By Andy Mannix
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By Olivia LaVecchia
By CP Staff
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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 half-hearted victory. The bill includes tax credits, grants, and loan guarantee programs, but it's not enough to push Pickens's wind farm project over the hump.
The problem, says Tyler Tringus, 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's 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.
To solve the 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. To stick a pipeline underground cutting across the state, however, Pickens needed some help from the Texas Legislature.
As it 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 rule, 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 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 a water district to transmit alternative energy using the same route as its pipeline. 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 Smith, director of Public Citizen Texas, 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 Texas Public Utility Commission 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's 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 to tap into them.
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?
In the Panhandle, turbines can produce electricity effectively roughly half of the time, and Energy Secretary Steven Chu said in late February that there is not yet a serviceable way to store wind energy for later use. At the moment, most wind farms are backed up by natural-gas power.
Thank goodness Pickens is in the natural-gas business, too.
One month after his visit to Rice University, Pickens is back in Houston again, this time at the Harris County transportation hub. He's dressed in the same black suit, white shirt, and orange Oklahoma State University necktie that have become his unofficial uniform when speaking in public.
After the presentation, a journalist in his 20s approaches him. Pickens asks the young man if he's a member of his army. The reporter, sounding nervous, stammers before saying that he thinks joining would be a conflict of interest. With a smile on his face, Pickens snaps back, asking if being pro-America is also a conflict of interest. The reporter turns red with embarrassment.
While Pickens was clearly joking, critics argue that this is Pickens's modus operandi: inspiring fear, making personal attacks, and wielding patriotism like a cudgel.
The Wall Street Journal reported an incident in which Pickens was having breakfast with former Kansas Gov. Bill Graves, who now heads the American Trucking Association. Graves was telling Pickens his concerns about using natural gas in trucks when Pickens reportedly said, "Bill, I just want to warn you on this. I'm going to make you look unpatriotic for supporting foreign oil. I just want to make sure you understand that."
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