Devoted to understanding the basics and fundamentals of investing

If you have been watching the news at all today you have probably already hard of Boone Pickens and his new plan to help our country become less dependent on foreign oil. The Texas oil tycoon is making all the rounds trying to get the word out about his new website PickensPlan.com. Earlier today Pickens was on Squawk Box touting his plan, and also had a major article in today's USA Today.

The basics of the plan are that Boone Pickens believes America should utilize wind power as a major source of our electric power generation. He believes that more than 20% of our country's electric power usage could be wind generated within the next few years. Pickens is putting his money where his mouth is and building the world's largest wind farm in Texas.

So how does the wind power help our situation with gasoline prices? Pickens believes that natural gas is the cleanest form of transportation fuel available today. The problem is, our country doesn't use natural gas for transportation becaue it is being used for electric generation. Pickens believes that since these natural gas resources are cheaper (less than $1 gallon right now in some places) and are available in the United States we should use these for fuel transportation. By using our country's natural gas resources we could dramatically reduce our need for foreign oil, which in turn should drive down the price of oil substantially.

What might be the caveats of this plan? I think relying on natural gas so heavily would likely cause the prices of natural gas to rise rather rapidly. Wind power is a great idea, but as to this point it is fairly unproven so its risky to rely too much on it as a major source of electric power.

Overall, what should we make of Pickens Plan? It certainly isn't the final solution, and Pickens himself admits that. The truth of the matter is though that it would be a definite step in the right direction. Wind farms are expensive to build, but they are one time costs, rather than the constant billions of dollars we send to the countries overseas for oil.

Familiarize yourself with the details of Pickens Plan here.

What do you think of these ideas? Do you think these ideas are a significant step or are they bound to be a bust?

If you enjoyed this post please signup for the RSS Feed from GrowYourFunds.