How Volkswagen is shaping Oklahoma's energy future
 

   When President Obama rolled into the White House for the first time, I was in the midst of an aggressive campaign to address the stranglehold placed on U.S. national security and our economy by addiction to OPEC oil. The crux of that plan was to expand renewables (wind and solar) in power generation, and replace dirtier-burning and more expensive OPEC oil with our abundant supplies of cleaner-burning domestic natural gas in the transportation sector.

   Washington lawmakers refused to foot the bill. Now, in an ironic twist, the Germans will finance it for us. And we're fools if we don't take advantage of this opportunity.

   Here's the background, and my suggested path forward.

   In 2015, the German automaker Volkswagen was found to have installed software on its diesel-powered vehicles that provided false emissions data, data that was far lower than the emissions their vehicles were actually producing.

   Since getting caught, the company has agreed to pay fines of $16 billion to settle claims for cheating. These will be paid to the U.S. government, and shared among the states. Oklahoma is set to get $19 million. In addition, owners of VW vehicles and the dealers who sold them will share in the proceeds.

   This flap once again underscores the need to get diesel vehicles off the road when and where we can, both for air quality purposes and OPEC oil dependence purposes. One of the most toxic emissions produced by diesel engines is nitrogen oxide (NOx). It's generated by all internal combustion engines, but according to an EPA study, on-road and off-road diesel-powered engines account for 29 percent of all NOx emissions in the study area.

   State regulators ultimately tasked with spending the VW settlement should have some guiding criteria.

   First, a majority of the funds should be used for vehicles that already perform below current federal NOx limits. A new natural gas engine developed by Cummins-Westport produced 90 percent less NOx emissions than new diesel-powered trucks. That engine is available today.

   Second, all vehicles performing below federal NOx limits should be treated equally. Oklahoma should look to decrease the number of diesel-powered vehicles on the road and replace them with trucks powered by natural gas.

   Why not go right to batteries? Because batteries will not move an 18-wheeler and cost at least five times more compared with diesel-powered trucks. So while electric cars are all the rage, batteries aren't a substitute fuel source for over-the-road trucks.

   Finally, while there will be justifiable efforts to use these funds on state fleets, it is even more important to find ways to allow private-sector fleets access to these funds. In fact, that's where the bulk of the money should go.

   Keeping in mind this settlement money is coming from a corporation and not the taxpayers, there will be no shortage of ideas from state regulators on how to spend these funds. Oklahoma should show leadership by not using it solely to upgrade state fleet vehicles.

   The reason is simple: If Oklahoma uses these funds to replace aging fleets, this will be a “one-and-done” deal. On the other hand, if the money is used to provide incentives for the public and private sectors to purchase natural gas-powered vehicles, the positive effects on reducing NOx emissions will be magnified many times over the years.

 

By T. Boone Pickens, Chairman and CEO of BP Capital, a hedge fund that trades in energy equities and commodities.

NewsOK.com

February 4, 2017