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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.
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
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
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