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Recently one of my followers on Twitter sent me the NY Times Op-ed piece by Joe Nocera about newly introduced legistlation this week with bi-partisan support. The article is titled "Pass the Boone Pickens Plan Bill"  (http://www.nytimes.com/2011/04/12/opinion/12nocera.html?ref=opinion) 

For those of you unfamiliar the Picken's plan calls for deep subsidies to be given to the U.S. Natural Gas Industry to help develop infrastructure and production of Natural Gas and offset America's need for imported oil. 

Accoring to Wikipedia, "A subsidy (also known as a subvention) is a form of financial assistance paid to a business or economic sector." Subsidies are put into place to pay or help pay for something that a government wants to promote but that is not economically viable by normal market forces on it's own. Such is the case with the Picken's Plan.  

Make no mistake the Picken's plan is about politics not economics. Natural Gas is not a cheaper source of energy than oil. To put it into perspective 1 barrel of oil = 42 US Gallons. You would need over 1,000 barrels of oil equivalent (BOE) in Natural Gas to contain as many calories (energy) to make the same 6K megajoules of electricity. Where one megajoule (MJ) is equal to one million (10⁶) joules, or approximately the kinetic energy of a one-tonne vehicle moving at 160 km/h (100 mph). 

If you listen carefully to T. Boone Pickens you will see he is not claiming that Natural Gas is a better (more efficient) fuel than oil. Only that it is here at home and that it's cleaner and you won't have to import it from "our enemies" abroad.

Hence, the Boone Pickens plan is a protectionist or political or some have even suggested a racist plan but what it's not is an economic plan to provide cheaper energy to the USA. Conservation, Nuclear and Biofuels are all better alternatives to the Picken's plan in terms of $/BTU. Pass the buck to the tax payer for a more expensive solution is not a good and sound plan and that is why it is not endorsed by the US Department of Energy, CERA, PIRA or the EIA. Nevertheless, it does make for good headlines and political spin at a time of high oil prices. I still do love twitter though just I learned not a good forum to be debating US energy policy! I hope my follower reads this and unblocks me! If you see this Charlie, I promise no more tirades!  

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