Wind is Moving Mainstream with Oil Billionaire's Texas Project

Here’s how to tell when the concept of sustainability has reached the big time: a U.S. oil and natural gas billionaire decides to create a 400,000 acre wind farm in the Texas Panhandle.

Oilman T. Boone Pickens is investing $2 billion in the Pampas Wind Project, an amount that will purchase hundreds of wind turbines from General Electric and jumpstart a plan that will eventually cost $10 -- $12 billion and power 1.3 million homes. Such a massive project illustrates how this country isn't just embracing a more renewable future but recognizing the economic wisdom of doing so. As Pickens says:

It's clear that landowners and local officials understand the economic benefits that this renewable energy can bring not only to landowners who are involved with the project, but also in revitalizing an area that has struggled in recent years. -- The Huffington Post
Pickens’ vision is a huge boon for clean energy, which now has a powerful advocate for climate-friendly legislation:
"I believe that Congress will recognize that it is critical not only to this project, but to renewable energy in this country, that they enact a long-term extension of the Production Tax Credits," he said.

Tax credits of 2 cents per kilowatt hour are set to expire this December, said Christine Real de Azua, a spokeswoman for the American Wind Energy Association.

The credits expired in 1999, 2001 and 2003, Real de Azua said. Wind power installation dropped significantly in each year following expiration of the credits, according to the organization. -- The Huffington Post

A new report from the U.S. Department of Energy (DOE) highlights the need for progressive thinking when it comes to incentives like tax credits, too. 20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply presents a scenario in which the U.S. could produce 20% of its energy from wind by the year 2030. According to the accompanying website,
The modeling done for this report estimates that wind power installations with capacities of more than 300 gigawatts (GW) would be needed for the 20% wind in 2030 scenario. Increasing U.S. wind power to this level from today’s 11.6 GW level would require significant changes in transmission, manufacturing and markets. --
Investors like Pickens may get us to that 20% but probably not without climate legislation. In fact, renewable energy is being positioned as a huge market opportunity for businesses that get in on the ground floor. Government incentives like cap and trade will help:
Action on global warming is coming soon. Governors, mayors and CEOs are already making bold and binding commitments; the presumptive presidential candidates from both parties are strong supporters of new federal policy initiatives. Meanwhile, under the radar, smart entrepreneurs are inventing new technologies to cash in on the high-tech bonanza to come, offering clean, affordable energy without carbon emissions. -- Wall Street Journal
Texas farmers are already making money off land leases for turbines, and the state itself produces the most wind power in the country -- that's before Pickens' wind farm.

It's hard to ignore the growing clamor for government incentives for renewable energy, and here's another point in its favor. As climate scientist Joseph Romm explains in an excellent Salon article that cites the DOE's new wind report, climate legislation even has long-term benefits for conservation of resources like water:

The study notes that "few realize that electricity generation accounts for nearly half of all water withdrawals in the nation." By 2030, wind would be cutting water consumption by 450 billion gallons a year, of which 150 billion gallons a year would be saved in the arid Western states, where water is relatively scarce -- and poised to get even scarcer thanks to climate change. And on top of that, we get half a million jobs, of which nearly a third are high-wage workers directly employed in the industry.

How do we get there? The report does not discuss the necessary policies, but the answer is obvious. We mostly need a cap and trade system that results in a significant price for carbon. While waiting, we should extend the production tax credit for at least five years (until it is permanently sunsetted) to give the industry some consistency. At that point, a 20 percent (or higher) national renewable electricity standard for utilities would become the key policy support, at least until carbon was significantly more than, say, $50 a ton.

The Bush administration's views of such policies range from lack of interest to outright opposition. So this report does highlight the disconnect between the amazing, but achievable clean energy future and the simple and relatively inexpensive government policies the administration just can't stomach. --

With an oil tycoon investing in a wind farm, the big U.S. investors are starting to look towards renewable energy. Now we need the government incentives to match and to push the movement forward.

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  • Posted on May 26, 2008. Listed in:

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