Two Tales Of Texas Tell Different Stories About Big Oil

February 17, 2010
Roush Ford F-150 LP Natural Gas truck

Roush Ford F-150 LP Natural Gas truck

We all know that oil is a limited resource. We also know that America is hugely dependent on the stuff, and that much of it comes from foreign sources, which puts the U.S. in some awkward positions, politically, economically, and strategically. Most of us also know that emissions from gas-powered vehicles contribute heavily to air pollution, which, no matter how you look at it, is hardly a good thing.

As a result, America and many other countries are looking toward a future powered by alternate forms of energy. But as two stories from Texas illustrate, weaning ourselves off oil is going to be a painful process -- one that may often pit state against country, neighbor against neighbor.

First up: the state of Texas has filed a lawsuit in federal court to block a set of restrictions recently imposed on tailpipe emissions by the Environmental Protection Agency. As you might recall, the EPA has ruled that greenhouse gases pose a threat to human health, and as a result, the agency is now obligated to regulate them, as per the Clean Air Act. Since vehicles account for 23% of America's total greenhouse gases, the EPA has opted to tighten restrictions on tailpipe emissions, beginning in calendar year 2012. The EPA is also imposing include higher standards for fuel economy.

Lawyers for the state attack the EPA's assumptions about global warming, arguing that the agency's findings are based on "scientific errors and fraud". Texas governor Rick Perry drops the science argument and focuses on economics, insisting that the EPA's "misguided plan paints a big target on the backs of Texas energy producers and the nearly 200,000 Texans they employ." By that logic, fuel efficiency of any sort is bad for Texas, since it diminishes the consumption of oil/gas by drivers. (FYI, California is also opposing the EPA regulations, but for somewhat different reasons.)

In the other story, Texas billionaire T. Boone Pickens spoke yesterday to attendees at the National Automobile Dealers Association convention in Orlando, Florida, preaching the importance of ditching big oil and moving vehicles to natural gas. According to Pickens -- who drives a natural gas-powered Honda Civic -- the price of oil could jump from its current price of $77 per barrel to $300 or $400 within ten years, which would spell disaster for America and the auto industry. That's why, as we reported last June, Pickens is pushing a bill in the U.S. Congress offering a $65,000 tax credit for the purchase of vehicles that run on natural gas.

As you've probably already noticed, there are numerous flaws in the arguments of both Texas and Pickens....

T. Boone Pickens with President Barack Obama

T. Boone Pickens with President Barack Obama

For its part, Texas comes off a little like cigarette manufacturers who insisted for decades that their products were totally fine and that a link between smoking and cancer had never been proven -- a position that ultimately cost the tobacco industry billions upon billions of dollars in fines. No matter where you fall in the climate debate, it's hard to argue that cars don't pollute the atmosphere or that pollution is a good thing. Environmental pollution of all sorts has been linked to a wide range of ills, including cancer, cardiovascular ailments, respiratory problems, and birth defects. True, the state's suit may be successful if its lawyers stick to their anti-global warming rhetoric. However, Texas seems to be delaying the inevitable.

Furthermore, Texas sits outside the auto industry proper. In fact, automakers support the EPA's standards. Without them, manufacturers face regulation by 50 different states, many of which have slightly varying stipulations. Establishing one set of rules by which automakers can develop their vehicles makes sense. So at this point, we're not entirely sure how Texas will argue that it has standing to sue. (Though to be fair, most of us aren't lawyers.)

Pickens argument fails in that he's pushing for natural gas, which, like oil is a non-renewable resource -- one that is expensive to recover, and one that would require a national infrastructure of filling stations to meet demand. He might be better off relaunching his wind farm campaign, which would provide electricity for battery electric vehicles. (True, those require infrastructure developments, too, but the electricity grid is already fairly advanced, compared to that of natural gas.)

Then of course, there's the question of Pickens' sincerity, since the guy made most of his fortune from oil. Who's to say he won't be preaching against natural gas five years down the line if it proves less profitable than he'd hoped? And that's not to mention the mysterious auto company that Pickens is helping to fund: V-Vehicle, which is set to focus on high-efficiency, combustion-engined vehicles -- not BEVs or those that run on natural gas.

In the end, however, the two stories do share some middle ground and point out a couple of important facts that are central to the ongoing energy debate:

(1) energy self-sufficiency is a good thing;

(2) mining our own country for reserves is politically, economically, and strategically important; and

(3) weaning ourselves off oil is going to be a long, slow process.

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