Wealthy Oil Mogul Boone Pickens to Invest in 4 Gigawatt Wind Farm

Wealthy oil investor Boone Pickens has decided to take a few steps out of the oil patch. And then a few more after that. Bucking the trend of greenwashing among major oil companies, where companies spend paltry portions of their revenue on renewable resources in order take credit for helping the environment, Boone, who made a fortune betting on high oil prices, is investing boatloads of money to build the nation's largest wind farm.

According to recent reports in the "Associated Press" and "Dallas Morning News," Boone has placed an order for 667 General Electric wind turbines for a sum of $2 billion dollars. The 667 turbines would produce about 1,000 megawatts of power -- enough to provide electricity for 300,000 homes. But this is just the first phase in a plan to build a total of 4,000 megawatts of wind generation capacity by 2014.

To put the massive scale of Boone's wind energy project in perspective, an average nuclear power plant produces around 1,000 megawatts of electricity. So the nameplate capacity of the proposed wind farm is equal to nearly 4 percent of all the electricity generated by nuclear power in the US today.

But if you think Boone is building his massive north Texas wind farm for altruistic reasons, think again. With the cost of natural gas and coal exploding in world markets, the cost of generating electricity from these energy sources is also rising. On the other hand, wind energy production costs have stabilized or even fallen during the same time period. At 2 billion dollars, the 1,000 megawatts Pickens intends to install in 2008 is less than the cost of a nuclear power plant and about equal to the cost of a new coal power plant -- minus the fuel in both cases. And with the cost of electricity also on the rise, Pickens could stand to make a pretty penny.

Pickens isn't the only energy investor seeking to capitalize on the relatively low cost of wind energy. In 2007, alone, the US Energy Information Agency reported more than 4,000 megawatts of new wind energy installation in the US. In the first quarter of 2008, over 1400 megawatts of new wind energy was installed and the American Wind Energy Association expects a total of well over 4,000 new megawatts of wind energy by the end of the year. In total, the US is expected to possess over 20,000 megawatts of wind generation capacity by the end of 2008 -- that's nearly 20 nuclear plants worth of capacity distributed over 34 states.

Given the trend it would seem high fossil fuel prices, a political aversion to nuclear energy, and relatively low wind energy prices is planting the seeds of a new renewable energy based capitalism. In this form of capitalism, profit seekers are taking advantage of the inherent scarcity and market weakness of traditional energy sources by bringing new, and cheaper, sources of renewable energy to market. Furthermore, the current tax environment is favorable for wind energy development. One wonders when the old adage about renewable energy being too expensive to develop will disappear and a new paradigm where old fossil fuels are seen as expensive and impractical comes to the fore.

Looking at the current gold rush to renewable energy capitalism, it seems those times are closer than we might have previously thought.