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Major investor pulls out of wind power
This photo taken on October 29, 2010 shows a man running past wind turbines in the early morning mist in the Ngong hills, some 25 kms south-west of Nairobi, which are owned and run by Kenya's main power generating company KENGEN. The majority of Kenyans are unwilling to abandon their traditional energy sources in favour of cleaner or renewable ones unless their incomes rise significantly, a study has found.
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Kai Ryssdal: The White House is sticking up for American wind power. Today the Obama administration made a formal complaint to the World Trade Organization. It says China is illegally subsidizing its wind companies. That may or may not be true.
There will be claims and counter-claims and an investigation. But either way, foreign competition is only one challenge that American wind power companies have to deal with. This week their unofficial spokesman, billionaire oil man T. Boone Pickens, stuck his finger in the air and took wind power out of his plan for America.
From the Marketplace Sustainability Desk, Scott Tong reports.
Scott Tong: T. Boone Pickens once planned to build the largest wind farm on earth. Here's a commercial from his website:
T. Boone Pickens in commercial: We have the best wind corridor in the world. We're going to revitalize rural America with this.
Two years ago, 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.
Mike Giberson: That sort of torpedoed his transmission line project, which meant that he didn't have a good way to develop and sell that power.
Hello GE? Cancel those turbines. And delete wind power from Pickens public plan for America's future. Now the other half of his plan -- homegrown natural gas -- is the only part. Here's the new commercial:
Pickens in commercial: We're gonna figure out how to use it. If we don't, I promise you, we will go down as the absolute dumbest crowd that ever came on the street.
Thanks to new drilling technology, natural gas is abundant and cheap. Which makes things tough for everything else: coal, solar, wind. Financial consultant Ray Perryman.
Ray Perryman: Relative prices do matter. And there are times when things work in a market and times when they don't. Right now natural gas prices are lower, and when you have to make it work for investors every quarter, that creates some issues.
But in the energy business, the issues -- as in volatility -- never go away. Perryman's seen oil at $8 and at $108. With natural gas, there are no guarantees either.
In Washington, I'm Scott Tong for Marketplace.
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@Jim Lanier
"...we would NEVER do that!!! Hee, Hee, Hee,
It is time for wind power to stand on its own two, or more, feet and eleminate the subsidies our government is putting into these projects. If it can stand own its own then its time hasn't come."
Nope, not us. We would only subsidize Big Oil...as we have for decades, and continue to do. I have to assume from your statements against subsidies that you believe that we should stop subsidies to ultra-rich oil companies too...and see if *they* could stand own their own feet as well?
We certainly should go after China for subsidizing their wind power projects because we would NEVER do that!!! Hee, Hee, Hee,
It is time for wind power to stand on its own two, or more, feet and eleminate the subsidies our government is putting into these projects. If it can stand own its own then its time hasn't come. What we have already spent is still OK but let's not continue to spread this subsidy.
Any pump and dump involved here? I don't follow Pickens, but it seems very possible to get ahead of a trend, sell high when others are jumping on board and think the trend is long term (and maybe even use investor money to grow a bit), and then pull out [potentially to get on a related horse]
Well coning yourself with other peoples money is pretty embarrassing to begin with. The only reason the feds use the wind scam is to shift those appropriations elsewhere or in the form of a bribe in what the Chinese call, you owe us Joe. Either way its the best scam the Democrats have.
Ok. So you all think u know the answers. How many of u have done any real research? Or all u all just regurgitating what u have heard from others. Read the book Climate Gate. It is real, relevant, and will answer many questions regarding GREEN power and the like.
The title of this article is mis-leading. it should be "Major SPECULATOR pulls out of wind power." He simply was not into it for the long term for which it is an investment into. You dont pull out after a few years and call it a loss, unless you are motivated by sheer profit in the short term, instead of investing in the long term future.
Sure natural gas is cheap. Why? Because our nemesis Hugo Chavez is sitting on top of the worlds largest reserves ( source: report by the former head of the world petroleum council, writing about the truth of reserves and the game of maximizing profit in it ). so, If Hugo Chaves wants you to think that Natural gas is cheap, long enough for us to be lulled into thinking that our infrastructure needs investment to be converted to use it vs wind power, We sink money into that infrastructure, ( pipelines, tanks, furnaces, CNG cars and industry, ) what happens when the price of the natural gas quadruples over time? Profit$ for Chavez. early profits for those with knowledge of the industry to know this and be ahead of the game. Im willing to bet money, that this is T Boone Pickens real plan, and he will be back in wind power in 10~15 years.
Most of the information here is correct, its just a slightly different twist on what a major player in the market is thinking, planning and doing.
http://cleantechnica.com/2008/08/02/t-boone-pickens-out-for-water-not-wind/
it was not really wind which floated his boat, but water. it shouldn't be okay for this public resource to be owned this way.
I admire the bet that Mr. Pickens made. I think that there were some much more powerful forces at work against him in the end regarding the wind power transmission lines. The future of natural gas is a good short term solution, but without long term infrastructure that can deliver the energy of tomorrow, we are doomed to repeat the cycle of today.
In case you handn't noticed, our political leaders in Washington have, for the past 40 years, thought that they have the wisdom to make the economy perform better than if they stayed out of the way. It's called central planning.
Washington's central planners have been trying for four decades to pick winning energy technologies and to force those into the market place with tax breaks, subsidies, and mandates.
In some cases, such as with wind, the tax breaks and subsidies have been enormous. They are so enormous that people like Boone Pickens and corporations like GE have concluded that pursuing Washington-created tax breaks and subsidies is far more profitable and with less risk than investing in innovative and productive private sector activities.
As a result, the economy suffers because far to many of the nation's creative people and once creative companies (like GE)are focused on "milking" Washgingto -- which is exactly what Boone Pickens intended to do. Fortunately, a combination of inadequate electric transmission capacity and market forces (plentiful, low cost natural gas) made Mr. Picken's original "milking" plans unrealistic.
As a result, taxpayers and electric customers have been saved from bearing the cost of Mr. Pickens' original plan. Unfortunately, there are still others out there playing the wind energy "tax break & subsidy game" rather than doing productive things; e.g., GE, NextEra, Duke Power, Exelon, Iberdrola,Invenergy,etc. etc.
Perhaps someday, our political leaders will either (a) recognize their limitations, and/or (b) run out of our money and patience and stop messing up an economy that would work lots better if they would stop tinkering.
"Thanks to new drilling technology, natural gas is abundant and cheap." I think this statement is misleading because, at least for shale gas, it ignores the potential for significant costs to the public to clean up water supplies contaminated by chemicals used to extract shale gas.
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