T. Boone Pickens has made a bet and wants taxpayers to bail him out.
From the Grauniad,
Legendary oilman T. Boone Pickens thinks the days of oil under $100 a barrel may be gone.
His answer is
wind of course.
T. Boone Pickens, our favorite Texas-oil-baron-turned-wind-wildcatter, has placed an order for 667 wind turbines from GE for a total cost of $2 billion. The turbines will have a generating capacity of 1,000 megawatts, enough to power 300,000 homes. The order was made through Pickens’ Mesa Power for his Pampa Wind Project in the Texas Panhandle, which he aims to turn into the world’s largest wind farm, generating some 4,000 megawatts of power as early as 2014.
Problem is there are no transmission lines. Thousands of miles of expensive transmission lines would have to be built from west Texas and the Panhandle to Houston and Dallas. No problem, taxpayers and consumers will pay $60 billion (they say) to hook up Boone's turbines to the grid (
PDF file).
The scenario presented consists of approximately 19,000 miles of new 765 kV transmission lines. This mileage includes existing 765 kV project proposals, such as ETT’s CREZ project in the ERCOT region and others in MISO and PJM. The rough cost of this plan is estimated to be $60 billion in 2007 dollars. This figure assumes a $2.6 million per mile 765 kV line cost, as well as an additional 20% for station integration, DC connections, and other related costs. These costs are ballpark estimates created without the benefit of detailed engineering and should be considered as such.
Which gets back to the Grauniad story. With oil and gas plunging, the plans for his taxpayer-subsidized investment won't be economically feasible. The $2 billion he shelled out for wind turbines will be wasted. Do you want to know why the "days of oil under $100 a barrel may be gone"? Because
Boone has taken a shellacking over his failed bets and like the Russians and Saudis he is desperate to keep the bubble inflated.
The commodity half of oil tycoon T. Boone Pickens's BP Capital hedge fund lost 35 percent of its value in July, the New York Post said, citing sources.
The fund is believed to be down about 10 percent for the year, the paper said.
A Pickens spokeswoman told the paper that commodity-fund investors were informed that the steep decline in natural gas and oil prices has had an adverse impact on its performance.
Casey is firmly in the Pickens camp. Peak oil is here, we're running out of it, pee on the Dollar. Is there any better contrarian indicator than Casey?
6 comments:
Two thoughts:
1) If wind is such a damn fine idea, let's have Congress exempt all such projects from environmental impact review. Hell, let's give the windmill builders the right of eminent domain so they can build everywhere. From Martha's Vineyard to ANWR.
2) If we were really to check into this, what are the odds that all the lobbying money for this is coming from GE? On this one project alone they stand to take $2B in sales? It's kind of like digital TV. No one asked for a new technology, but think of all the jobs you generate getting there.
He's trying to do the same thing with water. He owns more water than anyone else in America and he wants to sell it to Dallas (even though they have an ample supply of water already)... the problem is, the water is in the Texas panhandle where few people live. Businessweek had a good story about how Pickens is trying to use eminent domain to guarantee transmission rights for his alternative energy power lines and water pipelines. Basically the guy has the Texas legislature wrapped around his finger.
Last year he had an IPO for a natural gas company; I read that it totally bombed. Old Pickens must be getting pretty desperate to juice his hedge fund's rate of return. I'm a big supporter of capitalism but Pickens is the type of guy that corrupts the system and gives it a black eye.
I did however find it interesting how quickly the left changed their views on him. Very interesting.
In the best of old Railroad Barrons traditions, Pickens has bought his legislators fair and square. Now, hand over that taxpayer money! Suuuuweee!
Paul
All those wind turbines (when operating) aren't even the equivalent of 2 nuclear plants.
Once you factor in the "gimmes" from state and local governments, wind isn't much cheaper either.
I'd rather develop the PolyWell Home-ColdFusion Power Unit, and then mass-produce it, so normal people & cities & states could have all the electrical power they want, with NO CHANCE of pollution or nuke-weapon conversion...
and a massive freeing up of America from foreign oil sources!
Just one correction: TBP doesn't own the water, he owns the water RIGHTS. Nobody owns water until it is pumped out of the ground. And there is some regulation on how much can be pumped.
Other than that, I agree with Lou Minatti's comments.
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