Skip to main content

Pickens Fueling Natural Gas Push

The longtime oilman wants to cut our dependence on foreign oil.

OKLAHOMA CITY -- If T. Boone Pickens gets his way, Richard Kolodziej can finally buy himself an American-made car.

Kolodziej drives a


(HMC) - Get Honda Motor Company Ltd. Report

Civic GX, the only vehicle made in the U.S. that runs on compressed natural gas. If he lived in Europe or South America, he could choose a CNG-powered


(F) - Get Ford Motor Company Report

or Chevy instead.


General Motors

(GM) - Get General Motors Company Report

makes 18 or 19 different models" of CNG vehicles, Kolodziej says. "Around the world, everybody makes them."

As president of Natural Gas Vehicles for America, Kolodziej keeps track of such things. He can tell you how many CNG vehicles travel the globe (8.7 million), rattle off the countries that have embraced them already (Argentina, Italy, even Iran) and estimate the cheap price of their fuel (between $1 and $2 a gallon). At some point, he also admits that just 120,000 CNG vehicles (or 1.4% of the worldwide fleet) dot his own country's highways.

These days, however, Kolodziej prefers to speak in the future tense. He talks a lot about "

The Pickens Plan ," a bold energy program that would finally transform CNG into a mainstream transportation fuel.

To be sure, the U.S. faces no shortage of that particular fuel. Thanks to recent discoveries by big drillers like

Scroll to Continue

TheStreet Recommends

Chesapeake Energy

(CHK) - Get Chesapeake Energy Corporation Report

, experts say, the U.S. has managed to boost its reserves and now has enough natural gas to last another century.

Still, Pickens feels that the U.S. could put that fuel to better use. The longtime oilman estimates that the U.S. relies on natural gas to generate about 22% of the country's electricity. If wind was used to fuel those power plants instead, he says, it could pump that natural gas into vehicles that run on oil-based fuels right now. By focusing first on the fuel-hungry vehicles that move the nation's goods, he concludes, the U.S. could slash its oil consumption by one-third over the course of the next 10 years.

"This is nothing more than a bridge to the next fuel," Pickens explained during a Senate hearing on energy security this summer. "We've got plenty of natural gas to do what I'm talking about, and we can do it for 20 or 30 years."

Politicians have already started to respond. This summer, as gasoline prices zoomed to record highs, Rep. Dan Boren (D, Okla.) introduced a new bill that embraces key portions of the Pickens Plan. That measure, popularly known as the "Nat Gas Act," has already won the kind of broad-based support that generally spells success.

"Everyone from the Sierra Club to the oil-and-gas companies to the auto manufacturers has expressed support for the bill," Boren says. "I think there's a real good chance that, after the election, it will become law."

In fact, Boren says the U.S. House has included one of the proposal's key measures in a larger energy package already.

That particular incentive would double the tax credit for devices that allow drivers to refuel their CNG vehicles at home. Right now, those home-refueling stations sell for about $5,000 apiece. By taking advantage of the new credit, drivers would recoup $2,000 - or 40% -- of that cost.

From there, the Nat Gas Act would create additional refueling options. For starters, Boren says, it would encourage gas stations to add CNG pumps by offering tax credits to cover part of the cost and cheap financing to help out with the rest. In addition, he says, it would require big oil companies to install at least one CNG pump at every gas station that they own.

Sensing possible backlash from Big Oil, Pickens has already presented a compromise of sorts. This summer, he encouraged lawmakers to shelve the so-called "windfall profits" tax on big oil companies if they agree to spend that money on CNG pumps instead.

Right now, experts estimate, fewer than 1,200 CNG refueling stations serve the entire country. With help from the Nat Gas Act, however, that number could explode to 20,000 and beyond.

"If we build the infrastructure, I think that , within 18 months, we could have a lot of cars running on natural gas," Boren says. "The resources are there. The technology is there. We just need the bill to become law."

Heavy fuel users, eager to save money at the pump, have moved forward on their own. Once the economics made sense, they added more CNG-fueled vehicles and built their own CNG stations so they would have a ready fuel supply. They can now refuel their vehicles on site, filling their huge tanks between shifts or overnight, and then travel long distances at their convenience.

Transit buses have welcomed this opportunity. Other organizations with large vehicle fleets, such as delivery and utility companies, have embraced the trend as well.

"We have one of the largest natural gas utility fleets in the nation," says


(PCG) - Get Pacific Gas & Electric Co. Report

spokesperson Jennifer Zerwer. "We also own 39 natural gas fueling stations -- and many of them are open to the public."

In essence, PG&E looks like an early adopter of the Pickens Plan. Going forward, Pickens wants to see all major vehicle fleets -- from taxicabs to police cruisers to utility trucks -- shift to natural gas. At the same time, he wants private companies to install plenty of CNG pumps so that ordinary citizens will have access to the affordable fuel as well.

Already, Honda plans to double the number of CNG-fueled Civics that it makes for the U.S. Meanwhile, rival


(TM) - Get Toyota Motor Corporation Report

has expressed clear interest in entering the market as well. Going forward, experts predict, U.S. car makers will finally join the game.

"Whether it happens this year or next year, I don't know," Kolodziej says. "But I am confident that both GM and Ford will be making natural gas vehicles soon."

Pickens hopes so. Still, he feels confident in his plan regardless. If the U.S. merely uses CNG for the heavy-duty vehicles that move its goods, he predicts, it could cut its oil use by almost 40% -- and eliminate oil purchases from hostile nations entirely - while taking a huge step toward energy independence.

"I think it works," Pickens says. "You know, if you said, 'Can you assure me that it does?' I know that some part of it does. Enough of it does that we will be helped."