our last dozen presidents embarrass
    themselves railing at OPEC, but failing to make any progress towards cutting
    the OPEC chain. Now with natural gas, we can cut that chain. And we should,
    just because we can. We can’t bring peace to the Middle East, but we can
    finally tell OPEC to keep their oil. Whether you were a fan of President Ford
    or President Carter, it would be immensely satisfying to cut that OPEC chain.

    2. National pride. Iran has 2.9 million cars (23% of its fleet) running on CNG. If Iran can do it, we sure can do it.

    3. Money for terrorists and repressive regimes. We import 134 million barrels of oil per month from OPEC. That is about $130 billion per year going governments we don’t like. OPEC may sell the oil to someone else, but not as much. Also helps with
    our balance of payments.

    4. If we just tax oil imports from OPEC, we do not harm our friends like Canada and

    5. Buy votes in the House by having the federal government build 4 CNG refueling
    stations in each congressional district. Then resell them when there is enough
    business for them to be economically viable.

    6. Do not directly subsidize the CNG conversions, rather lend the money at no
    interest to be repaid from the fuel savings.

    7. Have the 600,000 federal non-military vehicles converted to CNG by presidential order.

    Respectfully yours,
    Christian S. Miller

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