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Power Businesses The Almighty Buck

Pickens Wind-Power Plan Comes To a Whimpering End 346

Posted by timothy
from the go-long-on-stocking-coal dept.
Spy Handler writes "In 2008, billionaire T. Boone Pickens unveiled his 'Pickens Plan' on national TV, which calls for America to end its dependence on foreign oil by increasing use of wind power and natural gas. Over the next two years, he spent $80 million on TV commercials and $2 billion on General Electric wind turbines. Unfortunately market forces were not favorable to Mr. Pickens, and in December 2010 he announced that he is getting out of the wind power business. What does he plan to do with his $2 billion worth of idle wind turbines? He is trying to sell them to Canada, because of Canadian law that mandates consumers to buy more renewable electricity regardless of cost."
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Pickens Wind-Power Plan Comes To a Whimpering End

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  • The real plan (Score:5, Interesting)

    by Anonymous Coward on Saturday December 25, 2010 @10:55AM (#34665358)

    Pickens real plan wasn't wind energy - it was water. He wanted the government to grant him free land for the power lines that would be required to get the power back to where it would be used (cities). The land he was trying to get was going to also be used for water transport pipelines, which is going to be a huge moneymaker in this century - particularly in the south and west. Pickens doesn't give a crap about wind energy, I'm glad he was defeated.

    • by couchslug (175151) on Saturday December 25, 2010 @11:07AM (#34665416)

      The emulation of the railroads in being granted huge rights-of-way would have been extremely lucrative and in the robber baron tradition.

      Such folk built vital infrastructure we would not otherwise have, but lack of water will be a useful constraint on growth.

      We don't need growth everywhere.

      • by Sulphur (1548251) on Saturday December 25, 2010 @12:41PM (#34665822)

        The emulation of the railroads in being granted huge rights-of-way would have been extremely lucrative and in the robber baron tradition.

        FWIW In Texas, oil drilling is regulated by the Railroad Comission.

        • by AK Marc (707885) on Saturday December 25, 2010 @02:45PM (#34666352)
          I always laughed at the claim that being governor of TX meant that Bush was qualified. That's the 4th most powerful elected position in the state. The first three are the Lieutenant Governor (gets to set the legislative agenda, anything he doesn't want passed doesn't get voted on, and there's no override of his veto), the Railroad Commissioner (in charge of oil and transport, including truck shipping, railroads, and all that), and the Comptroller (the state accountant, who can veto things without override by controlling the funding for them, and in charge of the lottery, among other things). The governor is a distant 4th.
    • by Attila Dimedici (1036002) on Saturday December 25, 2010 @11:58AM (#34665622)
      I didn't know about the water angle, but I knew he was counting on government funds to make his venture into wind energy profitable. He didn't invest in wind energy because he believed in wind energy, or because he thought it was a profitable venture. He invested in wind energy because he thought he could get the government to pick up the tab for the parts that make wind energy a money loser.
      • by misanthrope101 (253915) on Saturday December 25, 2010 @01:27PM (#34665998)
        To be fair, automobiles would be a money loser if government hadn't built roads and made the other subsidies necessary to make autos a tenable technology.
        • by Attila Dimedici (1036002) on Saturday December 25, 2010 @02:11PM (#34666198)
          That is not true. Automobile companies made money using the roads that existed before the automobile was first introduced. While government subsidies may make automobile manufacturing more profitable, automobile manufacturers were making a profit before the government started doling out any subsidies.
          I am not conceding that there really are that much in the way of government subsidies for automobiles, but even if there is, the government subsidies occurred after the economic success of the automobile. They did not create the economic success of the automobile.
    • by RobinEggs (1453925) on Saturday December 25, 2010 @01:06PM (#34665906)

      So if Pickens buys water and his water actually becomes critical at some point, eminent domain will work, for once, as it was intended: the government will take the damn water and the public will at least be dealing with a regulated monopoly. Politicians can be bought in the short term, but an entire starving (thirsting) populace tends to destabilize the best of plans.

