On July 8, oilman T. Boone Pickens launched a personal initiative to promote wind power as a primary renewable energy source for the United States. Pickens wants the next U.S. president to lead the nation to 20% wind power by 2018 by tapping a “wind corridor” that runs from the Northern Midwest all the way through Texas. Pickens himself has invested in wind energy in Texas.
Why would an oilman take on this kind of public environmental project?
A better question is, why wouldn’t Big Oil take on this kind of project? It’s clear that alternative and renewable energy is a big part of America’s future, and oil is already fast becoming a much smaller part. Pickens points out at his website PickensPlan that in 1970 the U.S. imported 24% of its oil; now we import nearly 70%. This dependence on foreign oil, while lucrative in the short term for the oil companies, has resulted in the greatest outflow of money from the U.S. to the rest of the world in history.
Though most of our oil is imported from Canada, much of this lost U.S. wealth is flowing to nations with which we have very troubled relations: Iran, Iraq, Saudi Arabia, and Venezuela. The painful result is that the U.S. economy is currently experiencing a contraction the like of which has not been seen since the Great Depression. When a country has to import its most basic energy resource at great cost, that country is in trouble economically. We cannot compete effectively in a global economy when we have to spend that much money just to get a business running. We are rapidly losing ground on the world stage.
While Big Oil may have made some big short term profits in recent years, those profits have greatly lowered the average American’s standard of living. They have destroyed any kind of positive feeling consumers might have ever had toward Big Oil. How many people do you know (outside of actual oil company employees) who do not hate the oil companies? No ad campaign showing waving fields of corn and pristine oceans can counteract the rancor that currently exists in the hearts of most Americans for Big Oil.
Poverty is radical; wealth is conservative. No one changes course while being deluged with money. So it’s not surprising that innovation is not exactly the middle name of the CEOs who lead successful corporations, unless they happen to be working in the field of information technology, where innovation basically is the product. Most other corporations just hire big publicity departments to spin what is already working to make it palatable to the public at large. In fact, if the corporations are doing well enough, they don’t even care that much about the consumer; they care about the stockholders.
But one thing big corporations do understand is profit. CEOs understand it keeps them in their overpaid jobs. Stockholders understand that it makes them money.
As the graphic above shows, the U.S. is, Pickens puts it, “The Saudi Arabia of Wind Power.”
All we have to do is invest in infrastructure to tap that power.
Big Oil can stay on its current course, winning the enmity of the world and destroying the environment and the political peace, or it can lead the way to energy independence and thereby nearly monopolize the profits that will come from renewable technologies. Wind and solar are often pooh-poohed because they take significant initial investment before they pay off. But so does oil. Without refineries, crude oil is nearly worthless, and we have not built any new oil refineries for over 30 years because of the huge cost.
Instead of investing even more money in oil, why not invest it in renewable energy? When corporations start to see the potential for profit in these technologies, no amount of Congressional oversight and bumbling will be able to stop corporate investment in them. We won’t be looking for ways to promote renewable energy, we’ll be looking at anti-trust laws to make sure the profits are being properly shared amongst the prospective players.
Pickens will no doubt be the butt of much cynical critique from pundits who note the potential for big profits down the line for Pickens. So what? The market works or it doesn’t. Right now it is working by showing us corporate failure after failure; profits without product, policies so self-serving and harsh they’d be despicable even if they worked. But they don’t work!
Big Oil should back renewable energy because it works, because the potential for profit is enormous, because it is what the future has in store for us if we do not fail entirely. They will want to be on the cutting edge, not left behind. Forward thinking is not their strong suit. But we’re only talking ten years forward here.
Even I know how to make a ten year plan. My job at a regional bank is pretty shaky right now. Anybody out there need a renewable energy CEO?