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The Pickens Plan and the Way Forward

The Pickens Plan and the Way Forward. Moving to a Cheaper, Cleaner, Cooler Energy Future. Tom “Smitty” Smith Director, Public Citizen Texas October 8, 2008. What is The Pickens Plan?. It aims to get us off foreign oil Support wind power nationwide as a renewable resource

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The Pickens Plan and the Way Forward

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  1. The Pickens Plan and the Way Forward Moving to a Cheaper, Cleaner, Cooler Energy Future Tom “Smitty” Smith Director, Public Citizen Texas October 8, 2008

  2. What is The Pickens Plan? • It aims to get us off foreign oil • Support wind power nationwide as a renewable resource • Use natural gas rather than oil to fuel cars • T. Boone Pickens believes this will work: he is heavily invested in wind and is putting millions into advertising.

  3. Alternatives to the Pickens Plan

  4. Are we building the right types of power plants? ERCOT data shows we need to meet growing peak- not build baseload plants. Efficiency and renewable energy can meet that need Forecasted average load vs. forecasted peak load: Source: ERCOT Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  5. How Texas Can Meet It’s Energy Need for the Future

  6. What should the goal of our energy policy be? • Decrease Greenhouse Gas Emissions 80% by 2050 • Lower Cost • More Jobs Texas Green House Gas (GHG) Emissions “Even if emissions start to decrease in the next two years and reach a rapid and sustained rate of decline of 3% per year, temperatures are likely to rise to 1.7°C above pre-industrial levels by 2050 and to around 2°C by 2100. This is because carbon dioxide already in the atmosphere will be around for many years to come and the climate takes some time to respond to these changes. Only an early and rapid decline in emissions gets anywhere close to the target.” –Vicky Pope, Hadley Centre on Climate Change, Oct 1, 2008 Source: Greenhouse Gases: A Report to the Commission.Texas Natural Resource Conservation Commission 2002.

  7. What’s our plan Statewide Efficiency Goals to meet 50% -100% of Growth Decrease energy use by 30% or more through: net zero energy buildings green building programs energy codes that are 15% above current code retrofitting all existing buildings to reduce energy use 50% by 2030 Reduce CO2 emissions by 80% from all power plants Use renewable energy – Expand the RPS including : energy storage concentrating solar building integrated solar geothermal energy biomass Use CHP to utilize gas 3 times more efficiently Create repayment program for excess electricity generated Change Building Codes to allow CHP

  8. Wind power is already here… • Wind is renewable, abundant, and affordable. • Investments in wind have produced measureable economic benefits, including thousands of new jobs • Transmission lines are a limiting factor, but is being addressed by the Texas PUC • Wind is successful at offsetting pollution from other power plants

  9. Wind is abundant • Texas is ideally situated in the “wind corridor” • The US Department of Energy estimates we can easily get 20% of reliable electricity from wind. It is possible we could get even more. Source: Department of Energy, “The 20% Wind Solution”

  10. Wind creates jobs – Case Study: Nolan County • 2008 local economic impact of $ 315,025,200 and a 2009 local economic impact of $ 396,540,380. • 2008 – 1,124 direct wind jobs, payroll in excess of $ 45,000,000 • 2009 – 1,330 direct wind jobs, payroll in excess of $ 56.6 million • Landowner royalties – annual at 2,500 MW installed – $ 12,264,000, or $ 17,660,160 annually at 3,600 MW installed by late 2009 • Total taxable property values in Nolan County have increased from $ 500 million in 1999 to $2.4 Billion in 2008 (projected $ 3.5 Billion by 2010) • Cumulative wind energy project property taxes paid in Nolan County from 2002 through 2007 = $30,357,617 • Property taxes paid to County of Nolan by wind energy projects in 2007 = $ 1,724,242 • School district property taxes paid by wind energy projects in Nolan County in 2007 = $ 12,778,691 • Cumulative school property taxes paid 2002 through 2007 in Nolan County by wind energy projects (Sweetwater, Blackwell, Trent, and Highland school districts) = $ 22,670,680 • New school construction in Nolan County school districts (2004 through 2010) = $ 24,000,000