  • by Kjella (173770) on Saturday December 25, 2010 @10:56AM (#34665360) Homepage

    Green/clean/renewable/buzzword power is a funny market, I've seen them try something similar here. Basically what happens is that the current pool of power is already a mix with some parts good and bad. All the special offers do is take part of it and charge a premium for it, while the normal power becomes "dirtier". The overall production mix remains the same, the people willing to pay feelgood money are too few to actually increase demand. That and the environmentalists usually are also opposed to the large windmill parks and whatnot disrupting the natural environment, so their demands usually contradict themselves. But then of course an oil crisis will hit, prices will skyrocket and politicians will be blamed for doing nothing. You're just not going to win this one.

    • by AmericanInKiev (453362) on Saturday December 25, 2010 @11:29AM (#34665504) Homepage

      So here it is: We can make clean oil alternatives from Algae, less clean from coal; but the cost is ~$70 a barrel. $70 is high, but we've been there before, and we can manage, we stop selling SUV and start buying Hybrids for example; but the economy doesn't crash etc. So when Oil gets to and stays > $70. alternatives will comes in.
      The fear is that it will spike; but this fear is largely unfounded, because in order for oil to be unaffordable in the US, it would also be unaffordable everywhere else - reducing demand etc... So the current path is research on oil alternatives at the $70 level. Not unreasonable - better would be high-speed trains.

  • by Anonymous Coward on Saturday December 25, 2010 @11:03AM (#34665380)

    I'm in Canada. There are several provincial efforts to specify a certain percentage of renewable power by a particular date (e.g., 25% of power from renewable sources by 2015), and/or the ability for customers to voluntarily pay more if they want to buy renewable power -- as in, pay an extra few percent on your power bill and the power company guarantees that all that money will be invested in renewable power production (e.g., wind turbines). The laws don't say "regardless of cost", and don't specify doing it by wind turbines. They usually say "achieve this benchmark for renewable power by this date". The power companies are free to achieve that goal however they want, including importing power from elsewhere (e.g., Nova Scotia recently made a deal for a new hydroelectric power project in Labrador). It *may* cost more money, or maybe not. Depending upon how high the price of oil or other fossil fuels go in the next few years, it might not actually be more expensive in the long run. Realistically, it probably will be in the short term, but I think of it as "achieve this renewable energy target the cheapest way the market can figure out", not "regardless of cost".

  • Pickens wants water (Score:4, Interesting)

    by NotAGoodNickname (1925512) on Saturday December 25, 2010 @11:05AM (#34665398)
    Pickens is a scumbag. He doesn't care about Wind Power, he wants water. He used the guise of wind-power to try to grab land to transport water. Don't believe me? Read this: http://earthfirst.com/%E2%80%9Cblue-gold%E2%80%9D-t-boone-pickens-and-the-privatization-of-water/ [earthfirst.com]
    • by Dachannien (617929) on Saturday December 25, 2010 @11:11AM (#34665430)

      I fail to see a problem here. Electricity is generally considered to be a necessary staple of living in the US, yet we pay people to generate and deliver it to us. Why should water, with appropriate regulation in place, not be privatized?

      • by superdude72 (322167) on Saturday December 25, 2010 @01:00PM (#34665886)

        Why should water, with appropriate regulation in place, not be privatized?

        A better question would be, what do ratepayers have to gain by allowing water to be sold to them by a regulated monopoly--with all the adminstrative overhead and bureaucracy that entails--rather than simply having the government own the water system outright?

      • by jmichaelg (148257) on Saturday December 25, 2010 @01:13PM (#34665938) Journal
        It appears Pickens was looking to secure water rights and water transportation rights in remote areas via eminent domain. He was able to do it because people believed he was developing the wind resource that is there.

        The problem is that he's developed a network that taps into the Ogallala Aquaifer. The Ogallala is an aquifer that's been over-tapped before Pickens arrived on the scene and with his newly acquired water rights, looks to be drained completely making Pickens richer than he already is and leaving the farmers who depend on the resource in the lurch.

        We had the same game play out in California in the early 1900s when Los Angeles was developed. LA raided the Owens Valley a few hundred miles away for water. The Owens Valley ceased to be a viable farming community as the water disappeared and boosters like the Chandlers of the LA Times got richer. A more recent example of the same money play is Las Vegas raiding huge portions of Nevada water so the Bellagio can lure tourists to Vegas.

