Pickens Plan

I'm not entirely sure what to make of the new energy plan from T. Boone Pickens, but his piece in the Wall Street Journal is worth reading.  After detailing the environmental, economic and foreign policy problems that our reliance on oil involves, Pickens writes...

I want to reduce America's foreign oil imports by more than one-third in the next five to 10 years.

How will we do it? We'll start with wind power. Wind is 100% domestic, it is 100% renewable and it is 100% clean. ... In 2008, the Department of Energy issued a study that stated that the U.S. has the capacity to generate 20% of its electricity supply from wind by 2030. ...

My plan calls for taking the energy generated by wind and using it to replace a significant percentage of the natural gas that is now being used to fuel our power plants. ... We can use new wind capacity to free up the natural gas for use as a transportation fuel. That would displace more than one-third of our foreign oil imports.

The Pickens Plan is outlined at his website.   My own thoughts...

• When a billionaire puts a lot of his own money behind a project, it's a good idea to pay attention. 
• If this is such a good idea, why isn't profit and success sufficient to drive us in that direction? 
• Joseph Romm raises interesting questions about what wind power should replace, as well as the efficiency of natural gas in transportation.  So does FuturePundit.
• Sending money to tyrannies is a security problem, but we don't need a re-run of the old "buy American" protectionism.
• I believe more domestic production of oil is a marginally useful thing, but a long-term solution probably requires (short term) diversified energy sources - more plausible as technological progress allows us to capture, e.g., wind and solar energy more efficiently and to increase battery storage capacity - and (long term) nuclear energy.
• I believe the lack of fueling infrastructure is a significant barrier to using natural gas for transportation.
• I believe the scientific evidence that anthropogenic climate change is occurring is solid. 
• I believe the cost of oil is significantly higher than the price of oil and the negative externalities  of our oil-driven economy are a problem that needs to be resolved.
• I believe regulatory solutions to environmental problems are likely to result in path dependencies and inefficiencies that do more to shift costs around than to actually address them.  An effective solution must be market-based so that it works with incentives, rather than against them.   To Pickens credit, that seems to be the direction in which he is pressing.  With his own money.

Overall, I'm glad to see Pickens launching this project.  Private businesses charting profitable paths forward is far better than governments picking winners and losers.