By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
From 2007 to 2008, wind energy production in this country increased by 45 percent and provided more than 1.5 percent of the nation's energy needs, still a far cry from the 20 percent that the Department of Energy claims can be accomplished by 2030.
The advantages of wind power are numerous, and virtually everyone, from the power companies to environmentalists and politicians, agrees that it will be a significant part of the nation's energy solution in the 21st century. Or as Pickens might say, it's clean and it's American, so we better use it.
But how to make those windmills blow?
With private financing hard to come by, Pickens has looked to the federal government, most recently in the form of the stimulus bill. When it passed into law, Pickens declared a halfhearted victory. The bill includes tax credits, grants and loan guarantee programs, but it's not enough to push Pickens' wind farm project over the hump.
The problem, says Tyler Tringas, a wind-energy analyst for New Finance Energy outside Washington, D.C., is that wind farms are capital intensive and require tremendous sums of money up front. Most of the tax credits are applied on the back end, to energy that is already being produced, so if the wind farm doesn't make money, or even get off the ground, the tax credits are useless.
Financing is not the only obstacle in Pickens' path. Once his turbines, stranded way off in the Panhandle, start producing power, he still needs to transmit the electricity to where people actually live.
In order to solve this transmission problem, Pickens originally planned to spend billions stringing up his own power lines. To do that, he needed the power of eminent domain.
Years earlier, Pickens had begun buying water rights in the Panhandle. In fact, Pickens is reportedly the largest individual water rights holder in the United States. He planned on building a pipeline to the Dallas-Fort Worth area and selling those cities his water. In order to stick a pipeline underground cutting across the state, however, Pickens needed some help from the Texas Legislature.
As has been reported by BusinessWeek and other media, state lawmakers passed a bill in 2007 that made it easier to create a water district. Under the old rules, the five required directors of a water district had to both own the land and live on it. But after the change was voted in, the directors no longer needed to live on the land. Pickens then promptly sold eight acres of his Mesa Vista ranch to his ranch manager, his ranch manager's wife and three other employees who lived in Dallas and Houston, who then formed the Roberts County Fresh Water Conservation District No 1. Presto! Pickens now had the authority to condemn land under the power of eminent domain and to sell bonds.
But Pickens wasn't finished. Next, through aggressive lobbying, his lawyers in Austin were able to get an amendment tacked onto a large water bill allowing water districts to transmit alternative energy using the same routes as their pipelines. And with that, Pickens finally had the ability to claim the land he needed to build his transmission lines.
"I don't think creating a water district with the vote of employees is a fair way to use the process," says Tom "Smitty" Smith, director of the Texas office of Public Citizen, an environmental advocacy group in Austin. "It's a huge abuse of the process."
Pickens has been unable to sell his water to any municipality and has put his water plans on indefinite hold. As for building his own transmission lines, that idea died along with the economy.
As luck would have it, however, the state of Texas was there once again to save the day.
In June, the Public Utility Commission of Texas approved a $4.9 billion transmission plan that will run more than 2,000 miles of power lines with a capacity to carry 18,456 megawatts from the Panhandle to Texas' major cities. The project, says the commission, will cost Texas ratepayers an additional $4 a month. The new lines should be in service by 2013, and Pickens is excited about tapping into them.
Nationally, the shortage of transmission lines has been getting a lot of attention lately and is seen as one of the biggest hurdles to reaching the goal of generating 20 percent of the nation's power with wind.
Pickens and others believe the best way to build a large enough national energy grid is to do what President Dwight Eisenhower did with the national highway system—have the federal government pay for it. The stimulus bill calls for more than $4 billion to modernize the electricity grid, but estimates of how much it will cost to build enough transmission lines to hit the 20 percent mark start at $60 billion and quickly increase.
Up to this point, Pickens has not run into environmentalist bird-lovers trying to stop his wind farm, as has been the case along the Gulf Coast and in New England, but there is another fundamental hitch in the plan: The wind doesn't always blow. What then?
According to West Texas A&M University, wind farms on average operate at peak capacity only about 30 percent of the time, and in the Panhandle, turbines can produce electricity effectively roughly half of the time.