Saturday, August 09, 2008

Boone Pickens, The New Man On Horseback

I confess to becoming worried now about Boone Pickens' activities in support of his new energy 'plan.'

Going back to February, when I wrote this post on Pickens' wrongheaded contentions on CNBC, it has worried me that Pickens uses specious logic regarding US spending on one imported commodity- oil.

Holman Jenkins agreed with my assessment in his WSJ column last week, on which I wrote, here.

I wrote this in the earlier linked post,

"Boone went on to cite, as I noted in that prior post, the continuing trend toward nationalization of oil reserves. He pointed out that Exxon pumps only 3% of the world's current 85B bbls pumped per day. He then cited a statistic that the US has 5% of the world's population, but consumes 25% of its oil production. That this "isn't fair."Maybe, maybe not.

What Boone didn't note is that the US produces 25% of world GDP, using 25% of oil, but only 5% of population.

Doesn't that make us a productivity wunderkind?So here's my question: what if Boone, though well-intentioned, is wrong?Could he be overlooking Ricardian economics?How much do we export? Is our oil usage for our 300MM population, or our 25% of global GDP? on the latter basis, it seems actually fair.
Don't we effectively produce for export, as well? Can you actually align US oil consumption purely with domestic consumption, or is it, in a value-added-chain manner, an input into GDP, too?

Don't our exports of intellectual property-based value-added goods and services represent a usage of imported oil? Just like we import aluminum, steel, titanium, diamonds, and a dozen other important, necessary commodities for manufacture of US-sourced goods?"

I'm worried that Pickens, because of his financial resources, including his own wealth, is quickly becoming a 'man on horseback.' That is, a man who begins to hold sway simply by causing a public outcry and and calling others to his 'plan,' no matter how cockeyed it may be.

For example, why doesn't Pickens mention synfuels, as I did in this June post? Because Mike Jackson of AutoNation doesn't agree with Pickens on the production and sale of LNG vehicles.

Doesn't it make much more sense to fill currently-produced vehicles with synfuels made from coal? Then use nuclear and natural gas power sources to produce electricity?

Rather than spend additional resources to design and produce both entirely new vehicles, as well as a new LNG retail distribution system and aftermarket servicing infrastructure?

But it's beginning to seem as if disagreeing with Pickens means you are against 'progress.' He's now appearing on CNBC to report on how many Americans are flocking to his cause, while dismissing critics lightly.

The last thing we need now is another wealthy, prominent American, in addition to Congress, thinking and acting badly concerning the global energy situation.

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