Oil man backs wind, 'I expect to make money on them'

Townsville Bulletin
Saturday 19/4/2008 Page: 82

LEGENDARY Texas oil man T. Boone Pickens has gone green with a plan to spend $US10 billion ($A10.7 billion) to build the world's biggest wind farm. But he's not doing it out of generosity - he expects to turn a buck. The Southern octogenarian's plans are as big as the Texas prairie, where he lives on a ranch with his horses, and entail fundamentally reworking how Americans use energy. Next month, Pickens' company, Mesa Power, will begin buying land and ordering 2,700 wind turbines that will eventually generate 4,000 megawatts of electricity.

This is the equivalent of building two commercial scale nuclear energy plants and enough power for about 1 million homes. "These are substantial," said Pickens, speaking to students at Georgetown University yesterday. "They're big." Pickens knows a thing or two about big. He heads the BP Capital hedge fund with over $US4 billion ($A4.27 billion) under management, and earned about $US1 billion ($A1.07 billion) in 2006 making big bets on commodity and equity markets. Though a long-time oil man, Pickens said he has embraced the call for cleaner energy sources that don't emit heat trapping greenhouse gases. "I'm an environmentalist - I can pass the saliva test," he said.

But Pickens intends to make money. Though Pickens admits that wind power won't be the cash cow oil has been, he still expects the huge Texas project to give him at least a 25 per cent return. "When I go into these markets, I expect to make money on them," Pickens said. "I don't expect to lose." While many states in the US have rejected big coal-fired power projects on environmental concerns, they are offering a bounty of incentives to build renewable sources.

US crude futures at new records above $US115 ($A122.80) a barrel means a bright future for renewable sources like wind and solar. Pickens' wind farm is part of his wider vision for replacing natural gas for power generation with wind and solar, and using the natural gas instead to power vehicles. To picture Pickens' energy strategy, imagine a compass. Stretching from north to south from Saskatchewan to Texas would be thousands of wind turbines, which could take advantage of some of the best US wind production conditions.

On the east-west axis from Texas to California would be large arrays of solar generation, which could send electricity into growing Southern California cities like Los Angeles. The end result would be to free up more clean-burning natural gas - primarily a power generation fuel now - to power automobiles. Major oil companies have embraced so-called natural gas liquids because they have spent billions of dollars building refineries and pipelines to turn crude oil into petrol, Pickens said. But shifting natural gas used in power generation to transportation needs could cut US crude oil imports by nearly 40 per cent, he said.