MACKINAC ISLAND – The United States needs to seize on the opportunity to quickly transform to alternative domestic energy supplies from imported oil, T. Boone Pickens said Thursday, adding that the country is at an energy tipping point and Americans are ready for change.
Gov. Jennifer Granholm made a strong pitch for alternative energy as part of diversification and rebuilding of an economy that will not resemble the prior auto-based economy. She said Michigan is poised to be the hub for wind and battery alternatives, based in part on the facilities and expertise of the hard-hit auto industry and its suppliers and location, and the state has “put more on the table” to support battery development and manufacturing than any other state.
Pickens, the one-time Texas oil tycoon who now describes himself as an energy executive, said he is for wind, solar, ethanol and battery technologies. “I’m for everything, as long as it’s American,” he said. “We’ve got to get off of oil from the enemy.”
He assailed national leaders for 40 years of inaction in formulating an energy policy even as imported oil consumed an ever larger proportion of U.S. energy use. “This administration has an unbelievable opportunity to solve the problems of America,” he said.
He said he is for a significant increase in the gasoline tax, something he noted Europeans have done for years as they sought ways to reduce consumption, but he noted it is easier for him to say that than a politician. “They tend to get a tight collar,” he said.
Granholm, who has proposed a new transportation plan that does not mean an immediate tax increase but likely would over time as prices rise, did not join Pickens in that regard. “It’s hard, because our citizens are hurting now,” she said.
Pickens said cheap oil has been a big reason why the country has never followed through on an energy policy. A significant tax increase on gasoline forces changes in consumer behavior, he said. Noting the 25 percent of oil resources that the United States, with 4 percent of the world’s population, consumes, he said, “Somebody has got to explain to the American people that this cannot go on.”
The rising cost of importing oil, which he predicted could go to $300 a barrel from the $140 level reached a year ago, would crowd out money for other needed programs such as health care and education.
Pickens has often pushed for greater use of natural gas and expressed his criticism that other countries are much further ahead in adopting the technology for transportation. “It’s cheaper, it’s cleaner and it’s ours. It’s a window of opportunity we cannot pass up,” he said.
The governor and Pickens agreed that it is important for the United States to develop battery manufacturing, with Pickens saying it does no good to trade imported oil for imported batteries.
His vision is for batteries for light vehicles and natural gas – a resource the United States has in abundance – for heavy loads.
Granholm said the state has unleashed a “bazooka” program to support battery development with a $700 million package, and Michigan companies are preparing to tap into $2 billion in federal grants to support that technology. “We want to be the domestic place where batteries are produced,” she said.
Granholm delivered a plea to the members to help spread a message that Michigan has resources for leading an alternative energy future, based on manufacturing of wind turbines, of new generation of batteries and cellulosic ethanol from wood byproducts.
Indeed, it was a message that seemed to not to have reached Pickens, leading to a somewhat awkward moment when a member of the audience asked Pickens if he was going to invest in Michigan. “What’s there for me to invest in?” he asked.
Granholm said she would be meeting with Pickens later privately and would talk about those opportunities.
But in particular, she said Michigan stands out as the second-highest potential nationally to harness wind power, and it can bolster that with its manufacturing and engineering advantages and available space that once housed auto plants. “We can be the central point for manufacture of turbines,” she said.
“We’ve got all sorts of natural assets, but we’ve got to recognize that capitalizing on those assets means things cannot be done as in the past,” Granholm said. “We can’t sit back and wait until the auto industry rebounds.”
Pickens also took issue with one of the alternative energy scenarios that the governor promoted: installation of small wind turbines at individual homes.
“That’s a dream,” Pickens said as the governor reached over to respond, “Come on, work with me.” But Pickens said, “It’s not going to happen. The guy next door is not going to want a turbine.”
Granholm opened her remarks with a somber observation about continuing bad economic news for the state, and later noted Michigan is on track to lose 1 million jobs between 2000 and 2010, with one in four automotive jobs lost. The session followed the morning news of bankruptcies by Visteon and Metaldyne, and the looming bankruptcy of General Motors (with sources in Detroit saying the company plans to make its filing on Monday, the deadline for doing so).
“We are not going to sit back and allow this to go into a spiral,” Granholm said in pushing for the alternative energy strategy.
Pickens said he has followed Michigan’s troubles, but gave a confidence boost to Granholm, saying, “The way you’re going to get out of the problem is leadership and you’ve got a governor who is a leader.”
Speaking to reporters, Granholm said the summer will be a critical time for major suppliers in the automotive sector as they seek to retool. “People need access to capital,” she said. “These suppliers are in critical shape.
“Whatever is on the backside, Michigan is going to be a much different state.”
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