For me, the crux of Jenkins' remarks, some of which I had already written prior to his editorial, were, as I wrote in that earlier post,
"Echoing my own position, as expressed in this post from February of this year, Jenkins calls into question Pickens' outrage that America spends some $700B per year for foreign-produced oil.
He characterizes the purchases as a fair exchange of value for value. Then lampoons Pickens by asking if he would be similarly exorcised to learn that the US also accounted for 23% of worldwide advertising purchases?Going beyond my economically-based criticism of Pickens' hand-wringing over foreign oil, Jenkins then finds justifiable fault with the description of Pickens' effort as a 'plan.'
He's right. I have, in the past few weeks, heard several people question the viability of a LNG car. No less a car salesman than Mike Jackson, CEO of AutoNation, pointed out that such a car 'has no trunk,' and can't be driven anywhere, anytime. It is pretty much restricted to being a short-distance commuting car.
Further, I've read some reports that the vaunted wind power on which Pickens hangs so much of his 'plan' is not quite as efficient as is claimed. Allegedly, California wind farms generate only about 20% of their rated power."
Pickens attempts to refute Jenkins', and my, criticism that the fact that the US imports oil at $700B/year is not, by itself, a problem. Unfortunately, Boone doesn't have a clear, disciplined approach to economics in this instance.
His retort is essentially a restatement of his original cry of alarm. Nowhere, for example, does he explain why it is okay for the US to import much of its steel, and probably all of its titanium, as well as some other rare, strategic minerals used in defense production.
If Boone could tell us why oil is so special, his position might be more tenable. But he does not refute Jenkins', and my, suspicions that America makes good use of that oil, creating much more than $700B of value-added which is, in turn, bought by others around the globe.
Sure, relying on others for 70% of a key commodity is risky. But that's a different argument, as Jenkins and I both noted, than the economic one. Pickens mixes the two in an intractable tangle of verbal warnings.
The remainder of Pickens' editorial simply restates his by-now familiar wind/natural gas concepts.
I write concepts because, as Jenkins noted, Pickens never provides details of how these alternative energy sources will magically be distributed across the continent.
Pickens ends by claiming he has now represented his plan, writing,
"My father used to tell me that a fool with a plan is better than a genius with no plan. So I ask, what's Mr. Jenkins's plan?"
In my opinion, Pickens still doesn't get it. Anyone can stand up and say we should use domestic natural gas and wind power. Fine. We should drill for oil offshore and in ANWR, too.
But that's not a plan. It's more of an overall approach to substituting domestic energy sources for imported oil, despite potential economic penalties, in order to provide more security for our energy sources.
Although Pickens is fond of citing how few of the world's natural gas-powered vehicles are in the US, he avoids telling you what Mike Jackson does- that those cars can't replace all the capabilities of the current, modern, average US car.
If yesterday's editorial was Boone Pickens' best reply to Holman Jenkins' criticism of his energy 'plan,' then I think Boone has a lot of work to do before anyone should follow his prescriptions.
He may be correct in warning that we are sending $700B to potential or real enemies, in exchange for their oil. But that does not mean you should necessarily accept his concept for a solution.
As I stated in my original post on Pickens' energy plan, and Jenkins echoed, it is unclear to me that, merely on economic bases, importing $700B of oil is a bad thing for the US economy. We import plenty of other commodities, goods and services, on the bases of David Ricardo's 'law of comparative advantage.'
If, however, we now believe that it is vital to keep US dollars out of the hands of those who own oil around the globe, then we can and should expect to pay an economic price for producing domestically the substitutes for imported oil.
Isn't that going to result in a lowering of American standards of living, and perhaps some inflation, as well?
How do you answer those questions, Mr. Pickens?