WIND NEEDS WIRES & PICKENS IS GONE

Pickens Shelves Texas Wind Project
Keith Johnson, January 14, 2010 (Wall Street Journal)

"T. Boone Pickens, the oilman and clean-energy booster, shelved his massive wind-power project in Texas even as he stepped up his push to increase the use of natural gas for transportation.

"Cheap natural gas, the lack of electricity-transmission lines and the lingering credit crunch have combined to take the shine off large-scale renewable-energy projects, and those factors led Mr. Pickens to halve his $2 billion wind-turbine order with General Electric Co…"

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"…[I]n May 2008 [Pickens] announced plans for the biggest wind farm in the U.S., by amount of installed megawatts, to be located in the Texas panhandle. But [now he is cutting] his order with GE to 333 turbines from 667 machines and [will] use them for wind farms in Canada and Minnesota…That means the Pampa Wind Farm slated for north Texas—and postponed last summer until at least 2013—won't happen under current conditions."

"…Natural-gas prices have fallen sharply since the summer of 2008, when Mr. Pickens announced the big wind farm and the Pickens Plan, which calls for using natural gas to power big rigs, buses and other large vehicles to lessen U.S. dependence on foreign oil…Cheaper natural gas hurts wind farms, because cheaper gas makes gas-fired power plants a more attractive option for electricity generation...The effects of the credit crunch and the economic slowdown also slowed growth in the wider U.S. wind-power industry in 2009, after a record year for wind-power installations in 2008."

The short-term fate of New Energy could be in these price fluctuations. (click to enlarge)

"But less expensive natural gas, due to a boom in U.S. production over the last two years, has given new impetus to Mr. Pickens's transport plans. Mr. Pickens announced…a new national television ad calling on America to "wake up" to the cost of importing oil. He also called on Congress to pass pending legislation that would offer new incentives for greater use of natural gas in the heavy-duty transport fleet."

[T. Boone Pickens:] "It's off the table…If Texas makes more investments in transmission lines to carry power from the remote wind farm to towns and cities…we'll be back… You can't finance wind farms very well when natural gas is under $6 per million British thermal units…"