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February 25, 2008

If T. Boone Pickens Buys It, There Must Be Profits in Green Energy


In liberal circles, the name T. Boone Pickens is synonymous with treachery and dishonest politics. After all, Pickens backed the Swiftboat campaign that is believed to have put George W. Bush in the White House for a second term. Could it be that, by pursuing profits, Pickens might also incidentally rehabilitate his image with some on the Left?


Pickens might be an old Texas oilman, but today he’s also a big proponent of clean energy. Specifically, he told the New York Times for an article last week, he gets the same feeling about wind power that he used to about big oil finds.


Today, Pickens owns the biggest wind farm in Texas, which itself is the biggest wind energy producing state in the nation (it quietly surpassed California a couple of years ago), and helped push the United States into the number two spot for wind energy production worldwide.


Opponents of clean energy – and specifically wind – point to a couple of things as holding it back. It’s still more expensive and less efficient than burning fossil fuels, and it’s not profitable. The presence of oil tycoons like Pickens in the game suggests that the second one is no longer correct. That, in turn, means that the power of the market is likely to get behind powering the nation with green energy.


That could be coupled with the growing belief that global oil production has hit its peak.


“Global oil (production) is 84 million barrels (a day),” Pickens told the 11th National Clean Cities conference in 2005. “I don’t believe you can get it any more than 84 million barrels. I don’t care what (Saudi crown prince) Abdullah, (Vladimir) Putin or anybody else says about oil reserves or production.”


Wind energy in Texas is part of a statewide success that wasn’t just built on the geographic luck of having a lot of wind, but also on a clear renewable portfolio standard, which is a fancy way of describing the state’s goals of generating clean energy. But that was just part of the state’s program to develop clean energy.


That has helped to make it profitable, and has attracted investors. By 2020, some estimates say that green energy in Texas will create 30,000 jobs and will mean more than $9 million in capital investment.


Environmentalists might not like the idea of being on the same side of an argument as someone like T. Boone Pickens. On the other hand, his endorsement does bring a kind of business gravitas that should convince those skeptical about the underlying economics of green energy. The fact that he’s making money at it, and sees no downward slope, as there is in oil, should convince everyone else.


That doesn’t mean all is necessarily well and good for the future of green energy. As with everything else, there are real needs in terms of infrastructure in order to best expand the industry. Evidence that the nation’s electrical grid is grossly out-of-date came courtesy of the massive 2005 blackout that darkened a good chunk of the northeastern United States. In some places, it’s more expensive to lay the cable necessary to carry the electricity than it is to build the windmills to generate it.


Also, there are questions about the ability of America’s manufacturing sector to handle increased demand. There is currently a backlog of orders for parts and components.


That must be weighed in relation to the question of how much energy can be produced by wind. Environmental groups say 20 percent, but energy consultants peg the figure at less than 10 percent.


That final figure might depend on how much the nation is willing to invest up front in terms of infrastructure. But when you’ve got evidence that there’s money to be made doing so, the odds are at least better that the investment will be made.


© 2008 North Star Writers Group. May not be republished without permission.


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