Big Oil to Big Wind

April 19, LEGENDARY Texas oil man T. Boone Pickens has gone green with a plan to spend $10.7 billion to build the world's biggest wind farm -- but he expects to turn a buck.The southern octogenarian's plans are as big as Texas, where he lives on a ranch with his horses, and entail reworking how Americans use energy.

Next month, Pickens's company, Mesa Power, will begin buying land and ordering 2700 wind turbines that will eventually generate 4000MW of electricity. This is the equivalent of building two commercial-scale nuclear power 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 more than $4.27 billion under management, and earned about $1.07 billion in 2006 betting on commodity and equity markets.

Though a long-time oil man, Pickens said he had embraced the call for cleaner energy sources that do not emit heat-trapping greenhouse gases.

"I'm an environmentalist -- I can pass the saliva test," he said.

But Pickens is not out to save the planet -- he intends to profit.

Though Pickens admitted that wind power would not be as lucrative as oil deals, he still expected the Texas project to turn at least a 25 per cent return.

"When I go into these markets, I expect to make money on them," Pickens said.

The US is facing a looming power crunch, with electricity demand to grow 15 per cent in a decade. And while many states 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 records above $122.80 a barrel mean a bright future for renewable sources such as wind and solar.

Pickens's 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's energy strategy, imagine a compass.

Stretching from north to south from Saskatchewan, in Canada, 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 and cities such as Los Angeles.

Original Source: Reuters via The Australian