        Just as the Owens Valley turned to dust so will large parts of the midwest turn to dust as the already over-used Ogallala disappears. So a few people will get very,very rich and a national asset will cease to exist.

        The Ogallala is an example of where government regulation is severely needed. It's a resource we should be using at a rate commensurate with its ability to recharge so that not only do we benefit from its existence so do our great grand children. Raiders like Pickens don't give a fuck about long term consequences as long as they make bank today.

    • by GiveBenADollar (1722738) on Saturday December 25, 2010 @11:54AM (#34665598)
      Ok he's a scumbag for trying to build a water pipeline and sell water. So, if there is no pipline and there is a drought the city can use water rationing and raise rates, but at least they won't be buying water from the evil man. Yup makes perfect sense to me.
      • by gtall (79522) on Saturday December 25, 2010 @12:11PM (#34665694)

        On the other hand, maybe it will force the cities to be more self-reliant when it comes to water. Currently, water is wasted and few cities want to recover waste water because of the 'yuck' factor; yet, the water from those recovery facilities is just as clean as from anywhere else. It's the cities' problem, let them solve it without sucking aquifers dry.

  • by JoshuaZ (1134087) on Saturday December 25, 2010 @11:06AM (#34665402) Homepage
    It wasn't just the price of wind that was an issue. From TFA:

    Pickens placed a $1.5 billion wind turbine order from GE. But the problem: transporting the energy from West Texas to the rest of the state. Pickens planned to build his own transmission, but the approvals fell through, says economist Mike Giberson at Texas Tech.

    This isn't an issue of relative energy cost. This is an issue of not being given permission to build the basic infrastructure he needed for his system to work.

  • by rudy_wayne (414635) on Saturday December 25, 2010 @11:10AM (#34665424)

    The failure of T. Boone Pickens has nothing to do with "market forces". It has to do with trying to solve the wrong problem. Or not even understanding what the problem is in the first place. Just because you're rich doesn't mean you know what you're talking about.

    I keep hearing the phrase "reduce our dependence on foreign oil" associated with things like wind turbines and nuclear power. Maybe somebody should do a little research and discover that 1% of the electricity in the U.S. is generated using oil as fuel. Unless you're planning on cars, trucks, buses and trains powered by wind turbines or nuclear reactors, how exactly does this "reduce our dependence on foreign oil"?

    • by Gibbs-Duhem (1058152) on Saturday December 25, 2010 @11:18AM (#34665462)

      That would be part II of his plan -- replace natural gas power generation capacity with wind, and use the saved natural gas to replace oil as a transportation fuel. 1 gallon of saved compressed natural gas is 1 gallon of fuel for a vehicle. It was fairly sane in that respect, I just don't think CNG stands a chance of taking off in the US. It's extremely hard to transition to a new transportation fuel due to the well modeled chicken/egg problems with fueling stations. And if we're going to try to transition to a new fuel, better to pick something more long term than CNG.

    • by wowbagger (69688) on Saturday December 25, 2010 @11:22AM (#34665476) Homepage Journal

      Pickens's idea was as follows:
      1) while 1% of our electricity is from oil, about 25% is from gas.
      2) Replace that 25% with wind.
      3) Take the gas freed up and use it to power vehicles.
      Result: Reduction of foreign oil.

      Now, the problems with that plan were:
      1) Wind is variable, and therefor cannot be used to replace base load generation, which is where much of the gas is used.
      2) Wind power needs land. The land that has good wind is NOT where people need power, so you need to build transmission lines to move the power where it is needed.
      3) BANANAs (Build Absolutely Nothing Anywhere Near Anything) will oppose both your wind farms and your transmission lines.

      The only real way this sort of idea would have worked would have been if every wind turbine also had enough local storage (e.g. vanadium redox batteries) to store power so that you could make the turbine act like base load power. Normal power company policy is to take the baseplate power (e.g. 2 MW peak) and divide by 10 for wind. So, if each wind generator had roughly 5MW-Hour of storage, you could then average over 2 days, and make each turbine "act like" a 200kW base load generator. Of course, redox batteries aren't cheap, and the total cost of land+turbine+battery+transmission lines+shutting the BANANAs up is >> the current costs to make electricity with coal or gas.

