If Pickens’ plan becomes a success, the world could experience oil glut as it happened in the mid-1980s and 1990. This happens since the United States is the leading importer of natural gas and oil. This means that there would be a falling demand or a shift in demand for oil for the U.S, and that would lead to a surplus of oil in the markets as shown in Fig. (a). As a result, the prices of oil would reduce as well as oil revenues for the oil producing countries. This collapse of oil prices would benefit oil-consuming countries such as Europe, Japan and third world countries. Therefore, after some time, the demand of oil would increase, but as oil is becoming depleted, the supply is steadily decreasing. This would lead to the price increase for this scarce commodity as shown in Fig. (b). This scarcity of oil will definitely affect the global economy. As a result, governments could be turning towards this alternative source of energy making oil have decreasing demand in the future. The government should turn to renewable energy, as there are a number of benefits: reducing the effects of global warming, providing creation of green jobs, reducing pollution, enabling countries to move away from foreign oil dependency and also enabling us to reduce the depletion of the environment.
T. Boone Pickens proposed this national energy strategy in 2008, which intended at reducing the U.S dependence on foreign oil imports. In his plan, he brings out three main aspects: using wind energy to produce 20% of the U.S electricity needs by 2020, using solar power to supplement wind power or as an alternative to it. This plan describes the construction of many wind turbines in the Great Plains in America, ranging from North Dakota to Texas, which would allow for the shift of natural gas from the production of electricity to the transportation sector, especially to heavy vehicles. The major benefit of substituting natural gas with wind energy would be a significant decrease in carbon release from the production of power. Though the adoption of wind energy faces a number of challenges, when Pickens’ plan becomes a success, the U.S. is going to achieve its objective of becoming energy independent in the future.
Financial incentives are necessary to encourage adoption of the Sun or the wind as the preferable sources of electricity generation. Politicians should also advocate for the trade system to accelerate adoption of low carbon releasing sources of energy. This policy will raise the prices of fossil fuels, reduce their demand and drive towards the embracing of renewable power generation. However, raising the prices of conventional electricity production would have effects on the financial welfare of people giving them a stronger motivation to change their way of living in a way that further supports the goals of having energy independence and cleaner power. Another policy that energy advisors should formulate would stipulate that the government should speed up the progress of wind power since it fails to produce greenhouse gases that cause global warming, as well as preventing forces imposed by technological feasibility, economics and some public opposition to having turbines in their neighborhood.
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