I was pretty bummed out this morning after hearing that T. Boone Pickens would be cancelling his 4 GW wind farm project. Not so much because that beautiful 4 GW wind farm won't be built in Sweetwater, TX - but because this little piece of news is likely to serve as an excellent opportunity for renewable energy naysayers to leave a fresh trail of misinformation about the wind energy industry.
It's already plastered all over message boards and blogs.
Here are a few comments that I found on one particularly hostile message board. . .
"Why did anyone believe this wind farm would ever get built? Wind energy is a scam. It's just another reason for big government to make more money off the backs of taxpayers."
"T. Boone Pickens is only trying to make money. He realized that he couldn't make money from a stupid wind farm that nobody wants anyway, so he walked away. When are people in this country going to wake up and realize that coal is whats best for Americans. It's cheap and we have 500 years of it. Time to silence the crazy treehuggers that are bankrupting this country."
"LOL! What a joke. Drill Baby Drill!!!"
We know why these folks are spouting off. They simply have no problem furthering our reliance on fossil fuels (which in some respects, could be perceived as treasonous). Environmental concerns are laughable to them (because most have absolutely no idea that natural capital can no longer be liquidated without fiscal consequences) and quite a few still believe that they'll be labeled as liberals if they embrace renewable energy integration. I guess they didn't get the memo about how supporting the integration of renewable energy is probably one of the most patriotic things you can do.
Regardless, there seems to be a lot of speculation about why Pickens cancelled the 4 GW farm, and is now restructuring his wind energy plans. But it is likely that the main reason is transmission.
In 2011, 687 GE wind turbines are scheduled to be delivered. But the necessary transmission lines being built to move all that wind power won't be ready until 2013. Bottom line: He can't have $2 billion dollars worth of turbines sitting around for two years while transmission is still being built. Therefore, Pickens is looking to build three or four smaller wind farms elsewhere.
Truth is, this is not an issue with wind energy. It's an issue with infrastructure. And much of the necessary infrastructure upgrades are being planned and built right now.
You see, transmission doesn't go up like shopping malls. These are huge, capital-intensive projects. But don't let the fossil fools use this as an opportunity to further their campaigns of misinformation about renewable energy integration. These upgrades and new developments ARE happening, primarily because our current infrastructure is crumbling, and it's in desperate need of modernization. Of course, those billions (that's right, billions...with a "B") in stimulus funds are going to enable this massive undertaking too. These upgrades will not only help us move all that new renewable energy to the grid, but they'll also enable a more efficient utilization of all the power we generate - both renewable and non-renewable.
Of course, as a renewable energy advocate and investor, I'm primarily focused on renewables. And the fact is, across the nation, new transmission is being built in an effort to facilitate new wind energy projects. Sure, the recession has slowed development. But the recession has slowed development of coal, nuclear and oil projects too. Nothing has been spared. But when the smoke clears, it will primarily be renewable energy projects that get back on track the fastest.
Truth is, hardly anyone wants to touch a coal project these days, even if it is intended to be a mythical "clean coal" project. And while I believe it's possible that we will see some future nuclear development, issues with NIMBYism (Not In My Backyard), waste disposal and extremely high capital costs will make those projects a lot more difficult to get off the ground, compared to new wind farms, solar fields and geothermal power plants.
So yes, Mr. Pickens' announcement is a setback for the wind industry. But it won't stop the momentum that will continue to allow wind, as well as all other renewables to become a much larger part of our overall energy mix.
Jeff
Subscribe to
Further, look at the price of oil. When he started this campaign were fearing 150/barrel prices. We are now in the low 60s. The price of oil and natural gas will directly influence whether or not alternative energy projects will get off the ground. It is a simple ROI analysis for any individual in structured finance. What will be your cost of production and will others have a cheaper cost of production than you and in what time-frame will you become profitable.
These are enormous issues. It is not as easily to say that an individual who supports fossil fuel is committing Treason, which is simply fool-hardy dialogue.
One must look at the time-frame for the project. Two when will the investor be able to reap ROI. Three the tax incentives are marginalized now due to the fact that no one has high enough profits. True you can carry-forward 20 years and back one, but in times of uncertainty it is best not to hope for a time when there is higher oil prices, but to deal with the hear and now.
Sorry that is what went through board room and T. Boone's decision process. He is one of the Barbarians at the Gate and not anything else.
If enabling our continued reliance on something that generates profits for countries that sponsor terrorism and destroys our planet in the process isn't borderline treasonous, than I don't know what is.
If that is what you believe then look at the statutory laws on what is Treason. It is not treason. It may be your vision of what treason should be and if you can find enough people to call your Congressman/woman to get the laws changed then do so. It is within the right of every American. However, currently that is not the law.
I do agree that Alternative Energy is important. I never stated otherwise. What I am trying to impart is that this is a business. We are a capitalistic society. BP investments wanted a ROI that was feeseable and at the current time it is not within his time horizon. He is now pushing natural gas, which he has always done and because of the pricing it is low enough for him to make tons of profit.
No business is made simply for beneficial reasons, there needs to be a tangible ROI. If and when and there is always a when oil and natural gas rise, then wind energy and all alternative forms of energy will gain light again.
Further, look to the IPOs from Clean Tech if you were a PE or VC it has placed the worst returns for start-ups. However, when oil and natural gas returns to higher levels, then and only then will you be seeing T. Boone Pickens on the horn again boasting for a need for alternative energies.
Treason is defined in the United States Constitution, the only crime so defined. Article III Section 3 delineates treason as follows:
Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.
We are not giving aid to our enemies here because we are not purchasing oil outside of any agreement with that the laws of the US have enacted. If within the chain of commerce it so happens we receive oil from an enemy country, which seeks to outwardly over-throw the US the people in the chain must be part of the conspiracy and must knowingly do so to over-throw the US government and even that would be a weak arguement.
It is simply not Treason. Should we be more socially conscious of what our acts do to future generations? That is a truth that would be a great philosophical debate, but not criminal under any current law.
Sorry, but please read what is the definition of Treason in the US Constitution and further bring in case law to support your point of view. Otherwise, it is mere speculation on what we all wish for, but is not the current law of the land.
Natural Gas is local in nature. You would need to have tankers for liquified natural gas to be transported and that simply not done.
Natural Gas is not foreign sourced it is US, Canada and Mexico sourced. Our NAFTA partners, if from any foreign country.