The Public Choice Economics of T. Boone Pickens
Nick Gillespie | August 7, 2008, 9:09am
Via blogger, writer, and critic extraordinaire Alan Vanneman comes this bit from Washington Monthly's Kevin Drum on T. Boone Pickens and the Texas bazillionaire's newfound enthusiasm for wind power (not to be confused with Psi Power, the vastly more interesting ability, at least according to the environmentally unconscious band Hawkwind, to "read your mind like a magazine"):
Pickens wants to build his electricity transmission facilities on a strip of land 250 feet wide and 250 miles long that starts at his farm in Roberts County, Texas, and terminates in Dallas. Why that particular strip? Because Pickens has been buying up massive water rights from the Ogallala Aquifer and he wants to pipe that water to Dallas at huge profit. Unfortunately, pipeline right-of-way is pretty hard to acquire, so Pickens figured out a way to get some help: he formed a little water district headed by his wife and a friend and then convinced the Texas legislature that water plus wind electricity was a good reason to use its power of eminent domain to hand over the land to him for a song. Wind power wasn't really the motivation for this land snatch, it was just a sweetener for a water deal.
Clever—and typically Texan, no? Still, why not just sell the electricity? Why the natural gas switcheroo [part of Pickens' plan is to fuel cars with natural gas after making conventional gas stations friendly to the new energy]? Turns out Pickens has a vested interest there too:
Along with being the country's biggest wind power developer, Pickens owns Clean Energy Fuels Corp., a natural gas fueling station company that is the sole backer of the stealthy Proposition 10 on California's November ballot.
Prop. 10 would kick $5 billion in public money toward incentives to switch toward alternative fuels for trucks and automobilies, the likely biggest winner being natural gas.
More here.
As reason's Ron Bailey has pointed out, Pickens has rarely met a subsidy he didn't like, as long as he was on the gettin' end.
The larger lesson? Always check ostensibly environmentally friendly plans for hidden agendas, regardless of who is pushing the plan, whether it's Al Gore or T. Boone Pickens or Jack London, for that matter.
mediageek | August 7, 2008, 12:22pm | #
If all of these wonderful cheap sources of energy really exist, then people will start using them.
I never said they were cheap. They aren't, yet. Nor have I made any claims about them being perfect. Regardless, solar PV systems are projected to reach grid parity within a few years.
First, what proportion? They still need to be on the grid.
In the case of most of these systems, yes, they do. But that only results in cost savings since you don't need a bank of batteries to run your household off of.
My parents, who are in the midst of planning their retirement home, have some friends who discovered that it was cheaper to install an off-grid Solar PV system than to run the wire to plug into the electric grid, so, as I said, it can and is being done.
Second, it is in the moutains where solar works better than other places.
First off, I was referring to the small-scale wind turbines I've seen. But I have no idea why solar would work better in the mountains vs. not mountains. Plainly, if you live in a state like Colorado which has 300+ days of sunshine a year solar will make more sense than if you live in, say, Washington State.
Lastly, there is a big difference between rich people playing around gadgets on the edges and actually replacing hydrocarbons and nuclear.
I would hardly describe most of the people undertaking these things as being rich. Most of them are comfortably middle class or upper-middle class, at least judging by the appearance of their homes.
Nor did I ever claim these things are a replacement for coal or nuclear. You might try scrolling upthread and reading my first post about wind generated electricity after you remove those Team Red Tinted shades of yours.
I'm all for coal-fired power plants and nuclear energy. In fact, if I could find an Alternative Energy mutual fund that invested in solar, wind, tidal, nuclear, and related technologies, I do believe I would cream myself.
Electric companies operate for profit. If there were a cheap way to use solar to replace hydro carbons they would be doing it on a mass scale, not just in your back yard.
Again with the straw man argument.
Dan | August 7, 2008, 6:28pm | #
Wind power is great - where it's cost effective. To be cost effective, you need to be in a location that is A) reasonably close to the people who will consume it, and B) gets a constant wind over about 8 mph. Super high winds don't help - most turbines are designed to generate peak power between 10 and 15 mph of wind, and if the wind is higher they just don't do any more than that. And if the wind goes below 10, the power starts to drop off dramatically and costs skyrocket because a wind turbine costs the same to buy and operate regardless of whether you are operating at 80% efficiency or 20% effciency. If your average is 5 mph, wind power is very expensive.
T-Boone's map of the midwest makes it look like the whole area could be filled with wind turbines. It just isn't so. If you drill into the DOE's maps of wind resource availability, you'll see that even the best states for wind power only have high wind zones in relatively few places - and most of those places already have wind power stations under construction.
Wind power can work - here in Alberta we're producing about 7000 MW of wind power. But then we have an excellent region of high wind in Southern Alberta due to a natural venturi effect coming from the mountains. The wind power is cost-effective, too.
You don't have to have batteries to make it work, because you can use other power sources as a buffer. For example, you can have a natural gas plant scaling up and down as wind comes online and offline. If there's no wind, all your power comes from traditional sources. As the wind picks up, the traditional sources throttle back and burn less fuel and wind takes over some of the load. There are technical glitches, and issues regarding the efficiency of running other plants at less than optimum power levels, but they can be managed.
Wind can be cost effective, but if you add up all the areas of excellent wind, you find that you can't really supply more than maybe 10-20% of our power from wind, and that would require enormous investment and major changes to the infrastructure. More reasonably, we might be able to get 5-10% of our power from wind, in areas that have good wind resources.
Dan | August 7, 2008, 6:40pm | #
Something that needs to be reiterated:
If you want to save the planet from fossil fuels you will not do it by opting for a cleaner, but more expensive energy source. Because if you choose to do that, you will simply take your demand for oil away from the oil markets, which will lower the price and stimulate demand for it elsewhere.
This is the cold logic of a global, fungible resource. So long as it is cheaper to make energy with oil, oil will be used. Unless you can get the entire world to voluntarily stop using oil, all you can do is change the distribution of who burns it. Cut U.S. consumption in half, and consumption in China and India will increase until a new equilibrium is reached.
Either way, every drop of oil in the ground is coming out of the ground and being burned, until it's no longer in anyone's economic interest to do so. Any 'energy policy' or 'green policy' that doesn't take this hard fact into account is worse than useless - it's counter-productive. It's counter-productive because it shifts the dirtiest energy source away from the people who at least use it as cleanly as possible and increases the use of it by people who don't give a rat's ass about pollution.
If you learn to accept this simple fact, the only possible answer is staring you in the face - you have to come up with a source of energy that is cheaper than oil. Nothing else matters. Conserving it doesn't matter. Putting carbon taxes on it at home doesn't matter.
Now, other energy sources can become cheaper than oil in two ways - one is to work to improve the energy sources so the price comes down. The other is to wait until oil becomes scarcer and prices itself out of the market. Or do both. That's where the future is.
In the meantime, any restrictions on output you put on your own country will simply hurt the local economy, which will inhibit the ability to invest in the research to lower the price of other energy sources.
And by the way, the market is doing just fine in this regard. Energy sources that weren't viable when oil was $14/bbl are viable now, and being implemented in quite large scale. Wind and Geothermal today. Solar will be there in a few years. Work hard to lower the cost on those - every time you lower the price of alternative energy, you drop lower the point where its cost intersects that of oil. The lower you make that intersection, the more oil will stay in the ground unburned because no one wants to pay to burn it.
