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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 More

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.

    • 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.

      • 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.

        • Re: (Score:3)

          by AK Marc ( 707885 )
          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
    • 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.
      • 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.
        • 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. The

    • 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.

  • 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 lar

    • 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 - redu

  • What Canadian law is that? (Score:5, Informative)

    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".

    • So, your province has to have 25% of its power from renewables by a certain date. But the end consumer doesn't have to actually spend money to buy that more expensive power, meaning demand does not equal required supply. I think I see a logical problem here...

  • 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]

    • 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?

      • 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?

      • 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 leav

    • 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.

      • Re: (Score:2)

        by gtall ( 79522 )

        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.

  • He didn't pull out just for market concerns (Score:5, Informative)

    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.

    • Anyone seen any reports on what approvals those were and on what grounds were they denied? Two minutes on Google didn't come up with anything useful.

      • Part of the issue was that he also wanted to move water on the same throughfares, believing that water was going to be a bigger commodity than electricity. He needed both to make it uberprofitable, he ended up getting none.

        While I question his motives in much of this, I do think that he is right in that we should be investing money in electrical infrastructure and wind power. Once more electric cars hit the market, we are going to hit a wall that will raise rates astronomically, and of course, make gasoli

        • I can see how moving water might make it more complex approval process, as that probably requires permissions from different regulators, but hopefully that wasn't the reason the project was denied permissions. I mean, if you're building infrastructure, doesn't it make sense to build as much of it as you can on the same area of land?

          • It wasn't the moving water that was complex.

            It was the fact he wanted water rights, aka, to pump water from the ground. From dry areas. That are already at the very fringe of not having enough water. And he wanted to take that water and sell it to the cities, the exact same cities that are currently fighting with water rights over the same areas.

            The regulators, quite sanely, said 'Uh, no'.

          • Re:He didn't pull out just for market concerns (Score:5, Informative)

            by AK Marc ( 707885 ) on Saturday December 25, 2010 @05:06PM (#34666914)
            The effect was that he was offered electric rights only, and he refused. He wouldn't build the electric lines to give people cheap renewable energy unless they gave him unrelated rights-of-way. From here, he attempted extortion and paid millions in ads to convince people that it was the government blocking his altruistic goal of cheap renewable energy for everyone.

            Refusing extortion seems like a good idea. Even if the power would have been nice, giving away billions in subsidies to a billionaire extortionist doesn't sound like a good thing for the people.

        • The stimulus package included many billions of dollars specifically marked for upgrading the grid. While this may seem like no big deal, I'm told that it's one of the biggest single investments in the grid (especially R&D) in decades. And there would have been more except that the funds had to be spent immediately and thus many non-shovel-ready projects were left out. We could do a lot more with a second stimulus package. Unfortunately, as your post illustrates, people are so misinformed about the pack

    • That is a real shame - plain and simple. I might have hoped a less distracted President might have made green energy more of a priority.

    • Re: (Score:2)

      by Hartree ( 191324 )

      Right of ways and land use permissions are part of the process of quantifying how well something works economically. Such things are used regularly in arguing against some forms of mining/energy production. Yet, here it's not taken as being relevant to the economics of the venture.

      Nice to be able to pick and choose. This is sorta like loading the whole defense budget of the US on nuclear or oil as a subsidy when arguing against them.

  • Solving the wrong problem (Score:3)

    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"?

    • 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

      • I am no expert but I wonder if the majority air/water pollution is coming from automobiles, trucks, and buses. It would stand to reason that by cleaning up these pollutants first, we would have a greater impact that looking at electricity generation alone. Again, an example of a misguided, politically driven idea.

      • I would think there's lots of replacements for CNG. Methane? You have to spend energy compressing it but you can get it for free from shit.

      • Compressing NG isn't that big of a deal, Our public transit buses run on CNG and they compress their own at the bus park; and it's not much more complicated to dual fuel personal vehicles. Farmers often supplement their diesel fuel in equipment with propane to get more horsepower out of it for heavy work. CNG handles about the same as propane and there are plenty of propane refillers, most rural areas heat with propane so there is a lot more infrastructure and experience than you'd imagine.

    • 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 po

      • 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.

    • 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].

    • 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!

    • 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 s

      • Re: (Score:2)

        by gtall ( 79522 )

        "decadent westerners"??? Hmm...child brides? Women with no rights? Persecution of non-Muslim minorities? No concept of human (as opposed to religious) rights? Support for some Muslim sects killing other Muslim sects, 'cause, you know, Allah wills it? And you are calling Westerners decadent?

    • 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.

  • 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 )

    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 e

    • He was denied approval to build any of the electric transmission lines needed to transport power from these wind farms to cities but do go on with that old troll.

  • BUILD more nuke plants and then in 2040 fusion!

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

  • Con Man Deserves to Starve (Score:3)

    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.

  • Wind power vs. Pickens (Score:4, Informative)

    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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