  11. Wind Solar Transmission is a limiting factor, but is being addressed by the Texas PUC • Investing in transmission will allow us to get renewable energy to the major population centers of the state. • Transmission is technology neutral, benefitting all renewable energy sources equally. • Building more transmission actually saves money for the consumer. Every $3 spent on transmission equals $8 savings on the average power bill. • Increased transmission will eliminate pollution: 10% of CO2 and 12% of smog precursors from other pollution sources by replacing fossil fuels with wind and other renewable energy. Proposed Transmission

  12. Transmission Lines as Planned Source: Texas Public Utilities Commission

  13. Transmission Costs • Cost of Texas Transmission: $4.93 billion • DOE Estimate for Transmission Nationwide: $43 billion • Pickens Estimate:$40-$45 billion

  14. Cost less than gas or coal with CO2 sequestration Turns night-time wind to peak performer SECO study found storage Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  15. Pumped Hydro Thermal Ice Heat Compressed Air Energy Storage Batteries Super Capacitors Flywheels Developing an Energy Storage Portfolio program is cheaper than gas, coal or nukes and could create jobs Photos from DOE Office of Electric Delivery and Energy Reliability Report on Energy Storage Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  16. Efficiency and Renewables are cheaper than Coal and Natural Gas with CO2 prices Source: Union of Concerned Scientists Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  17. Downsides of Natural Gas Vehicles (NGVs) • Supplies of natural gas dwindling • The price of natural gas is notoriously unstable • Lack of distribution infrastructure and cost of deployment • NGVs run cleaner, but only reduce greenhouse gas emissions by 20% (approximately the same as ethanol)

  18. Why not Natural Gas? • It is plentiful, but we are beginning to import more and more of it • The price is notoriously unstable, subject to any small supply disruption or increase in demand. • Prices increased dramatically in response to supply disruptions from Hurricanes Rita and Katrina. Further disruptions are not only likely, but assured.

  19. Natural Gas supplies are dwindling

  20. Natural gas prices are up recently Both speculation and supply disruptions are blamed for recent price spikes, according to the DOE. (Natural Gas Weekly Update, Oct 1, 2008, http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp#Overview)

  21. Rita – Sep 24, 2005 Katrina – Aug 29, 2005 Natural Gas prices are incredibly volatile and susceptible to supply disruptions Following Hurricanes Rita and Katrina, natural gas production decreased less than 15%, but prices jumped 60%, not returning to a normal range for six months despite increased production. Source: EIA at http://www.eia.doe.gov/basics/quickgas.html

  22. Demand also fuels natural gas prices Any increase in demand could cause gas prices to skyrocket. Replacing half of our cars with NGVs could double the price. According to the Natural Gas Vehicles Association, replacing 5% of cars on the road with NGVs would lead to “only” 4% increase in gas consumption. Using regression analysis, we find that 22% of the correlation between demand and price is attributable to increased demand. Assuming both of these, by increasing NGVs on the road we could push up the demand on natural gas by a ratio of 4:5 for every percent of our cars we switch to NGVs, possibly doubling natural gas prices as we replace half of the fleet currently on the road. Years 2002 – 2007 are already above this trendline. We can assume this prediction to be even somewhat conservative. Sources: NGVA at http://www.ngvc.org/about_ngv/ngv_NGsupply.html , EIA at http://tonto.eia.doe.gov/dnav/ng/ng_pri_sum_dcu_nus_a.htm

  23. Honda Civic Hybrid 50% reduction in CO2 35% reduction in NOX Base price: $23,550 These reductions are for traditional hybrids- plug-ins will be higher Honda Civic GX 20% reduction in CO2 Nearly 100% reduction in NOX Base price: $25,090 Hybrid vs. Natural Gas

  24. Fueling Stations are limited

  25. Next-gen plug-in hybrids and all-electric cars are the future • Electrical generation is cheaper and cleaner with wind and solar on the grid • Using wind generated at night (off-peak) to charge our cars is the cheapest and cleanest way to fuel them. • Plug-in hybrids will generate 1/3 of emissions of a normal car at 1/3 of the fuel cost • 65% of commuters travel less than 30 miles at less than 35 mph in traffic, during which time a hybrid can run completely on battery power. The 2010 Chevy Volt will have a range of 100 miles on a single charge (before using any gas) and be able to plug into any home wall-socket. The Plug-in 2010 Prius at full charge can run its first 6 miles under 55mph completely on battery power.

