The Wind Cries 'Bailout!'
Texas oilman T. Boone Pickens launched a media blitz this week to
announce his plan for us "to escape the grip of foreign oil." Now he’s
got himself stuck between a crock and a wind farm.
Announced via TV commercials, media interviews, a July 9 Wall Street Journal op-ed and a Web site,
Pickens wants to substitute wind power for the natural gas used to
produce about 22 percent of our electricity and then to substitute
natural gas for the conventional gasoline used to power vehicles.
Pickens claims this plan can be accomplished within 10 years, reduce
our dependence on foreign oil, reduce the cost of transportation,
create thousands of jobs, reduce our carbon footprint and "build a
bridge to the future, giving us time to develop new technologies."
It sounds great and gets even better, according to Pickens. Don’t
sweat the cost, he says, "It will be accomplished solely through
private investment with no new consumer or corporate taxes or
government regulation." What’s not to like?
First, it’s worth noting Pickens’ claim made in the op-ed that his
plan requires no new government regulation. Two sentences later,
however, he calls on Congress to "mandate'' wind power and its
subsidies. Next, Pickens relies on a 2008 Department of Energy study
claiming the U.S. could generate 20 percent of its electricity from
wind by 2030.
Setting aside the fact that the report was produced in consultation
with the wind industry, the 20-by-2030 goal is quite fanciful.
Even if wind technology significantly improves, electrical
transmission systems (how electricity gets from the power source to
you) are greatly expanded and environmental obstacles (such as
environmentalists who protest wind turbines as eyesores and
bird-killing machines) can be overcome, the viability of wind power
depends on where, when and how strong the wind blows — none of which is
Wind farm-siting depends on the long-term forecasting of wind
patterns, but climate is always changing. When it comes to wind power,
it is not simply "build it and the wind will come." Even the momentary
loss of wind can be a problem. As Reuters reported on Feb. 27, "Loss of
wind causes Texas power grid emergency."
The electric grid operator was forced to curtail 1,100 megawatts of
power to customers within 10 minutes. Wind isn’t a standalone power
source. It needs a Plan B for when the wind "just don’t blow."
This contrasts with coal- or gas-fired electrical power, which can
be produced on demand and as needed. A great benefit of modern
technology is that it liberates us from Mother Nature’s harsh whims.
Pickens wants to re-enslave us with 12th century technology.
Then there’s the cost of the 20-by-2030 goal — $43 billion more than
the cost of non-wind assets, according to the DOE — and this doesn’t
include many billions of dollars more for additional transmission
lines. Could the 20-by-2030 goal even be accomplished?
According to Electric Utility Week on June 9, a DOE official
informed attendees at a June wind industry meeting that reaching the
goal would entail replicating the entire existing U.S. wind system
(about 17,000 megawatts of capacity constructed over the past decade)
every year starting in 2018.
What about Pickens’ plan to shift us into natural gas vehicles?
Well, they cost a lot more: an extra $3,000 to $6,000 for cars and
$30,000 to $40,000 for buses and trucks. There are only about 1,300
natural gas refueling stations in the U.S., as compared with about
180,000 conventional gas stations — that’s a lot of infrastructure to
build and finance. Will Pickens’ plan reduce our dependence on foreign
Even if the fleet of natural gas-powered vehicles is enlarged, the
bulk of existing and new vehicles will continue to depend for the
foreseeable future on gasoline. Americans own about 260 million
vehicles, a total that grows by more than 3 million vehicles every year.
Turnover is low as about 60 percent are owned for more than seven
years. Besides, as demand for natural gas increases, so will prices. In
the Washington, D.C., area, natural gas is already about two-thirds as
costly as gasoline — and that’s with hardly any demand.
None of these facts and circumstances are new to Pickens. So what’s up with him?
Not only does Pickens’ firm, BP capital, have significant
investments in natural gas, but last June he announced plans to build
the world’s largest wind farm in west Texas, capable of producing 4,000
megawatts of electricity.
The federal government subsidizes wind farm operators with a tax
credit worth 1.9 cents per kilowatt hour — potentially making for a
tidy annual taxpayer gift to Pickens based on his anticipated capacity.
But all is not well in Wind Subsidy-land.
Since Congress didn’t renew the wind subsidy as part of the 2007
energy bill, it will expire at the end of this year unless
reauthorized. Subsidies are perhaps more important to the wind industry
than wind itself. Without them, wind can’t compete against fossil
As pointed out by the Atlanta Journal-Constitution on July 9, "In
1999, 2001 and 2003, when Congress temporarily killed the credits, the
number of new turbines dropped dramatically."
It’s little wonder that Pickens is waging a $58 million PR campaign
to promote his plan. If it works, his short-term gain will be saving
the tax credit and his wind farm investment.
In the long-term, he stands to line his already overflowing pockets
with hard-earned taxpayer dollars. What will the rest of us get from
this T. Boone-doggle? That’s anybody’s guess, but it probably won’t be
cheaper energy, energy independence or a cleaner environment.