      • by DaMattster (977781) on Saturday December 25, 2010 @11:43AM (#34665552)

        Pickens's idea was as follows: 1) while 1% of our electricity is from oil, about 25% is from gas. 2) Replace that 25% with wind. 3) Take the gas freed up and use it to power vehicles. Result: Reduction of foreign oil.

        Now, the problems with that plan were:

        That is still flawed logic. Again, I am not expert but my guess is that you might free up enough oil to last two days at present U.S. consumption. With the rate at which automobiles increase on the road every year, any short term benefit realized is quickly negated.

    • by Confusador (1783468) on Saturday December 25, 2010 @11:30AM (#34665512)

      You are quite correct, but you're misunderstanding the error. People know that a significant portion of our electric generation is from natural gas (24%) [doe.gov], and they know that the majority of the world's reserves are in the Middle East [naturalgas.org]. What you need to correct them on is the reasonable (but false) assumption that what portion of our supply we import comes from there and not Canada [doe.gov].

    • by DaMattster (977781) on Saturday December 25, 2010 @11:37AM (#34665530)

      The failure of T. Boone Pickens has nothing to do with "market forces". It has to do with trying to solve the wrong problem. Or not even understanding what the problem is in the first place. Just because you're rich doesn't mean you know what you're talking about.

      I keep hearing the phrase "reduce our dependence on foreign oil" associated with things like wind turbines and nuclear power. Maybe somebody should do a little research and discover that 1% of the electricity in the U.S. is generated using oil as fuel. Unless you're planning on cars, trucks, buses and trains powered by wind turbines or nuclear reactors, how exactly does this "reduce our dependence on foreign oil"?

      Now that is the best argument I've heard thus far! T. Boone Pickens would have been better off investing in green energy for powering the transportation industry. Unfortunately, Americans seem to hold the wealthy on undeserved pedestals. Pickens conclusion was quite far off. Mod the parent up!

    • by Ash Vince (602485) * on Saturday December 25, 2010 @11:41AM (#34665544) Journal

      I keep hearing the phrase "reduce our dependence on foreign oil" associated with things like wind turbines and nuclear power. Maybe somebody should do a little research and discover that 1% of the electricity in the U.S. is generated using oil as fuel. Unless you're planning on cars, trucks, buses and trains powered by wind turbines or nuclear reactors, how exactly does this "reduce our dependence on foreign oil"?

      I think the idea is that people would buy electric cars and hence start putting far more load on the electricity grid instead of going to filling stations. It is a long way off but the idea of running your personal transportation device on stuff that explodes to provide momentum is doomed in the long run. Electric is the way to go as we already have a way of distributing it around the country so you can save on infrastructure:

      http://www.time.com/time/world/article/0,8599,1705518,00.html [time.com]

      Israel is far more serious about moving away from oil as the population has a better understanding of where the money they spend on oil goes: Some of it is donated to the likes of Hamas and it comes flying back to the Israel in the form of a rocket. Every one knows that some Saudi money is diverted to terrorism:

      http://www.usnews.com/usnews/news/articles/031215/15terror.htm [usnews.com]

      Most of the 9-11 bombers were from Saudi or had saudi ties: http://en.wikipedia.org/wiki/Hijackers_in_the_September_11_attacks [wikipedia.org]

      This is the best reason for getting away from our dependence on middle east oil, most of the countries that have large amounts of oil are distinctly Muslim and while their leaders might be friendly with our leaders the people in those countries often have more sympathy with the terrorists than the do with us decadent westerners.

    • by jonbryce (703250) on Saturday December 25, 2010 @01:35PM (#34666044) Homepage

      But quite a lot of oil is used for heating whereas in for example the UK, oil heating is pretty rare. The extra electricity could be used for heating which would displace oil in that sector.