  26. The Future of NGVs • NGVs are a part of the solution- they are a great option for fleet or government vehicles, or as a boutique fuel where refueling stations are already in place. • The Port of Los Angeles is already using Natural Gas trucks (along with next-gen diesel engines) in an attempt to eliminate all smog-precursors by 2015. • HEB has converted a portion of its truck fleet to NGV. Each tractor equals a NOx reduction of 1,300 lbs per year, equivalent to removing 63 cars from the road per year • We should, instead, focus on running cars off of electricity from renewable sources. • Biomethane should also be aggressively pursued as an alternative to CNG for cars.

  27. A Better use for Natural Gas: Combined Heat and Power Plants can provide 20-25% of our future energy needs using 1/3 the energy Recycle energy 3 times • For electricity • For hot water • For cooling Perfect for: • Hospitals • Hotels • Campuses • Some light industrial

  28. Additional Annual Cost of CO2 for Texas Plants Billion $ $20 $35 $50 $/Ton of CO2 Statistics Sources for this and previous page: Energy Information Administration , Union of Concerned Scientists, and Wachovia Capital Markets, LLC Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  29. Federal Regulation of Carbon Dioxide Emissions is a Matter of When, Not If Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  30. An Alternate Path Maintaining energy reserves through efficiency. Developed by Environmental Defense and Others Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  31. Planning for CO2 reductions creates 84,000 new jobs and saves $200-700 per customer Presentation by Tom “Smitty” Smith – Public Citizen’s Texas Office

  32. The 2030 Energy Plan The goal: 100% reduction in coal and oil consumption in America by 2030 Renewable Electricity: National Renewable Portfolio Standard • 300 GW of onshore wind energy • 80 GW of offshore wind energy • 170 GW of solar photovoltaic • 80 GW of concentrated solar power • 15 GW of conventional geothermal • 65 GW of enhanced geothermal. Transportation • Increase in sales of plug-in and hybrid vehicles to 90% of all sales by 2030 (reaching 42% of the U.S. vehicle fleet in 2030) • Increasing conventional vehicle fuel efficiency to 45mpg by 2030 • Acceleration of the vehicle fleet turnover from 19 to 13 years (increasing sales by 31%) Transmission/Infrastructure: 32,000 kilometers of new transmission lines, investment in infrastructure for the massive deployment of plug-in cars and hybrids Others: a price on carbon dioxide, fixed long-term tax credits and incentives, funding for R&D and a smarter national grid that can cope with intermittence, a National Energy Efficiency Standard for appliances, buildings, vehicles, national decoupling of utility profits from sales, and investment in education to educate workers to fill new high tech green jobs.

  33. Conclusions • Any energy plan should benefit consumers, aimed at giving residents the choice of the cheapest, cleanest energy possible. • Wind energy, transmission lines, efficiency and storage are easily deployable NOW. • Investments in clean energy will reap economic benefits • We should not replace one expensive, imported hydrocarbon with another one, but NGVs can be a limited part of the solution.

  34. Pickens has re-energized the debate He has over 1 million signers to his petition Oklahoma Governor Brad Henry signed the Pickens pledge urged the next President and Congress to enact energy policies that address renewable and alternative fuels such as wind power and natural gas in an effort to reduce oil imports. The only way to beat organized money is with organized people Sign up now More conclusions

  35. Contacts • Tom “Smitty” Smith, Public Citizen Texas www.citizen.org/texaswww.texasvox.org • PickensPlan.com • CleanEnergyForTexas.org • Energy Plan: googleblog.blogspot.com/2008/10/clean-energy-2030.html

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