A New Breeze Blows for Wind Energy - or Does It?

We all remember the raging gas prices of the not-quite-distant enough past. Is anything being done to keep those horrible four dollar a gallon nightmares from returning? Between the Oil Industry, the watchdog groups, and the general public, a seemingly antsy Congress is eager to hear a clear voice from anywhere. There are plenty of voices, but none seem to stand out above the rest. Even the much-touted Pickens Plan seems to have faltered, but coming soon to Washington, D.C. is a summit which should provide some guidance to a federal government drifting in the doldrums for the lack of a clear cut path to victory over the nations energy problems.

T. Boone Pickens, who produced a dramatic and much publicized plan to alter the nation's energy producing capabilities, has recently announced in a short web cast at his site, Pickensplan.com, a summit by Senate majority leader Harry Reid. The summit is an energy ideas summit, to give the upper house of Congress ideas on how to craft legislation that will help us chart a path through this murky maze of oil, nuclear, and green energy possibilities.

But does the Pickens Plan have any favorable wind blowing its way? Looking at Harry Reid's Senate website, the National Clean Energy Project has a great goal: rapidly increase energy generation from renewables, like wind, solar, and geothermal. So while it seems that T. Boone Pickens has at last found his renewed voice in the halls of power, is it enough?

The reason this question has to be asked is simple: renewables such as wind are only profitable as long as certain tax credits remain in place. Right now, the general agreement is that wind costs seven cents per kilowatt to produce, nuclear around five and a half, and fossil fuels anywhere between three and five cents per kilowatt. The tax credits are intended to allow a producer of renewable energy to compete with the lower costs of the established producers, namely, nuclear and fossil generation stations. The NW Energy Coalition, offering a chart here, shows how costs changed based on oil prices and tax credits.

The recent 700 billion dollar bailout bill passed in late 2008 retained the tax credits on wind for another year, but when the price of oil collapsed along with the financial sector before the election, a strange thing happened: T. Boone Pickens massively curtailed his plan for wind turbines, and the demand for wind turbines across the nation collapsed. The reason: the initial outlay for wind energy is high, and that low oil prices, combined with a collapse of credit availability, made it difficult to recover the cost of building the wind farm quickly, in the event the production tax credit is not renewed.

So, we have to ask, and hold the necessarily cynical view, that though T. Boone Pickens has a plan to reduce American dependence on foreign oil, will the Pickens plan withstand the pressures of Washington beltway politics, when the plan could not withstand a hit to the Pickens corporate wallet? Pickens is an intelligent man. An extension, and possibly even an increase, of the production tax credit for wind energy is sure to be on the table.

To close, the Energy Summit on February 23 offers a chance for Pickens to make a go of his wind energy plan for America. So, with a bit of well placed sarcasm, let's hope the Energy Summit doesn't just blow it off.

Sources:
T. Boone Pickens, BooneCam - T. Boone Pickens' Video Blog, PickensPlan.com
United States Senator Harry Reid, National Clean Energy Summit, National Clean Energy Project: Building the New Economy.
NW Energy Coalition, Cost of Wind vs. Fossil Fuels, Montana Environmental Information Center.