Wednesday, October 29, 2008

Pickens’ natural gas plan makes no sense and will never happen

[Climate Progress has covered the Pickens Plan many times since Memo to T. Boone Pickens: Your energy plan is half-brilliant, half-dumb. Here Earl Killian makes a strong analytical case that the “half-dumb” part of the plan is in fact a wasteful, wildly impractical — if not outright absurd — distraction.]

Thomas Boone Pickens is a billionaire who made his money in oil and corporate takeovers. He began investing in natural gas in 1997, and in wind power in 2007. In 2008, he went public with the Pickens Plan via a website and a well funded advertising campaign. Here we analyze the Pickens Plan, as presented here, which begins by correctly observing:

America is addicted to foreign oil. It’s an addiction that threatens our economy, our environment and our national security.

The Pickens Plan as presented consists of two parts:

  1. Take the natural gas that we currently use to generate electricity in the U.S., and use it to fuel transportation instead, and
  2. Build wind power to produce the electricity lost in step 1.

The Plan As Presented — CNG vs. Electricity

The plan is not spelled out in detail, and already appears that it is being interpreted or misinterpreted to be whatever listeners want it to be. Let us for the moment accept this plan as presented, and look at what it means.

The Department of Energy (DOE)’s Energy Information Administration (EIA) publication Electric Power Annual 2006 has most of the information needed. Table ES1 has the power generated from Natural Gas (NG) as 813 Tera Watt hours (TWh, or million Megawatt hours). It gives the NG consumed as fuel for that as 6,869,624 million cubic feet (ft3). From these two numbers and the energy content of NG (its Lower Heating Value, or LHV) of 301 Wh/ft3, we can calculate the efficiency of generation as 39%. New Natural Gas Combined Cycle (NGCC) plants are up to 60% efficient in comparison, e.g. the GE H-System turbines and the Siemens Gas Turbine SGT5-8000H, but there are many older non-Combined-Cycle plants out there.

So Mr. Pickens proposes to divert 6,869,624 million ft3 of NG (about 20% of NG usage in the US) from generating electricity, and use it for transportation. In place of those NG power plants, Mr. Pickens proposes that we build wind turbines sufficient to generate at least 813 TWh/year. I say at least that much wind, because it is difficult for wind to substitute for NG electricity. NG power plants are often used to fill in gaps between supply and demand on the grid. Such “peakers” must quickly turn on and generate power whenever there is a mismatch. Wind on the other hand generates based upon weather, not the directives of grid engineers. Mr. Pickens does not spell out on his webpage how this mismatch is to be rectified. Nonetheless, let us proceed with a simple 813 TWh/year of wind.

We now compare how much of US passenger vehicle travel can be powered by 813 TWh of electricity and by 6,869,624 million ft3 of NG. To estimate the latter, go to and click on first 2008, then Honda, then Civic CNG. You see 28 MPG, and the footnote

Compressed Natural Gas (CNG) is normally dispensed in “equivalent gallons” where one “equivalent gallon” is equals to 121.5 cubic feet of CNG. The fuel economy for natural gas vehicles is shown in miles per gallon-equivalent.

So dividing 28 by 121.5 you get 0.23 miles per ft3. So if you take the Table ES1 NG quantity, and multiply by 0.23 you get 1,588 trillion miles. That is 57% of the 2.76 trillion passenger vehicle miles traveled in the US in 2005. This is only for vehicles as small and aerodynamic as a Honda Civic; a smaller percentage of the US fleet could be powered by CNG. The rest would be presumably powered by gasoline under the Pickens Plan.

Now let’s estimate miles that could be powered by electricity. A Lithium-Ion EV the size of the Honda Civic CNG should require at most 250 Watt hours per mile (Wh/mi) at the garage plug, probably less. At the power plant that is 270 Wh/mi. So take the 813 TWh, divide by 270 Wh/mi, and you get 3.01 trillion miles, which is 109% of the 2.76 trillion miles driven in the US in 2005.

Which would you choose, 57% or 109%? It seems pretty straightforward that electric vehicles beat CNG vehicles almost 2:1, even using existing NG power plants. If the US upgraded its NG power plants to be 60% efficient, instead of 39% efficient, we would have 54% more TWh, or even better, use less 35% less NG.

Most importantly, while 813 TWh/year of wind energy would have a hard time substituting for 813 TWh/year of NG energy, because of intermittency. There are ways to address this, primarily by linking wind to hydro and solar, and building excess wind. However, intermittency would not be a problem for charging EVs. In a build-out of this scale, smart grid technology would be used to make sure that EVs wait to charge when wind power is producing beyond what the grid requires, and that they throttle back on charging when there is a lull in wind. This makes EVs an excellent consumer of wind energy. A vehicle driven 12,500 miles per year averages 34 miles per day of recharge, or 8,562 Wh at the plug. For a 208V, 32A circuit, this charge can be accomplished in just 1.2 hours. Since the vehicle is plugged in for approximately 9 hours a night, this represents flexibility to respond to wind conditions. If the wind fails to provide enough energy all night long, then either vehicles can remain undercharged (for PHEVs this just means using a little more gasoline), or for vehicles that require a full recharge for the next days usage, the NG “peakers” could be used at night to meet the demand (normally “peakers” are completely unused at night).

It seems particularly foolish to propose a massive infrastructure change to a fuel as inefficient as CNG. If we are to change technology, it is time to abandon Internal Combustion Engines, not change from one fossil fuel to another.

The Real Pickens Plan

Perhaps you noticed the really strange thing about the Pickens Plan. It calls for us to shut down all the NG power plants in the US. The investors in those plants would surely object. Politically, it would be necessary for the US to compensate them. In essence the US would have to buy the plants to shut them down. How likely is this? Moreover, how likely is the US to transition such a large fraction of its fleet to NG? If this part of the plan is unlikely, why is Mr. Pickens proposing it? What is the likely outcome of making this proposal?

What Mr. Pickens likely expects to happen from his proposal is: (1) get Congress to renew the Renewable Energy Production Tax Credit (PTC), and (2) convince a few additional Americans to use NG as a transportation fuel.

Renewal of the PTC is an urgent priority for the US, and Mr. Pickens plan could well succeed in unblocking Republican opposition to the PTC in Congress (the Senate has just done so on a 93-2 vote). The wind and solar industries in this country need a stable environment to receive private investment, but unfortunately Congress just barely manages to extend the PTC for a single year at a time, creating uncertainty for renewable energy investors, and slowing private investment here. As a wind investor, Mr. Pickens stands to benefit from a PTC extension. Thus half of the Pickens Plan is good for the Earth, for the US, and for Mr. Pickens.

The second half of the plan is to increase demand for NG by convincing more Americans to use it as a transportation fuel. As discussed above, the US is unlikely to close any NG power plants, so this has the effect of increasing total demand for NG in North America, and thus increasing the price. As an investor in NG, Mr. Pickens stands to profit from any increase in NG demand and price. This half of the plan is good for Mr. Pickens, but bad for the Earth and the US.

Climate progress readers already know that electric transportation is the answer to the multitude of problems facing the US and the world, including Peak Oil, Global Warming, national security, and economic security. The Pickens Plan is a diversion from electric transportation that wastes time.

–Earl K.

* More -Is T. Boone Pickens Selling Off Some Wind Turbines?

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