Pickens' Pullout Underscores the Need for Renewable Electricity Standard
After T. Boone Pickens' stunning decision to shelve his ambitious plan to build the world's largest wind farm in the Texas panhandle, does anyone still think converting from fossil fuels to renewable energy will be easy? One year ago, Pickens was the toast of the green movement. The Texas oil man, foe of Al Gore, identified a common cause that both climate changers or doubters could get behind: energy security.
The stated goal of the "Pickens Plan" was to reduce America's dependence on foreign oil by one-third over a ten-year period. To achieve this goal, Pickens would replace natural gas now used to generate electricity with wind power and then use the saved natural gas to power vehicles that presently run on gasoline. His $60 million ad campaign draped the American flag around his Plan: "at current oil prices, we will send $700 billion out of this country this year alone - that's four times the annual cost of the Iraq war." He described adoption of his Plan almost as an act of patriotism. Why send all that money to our enemies in the Middle East when right here in the US we have a massive untapped resource - a wind corridor stretching from North Dakota all the way through Texas?
So what went wrong in the space of a year? Pickens' company's spokesman cited "the collapse of the capital markets" and "the steep downturn of natural gas prices" as the primary reasons. Pickens himself cited a lack of transmission lines. A drop in oil prices and decreased demand for energy also likely played into Pickens' decision to abandon the wind farm.
This development is particularly troubling when one considers the federal resources being thrown at renewable energy. The Stimulus Package passed in February 2009 includes: $2.5 billion in grant money to be doled out by the Department of Energy; $3.1 billion for State energy programs; $6 billion in "rapid deployment" loan guarantees for both renewable energy power generation and electric transmission projects; and most importantly a 30 percent investment tax credit for renewable energy projects and renewal of the production tax credit.
What more could you ask for? The answer is a national renewable electricity standard. Government incentives are nice, but precipitous drops in oil and natural gas prices has sidelined the already scarce investors. A renewable electricity standard - such as the provision in the House-passed American Clean Energy and Security Act - would force utilities to buy renewable energy. Only a guaranteed market for renewable energy will coax investors off the fence.
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