Opinion: Another View: Wind’s outlook remains strong
Developing natural gas and renewable energy are good for Iowa and the U.S.
T. BOONE PICKENS is chairman and chief executive of BP Capital, a hedge fund that trades in energy equities and commodities. He also is the architect of the Pickens Plan, an energy plan for America. You can follow him on Twitter at @BoonePickens.
In 2008, I launched the Pickens Plan to help get America off OPEC oil. Our reliance on Middle East oil has been the number one threat to our national security and economy.
Thanks to advances in the oil industry’s discovery and recovery technologies, the U.S. energy picture is much better today. Let’s take stock of where we are.
The golden goose then was natural gas and still is. In 2008, there were concerns that America’s supplies of natural gas were stretched thin, and there were serious doubts about the ability to meet industrial, power and home heating demands.
The Pickens Plan began with a call to increase alternative forms of energy generation — including wind, solar, hydro, and geothermal — to reduce the amount of natural gas that was needed. We could then move that natural gas into a fuel for heavy-duty trucks, thus reducing our need for OPEC oil.
In 2009, the “Potential Gas Committee” began to quantify the natural gas reserves that were recoverable from the huge shale deposits beneath North America. That report noted natural gas supplies had increased so dramatically that the price dropped from about $12.60 per thousand cubic feet (Mcf) to a low of $3.14 per Mcf, as markets understood the value of hydro-fracturing and horizontal-drilling techniques. At one point, natural gas prices even plummeted to about $2 per Mcf.
Natural gas is the cheapest energy source in America, a reality that has hindered aggressive development of renewable energy in Iowa and elsewhere. While the federal production tax credit has kept the alternative industry alive, thankfully, the same innovation and technology advances that have reshaped the domestic oil and natural gas landscape have also impacted the wind industry.
The U.S. Department of Energy now says wind is the second-cheapest American power resource, behind natural gas.
Wind energy is becoming economically feasible again. The Iowa Wind Energy Association calculates that nearly $10 billion has been invested in Iowa’s wind farms and manufacturing facilities. That figure might well double in the next three to five years.
The production tax credit has existed in various forms since 1992. The most recent extension expired at the end of 2013 and will probably not be considered as a stand-alone tax measure this year, though it is possible the production tax credit will be reinstated as part of a comprehensive tax overhaul.
Even without the tax incentives, wind is growing increasingly competitive as an energy source. More efficient turbines, better siting, the ability to tie into regional electric grids and other factors are all positive factors.
Oil and ethanol are not players in the generation of electricity. They are players in transportation.
Iowans have long understood that a coordinated effort is necessary to produce anything. Corn and beans don’t spontaneously grow. They take careful planning, fertilizer, proper equipment, and enough water to get a marketable crop.
Wind takes the same type of coordination. According to the Iowa Wind Energy Association, as of the end of 2012 Iowa had nearly 3,200 utility-scale wind turbines producing more than 5,133 megawatts of power — third in the nation. Those operations are providing between 6,000 and 7,000 jobs, ranging from maintenance of the wind turbines to roads to trucks to building and maintaining the lines.
But the most critical factor in wind energy is wind itself. As reporters covering the Iowa caucuses have known for decades, the wind starts on the eastern slope of the Rockies, and there is nothing in its way between there and Grand Avenue.
Iowa may not have natural gas reserves, but 75 percent of the state is suitable to generate energy from wind.
Developing natural gas for use in heavy-duty trucks and wind for electricity make a solid partnership, for Iowa and the rest of America.