Posts Tagged ‘Pampa Wind Project’

NEW YORK – T. Boone Pickens dropped by Fortune’s offices last Thursday, and not surprisingly the billionaire oilman had oil on his mind as gas prices hit yet another new high.

“The only way you’re going to kill demand is with price increases,” Pickens, 80, told a group of editors and writers. “But demand is not as easy to kill as you think.”

The legendary Dallas wildcatter and corporate dealmaker believes the world is approaching “peak oil” – meaning we’ve pumped out more oil than remains in the ground – and he’s looking beyond the petroleum age by placing some big bets on wind. His $12 billion Pampa Wind Project in Texas will generate enough electricity to power some 1.3 million homes when completed in 2014. (Last week Pickens’ Mesa Power placed an order for 667 turbines with General Electric (GE) for the project’s $2 billion first phase.)

For Pickens, wind is key to weaning the U.S. from the petrol pump. “The only transportation fuel we have in the U.S. to replace oil is natural gas,” he said.

Here’s how it would work, according to Pickens. Replace the natural gas power plants that generate about a quarter of the electricity in the United States with wind farms. Use the freed-up natural gas to power cars, trucks and other vehicles. “We could reduce oil imports by 38 percent,” Pickens declared.

The U.S Department of Energy earlier this month released a report estimating that wind power could supply up to 20 percent of the nation’s electricity by 2030. Huge hurdles stand in the way of achieving that target, such as the need for a massive upgrade to the transmission system and the fact that the wind blows intermittently. And natural gas-powered cars won’t be as clean as, say, electric vehicles powered from solar.

Wind isn’t the only green energy source on Pickens’ horizon. I ask him about large-scale solar and he pulls out a map illustrating the best spots for solar power plants in the U.S. “I like it,” he says. “We’re looking at all renewable energy.”

As he put it earlier in the conversation, “I’ve been too early on a lot of things, but now I have enough money to be as early as I want.”

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For some on the right coast, the current renewable energy craze seems like a rerun of that ’70s show, the province of California dreamers and pie-in-the-sky Silicon Valley techies. But increasingly it’s all about Big Business, a point driven home Thursday by a deal struck by two decidedly non-crunchy granola types: billionaire oilman T. Boone Pickens and General Electric chief Jeffrey Immelt.

Pickens’ Mesa Power placed an order for 667 GE (GE) wind turbines for the first phase of a massive 4,000-megawatt, 400,000-acre West Texas wind farm called the Pampa Wind Project. When completed in 2014, Pampa is expected to produce enough clean green energy to light up 1.3 million homes, according to Mesa. Each of those 667 turbines alone can generate 1.5 megawatts of electricity. The first phase of the project will cost $2 billion, with a good chunk of the cash going to GE.

That a legendary wildcatter like Pickens sees big money to be made from renewable energy in an oil state like Texas is just another sign that green is not a fad but the future. “You find an oilfield, it peaks and starts declining, and you’ve got to find another one to replace it,” Pickens said in a statement. “It can drive you crazy. With wind, there’s no decline curve.” (Just how much money Pickens will make off wind will depend on whether Congress extends a production tax credit that makes such projects viable.)

When it comes to energy, Texas is literally its own country, as the Lone Star State is not plugged into the national power grid and must generate nearly all its electricity within its borders. Aggressive efforts by Texas regulators and entrepreneurs to make the state energy independent by upgrading its transmission system and tapping wind power are models for the rest of the country.

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