T. Boone Pickens is a hard ass Texas oilman and resource speculator. He is a billionaire who financed the Swift Boat Veterans for Truth campaign that helped defeat John Kerry in the 2004 presidential elections. Most recently, in order to profit off an impending water shortage, he contributed heavily to a Texas ballot measure that allowed him to have the eminent domain rights traditionally restricted to municipalities.
But he also recently announced that he plans to build 4000MW of wind turbines in Texas. This would be largest wind energy development in the world, enough to power 1.3 million homes.
Lord knows he isn’t doing it for charity: “First thing, it’s about money”, he says. He plans to make between a 15 and 25% return on his $10 billion dollar investment.
How did Pickens’ manage to snag such a profitable investment? With help from the Federal Production Tax Credit. The PTC–which give selected renewable energy producers 2 cents/kwh–was first implemented in 1992 as part of the Energy Policy Act. Although Congress has occasionally allowed it to expire, the PTC is responsible for significant increases in installed wind capacity in the US.
With his farm running at full capacity, Pickens will get $80,000 an hour in tax credits from the government. But there is a catch. Currently the PTC is set to expire at the end of 2008.
Interviewed recently, Pickens was reasonably confident that Congress would pass the PTC, but admitted that without it his project would be “a dead duck”. So far his odds don’t look good. On Wednesday, the PTC stalled in the Senate when proponents failed to win cloture on the Renewable Energy and Job Creation Act.
I blogged yesterday about how pissed off I am about the outcome on the REJCA. Reading about actual record-breaking wind deals that may not happen only adds insult to injury. Pickens probably expected it though. As he said, congresspeople are a “real conglomeration of fruitcakes. I mean pitiful people.”
But his statistics are interesting. 15 to 25% profit on wind projects is a great return. Even without a tax credit, this would be far from unprofitable. And the fact that a purely private operation could build 4000MW of wind in 10 years means that large-scale deployment in the near term is feasible.
And imagine what we could achieve if the federal government made a real commitment to wind deployment. Pickens observes the that the US could provide for most of the 150,000MW of growth in energy demand over the next 10 years with wind deployed in the Great Plains. If he can make a significant contribution to this goal, I may forgive him for the Kerry incident.
I know, right. If we can’t even get the PTC passed, imagine trying to actually pass a strong cap and trade bill. Good post.
We need renewables to be profitable, but it’s this kind of development model that spurs community resentment. The clean energy revolution needs to be affirmed by everyday people; it cannot be an imposition of one man’s vision of the landscape onto all of those affected by it.
Kai,
In many cases these top-down kind of developments may spur resentment. In this case I don’t think so because the turbines are being installed on large empty tracts of texas grassland.
The area is mostly used for cattle grazing(and will still be after the turbines are installed), and the land owners are being compensated by a percentage of the revenues generated by the turbines.
Please see this article for a picture of the area nearby where the turbines will be:
http://www.treehugger.com/files/2007/06/t_boone_pickens.php
In general, I do agree with you that consensus-based investment in renewables is preferable to Pickens’ model. The trouble is that most renewable investments affirmed by everyday people are of insignificant scale to make a dent in the energy load.
-Chris
This summer, I’ve been studying the aesthetic impacts of wind turbines and the lack of democratic influence in the process. Whether or not the project is on “empty grasslands” or land generally regarded as pristine, the lack of citizen influence in the process is disconcerting. Community wind is certainly fantastic, but as you mention, the scale is limited; up until this point 100MW or so. That said, I do think that citizen affirmation is at least significant enough to play an important part in any development model, whether community or not.
On July 8th, this clown was interviewed by NPR, in which he said that the energy problem “is a failure of leadership.” And who spent millions to install that leadership? Who still lies about what he did? Who is a lying cheat, refusing to admit he lost the bet on the legitimacy of the Swift Boat campaign ads? Who may have installed our Junior president for his own financial gain by bringing about America’s energy crisis?
Jesus, are we blind, or what? Can’t we take a page from the Republicans of Congress past, and pass a bill that cancels the PTC for all American corporations whose Board Chairmen’s initials are TBP and make more than $10 million dollars per year? Christ, this scum-sucker makes my skin crawl.
[...] – i.e., one third of total current US capacity – in its first phase of expansion. In other words, T. Boone Pickens has nothing on Chinese entrepreneurs (does [...]