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Big Oil to Big Wind: Texas Veteran Sets Up $10 Billion Clean Energy Project
By Ed Pilkington
The Guardian UK
Monday 14 April 2008
Dallas -
T Boone Pickens is famous for thinking big. He founded his Texan oil company,
Mesa Petroleum, in 1956 with just $2,500 (£1,200) in the bank. After a
string of audacious takeovers he turned it into an independent empire that challenged
the big oil companies, and today he is worth $3bn.
Now this straight-talking Southerner is launching the biggest and most audacious
project of his career. This month he will make the first down payment on 500
wind turbines at a cost of $2m each. The order is the first material step towards
his goal of building the world's largest wind farm.
Over the next four years he intends to erect 2,700 turbines across 200,000
acres of the Texan panhandle. The scheme is five times bigger than the world's
current record-holding wind farm and when finished will supply 4,000 megawatts
of electricity - enough to power about one million homes.
It's not just the breathtaking scale of the scheme that is striking, though
at a total cost of $10bn it impresses even Pickens himself: "It's pretty
mind boggling," he says. The fact that Pickens, a tycoon who made his fortune
in oil, has turned his attention to wind power is an indication of how the tectonic
plates are moving. Until recently wind was seen as marginal and alternative;
now it is being eyed by Wall Street.
"Don't get the idea that I've turned green," Pickens tells the Guardian
in the Dallas offices of his new venture Mesa Power. "My business is making
money, and I think this is going to make a lot of money."
His fascination with wind developed as Pickens engaged in his favourite leisure
pursuit - quail hunting. For years he has been shooting Bobwhite quail on his
68,000-acre ranch in the panhandle. "I've been hunting quail for 50 years,
I know where the wind is," Pickens says.
The idea formed that this area of Texas, with its wide-open space, low population
and steady south-westerlies would make a perfect location for wind-generated
energy. Studies proved him right - there was more wind than even he had imagined,
much of it at peak times in the middle of the day when power sells at a premium.
So he set about convincing neighbouring ranchers to join his scheme, promising
them between $10,000 and $20,000 in annual royalties for every turbine they
allowed on their land. They have all signed up, eager to cash in on this literal
windfall. (Pickens, by contrast, refuses to have any of the turbines placed
on his own ranch. "They are ugly!" he says, unashamedly.)
To see exactly what the promise is to ranchers and rural communities of the
new dash for wind, you have to drive four hours west of Dallas into the Texan
prairies. Until a couple of years ago Sweetwater was a gently declining railroad
town, its population falling year on year and its infrastructure quietly rotting.
Now it is a boom town, a 21st-century equivalent of the Wild West. German wind
technicians who have poured into the area have coined a name for it - the Wind
West.
The three largest wind farms in America are all situated in the surrounding
area, Nolan county, which, with a population of just 18,000, now produces more
wind power than the UK, France and California.
While other towns in the region are struggling with plummeting house prices
and job losses, Sweetwater is in the midst of a construction explosion. Two
new companies opened this week, one servicing the blades of the county's 2,000
turbines, another renting out cranes used in erecting new turbines. The turbines,
state of the art models 400 feet to the tip of their blades, span out for 150
miles in any direction.
New roads and houses are going up, and local schools and medical centres have
been renovated using the influx of tax revenues from the energy companies. Greg
Wortham, Sweetwater's mayor, says he has watched over the past two years as
wind power was transformed "from a hobby - a green thing - into an industry.
Suddenly it was all about welders and engineers and truckers. We have companies
here begging for new workers and paying them more than the thousands being laid
off by the car companies."
Back in Dallas, Pickens believes there are several reasons to invest in this
new energy source. Beyond the mere profit motive, which clearly excites him,
there is the fact that Texan oil has been on the wane since it peaked at 10m
barrels a day in 1973, and is already down to half that amount. "Oil fields
have a declining curve - you find one, it peaks and starts downhill, you've
got to find another one to replace it. It drives you crazy! With wind, there's
no decline."
There is also a political edge to his obsession. Politics and Pickens go together,
as is obvious from the walls of his offices, lined with photographs of him with
world leaders. One shows him with the Queen, Prince Philip and George HW Bush;
another is with Margaret Thatcher and Ronald Reagan; a third shows him on board
Air Force One with the current President Bush. There is a signed calendar from
Arnold Schwarzenegger on the table.
As the pictures suggest, Pickens has for many years been a major financial
backer of both George Bushes, but he professes to be frustrated by the lack
of action on energy by this administration and all its predecessors. "George
Bush has done nothing. Nothing. Every guy that ran for president clear back
to Nixon said he would make us energy independent, but not one goddamned thing
has been done. Zero. The biggest problem facing the United States in the next
50 years is energy and nobody has come up with a solution."
Pickens, being Pickens, has come up with a solution - and it makes his own
gargantuan plans for a wind farm in the panhandle look tiny. For the benefit
of the Guardian, he draws on a white board his master scheme. He carves out
an enormous corridor of land running north to south through the middle of the
US - along the great plains - where he would build an army of wind farms. Then
he draws an equally enormous corridor running east to west from Texas to southern
California which he would similarly dedicate to solar energy.
"You need a giant plan for America. Not the pissant 83 megawatt [windfarm]
deals being stamped all over the country. There needs to be a huge plan from
someone with leadership. It's going to take years to do, but it has to start
now." Only then, he explains, can the US stop what he regards as the madness
of a flood of money flowing out of America to the oil producers of the Middle
East. "That money is going God knows where - a few friends, a lot of enemies.
We've got to stop it."
T Boone Pickens certainly is thinking big. And all this as he prepares to celebrate
his 80th birthday next month. How is it that he appears to be expanding his
ambitions at a stage in life when most people are retrenching theirs? "You're
getting older so you are running out of time," he says. "So let's
go! We haven't got long, and we've got to get this job finished."
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