  • by hsmith (818216) on Saturday December 25, 2010 @11:35AM (#34665526)
    You mean, heavy subsidization by the US Tax Payer? Those aren't market forces, it is stealing from the poor to give to the rich, to make them wealthier? I'll pass.
  • The conspiracy: (Score:2, Interesting)

    by Hartree (191324) on Saturday December 25, 2010 @11:58AM (#34665618)

    I was wondering how the crowd that claims wind and other renewables are more economical than anything else would spin this.

    It can't possibly be that he lost money, if it's so economical. So, it must have been something else, like a secret agenda that required him to lose money for a greater gain.

    A bit like the 200 mpg carburetor that the big corporations are keeping secret.

    But, obviously I must be part of the conspiracy, since I'm not out supporting the 200 mpg carbu... I mean wind farms, enthusiastically enough.

    Yeah, I'll get mod bombed for this, but big deal. I've got so many +5 informatives that I'm hardly worried. ;)

  • by Joe The Dragon (967727) on Saturday December 25, 2010 @12:01PM (#34665634)

    BUILD more nuke plants and then in 2040 fusion!

    Only put the satellite microwave ones in areas away from where people live.

  • by Doc Ruby (173196) on Saturday December 25, 2010 @12:38PM (#34665812) Homepage Journal

    Pickens was one of the top cowboys in getting us into this oil mess. Then he invested oil profits heavily in natural gas, which indeed did pay off: production has risen some [wikipedia.org] as consumption has risen slightly more [wikipedia.org], but prices have doubled [wikipedia.org], with frequent sevenfold spikes that last most of a year. Nice racket, but not good enough for a snakey oil salesman like Pickens.

    So Pickens started pitching his plan to move America's cars from gasoline to natgas, switching the natgas flow away from our gas turbines. New combined cycle gas turbines get up to 85% energy efficiency, because the plants can usefully consume the heat, but cars will just pump it out into the air - at about 20% energy efficiency (or worse: about 17% for gasoline cars converted to natgas). Which all means that we'd have to burn 4-5x as much natgas to get the use in cars we do now in CCGT plants. Which means buying 4-5x as much gas, from Pickens, just to burn 80% out in his backyard.

    He invested $2B in wind farms because he expected at least that much more profit from natgas. He's getting that profit anyway, without the wind farms. If he'd been serious about the wind farms, he'd have them up and running, producing power, instead of letting them depreciate and then selling them to a foreign country.

    Pickens has done all he could to get us into this energy crisis, and has no skills in getting us out of one. Indeed, if oil money weren't so easy once you're in the old boy club, that old boy wouldn't have made much anywhere that takes skills that actually serve and develop a market, rather than shooting fish in a barrel - Texas style, which means oil barrel.

  • by Animats (122034) on Saturday December 25, 2010 @03:17PM (#34666496) Homepage

    To understand wind power, look at the wind map of the United States [windpoweringamerica.gov]. Wind turbines aren't useful unless the average wind speed is in the 8 m/sec range and up. Note the huge high-wind area from the Texas panhandle up to Canada. That's where Pickens wanted to operate. Good place for wind turbines, but no nearby place that needs the power. So some long transmission lines were needed. The problem is not that "regulators" wouldn't let Pickens build transmission lines. It's that he wanted governments to pay for them. [wikipedia.org] See Pickens' testimony before Congress. [googleusercontent.com] He wanted eminent domain powers and tax credits for high-tension lines. Back in 2009, though, he couldn't raise the $2 billion needed to build them. [washingtonpost.com]

    Those wind charts come in much finer detail. Look at the California wind map. [windpoweringamerica.gov] There are four really good wind areas in California, and they all have large wind farms operating. There's room for further expansion out at Mojave, but the other three sites are essentially full. Those are all successful operations, because they're reasonably near big loads.

    Also, the Pickens claim that collecting wind power over a large area would provide significant base load capacity may be bogus. See the live data for the PJM grid [pjm.com]. (This brings up a big Flash application showing what the power grid for the Northeastern US is doing. Switch one of the panels to "Wind Power" and set the scale to "All Data".) Within a 3-day period, total wind power for the entire Northeast US can range over an 8 to 1 range. That's from real, operating wind farms.

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