NEW YORK (Reuters) - Texas energy tycoon T. Boone Pickens on Tuesday called for a massive switch to natural gas as a transportation fuel and a boost in wind power in a plan aimed at reducing U.S. foreign oil dependence by a more than a third.
The Pickens Plan, which includes exploiting domestic natural gas supplies in new areas like East Texas and Appalachia, could replace 38 percent of U.S. oil imports, he said.
“U.S. natural gas can replace foreign oil. It’s the only natural resource we have that can do that,” Pickens said during a press event for his energy plan.
The 10-year plan would reduce the annual U.S. oil import bill of $700 billion, at oil prices of $140 a barrel, by hundreds of billions of dollars, he said. The country imports about 70 percent of its crude.
His plan comes as U.S. consumers who have already been hit by the credit and housing crunches are now facing record gasoline prices as oil prices rally on rising demand from developing countries and violence in the Middle East.
Pickens, a life-long Republican, hopes to discuss the plan with both U.S. presidential candidates. He is launching a television advertising campaign, to cost tens of millions of dollars, for the plan.
Earlier this year, Pickens announced he would spend $10 billion to build the world’s biggest wind farm in Texas that should start generating power by 2011.
When asked if his plan is a way to ensure his investments would make him even richer, the 80-year-old billionaire said he’s not concerned about making still more money.
Pickens’ vision has two steps.
First, investors would boost development of wind farms, particularly in what he called the U.S. wind corridor, a slice of the country from Texas to North Dakota. It’s an “unbelievable asset that’s not been touched,” he said.
The extra wind power, according to the plan, would replace the natural gas the country burns to generate power. Currently the country gets 22 percent of its power from natural gas.
Then, the freed-up natural gas could be used to power vehicles, but the country would have to convert a large share of its vehicles to run on compressed natural gas.
Pickens said the cost savings would reduce oil prices “substantially.” But he stopped short of predicting by how much.
“You never know how much demand will rise in places like China and India,” said Pickens, who heads the hedge fund BP Capital. “I don’t think we’ll ever see prices below $100 a barrel.”
Analysts said the plan was no simple solution.
“The U.S. will indeed use a lot more wind power in coming years. In that sense, Pickens is a visionary,” said Chris Kostas, a senior natural gas analyst at Energy Security Analysis Inc in Boston.
“It’s his idea of using natural gas to convert a large transportation fleet that’s less convincing,” said Kostas, adding that it would be hard to use enough of the fuel to cut global oil prices.
A new system of natural gas-filling stations would have to be built and cars would have to be converted to run on the fuel.
Pickens acknowledged the plan has some high hurdles.
The government would need to create power transmission corridors from the heart of the country to the coasts, he said. The effort would have to be comparable to the interstate highway system former U.S. President Dwight Eisenhower created during the Cold War to improve the mobility of the military, Pickens said.
“This comes down to the closest thing to war, while not having war,” Pickens said about the imperative for the U.S. to tap its own natural resources to reduce its foreign oil habit.
Additional reporting by Matthew Robinson; Editing by Christian Wiessner