Article

Pickens' wind project finds rough sailing

A deflating economy has taken the wind out of a massive Panhandle alternative energy project. Tight lending stalled a $2 billion wind farm project headed by billionaire oilman and alternative power proponent T. Boone Pickens. Pickens' BP Capital delayed work on a state permit to build 170 miles of transmission lines carrying enough wind energy to power 300,000 homes.

A deflating economy has taken the wind out of a massive Panhandle alternative energy project.

Tight lending stalled a $2 billion wind farm project headed by billionaire oilman and alternative power proponent T. Boone Pickens.

Pickens' BP Capital delayed work on a state permit to build 170 miles of transmission lines carrying enough wind energy to power 300,000 homes. Pickens ordered nearly 670 turbines last spring for the project and planned to eventually quadruple that power production.

But the firm has taken a beating in the recent economic downturn. Pickens told the Wall Street Journal in September that his funds had lost $1 billion so far this year, including $270 million in personal losses.

BP Capital spokesman Jay Rosser said last week that work continued on the wind farm but that struggling capital market could delay or reduce those efforts.

"We are committed to wind development projects and believe it's a viable business for us," Rosser wrote in an e-mail response to questions. "The capital markets may lead us to scale back a bit but we are still going forward with our wind business."

Other companies with active wind construction projects in the state reported that they remained... more [truncated due to possible copyright]  

A deflating economy has taken the wind out of a massive Panhandle alternative energy project.

Tight lending stalled a $2 billion wind farm project headed by billionaire oilman and alternative power proponent T. Boone Pickens.

Pickens' BP Capital delayed work on a state permit to build 170 miles of transmission lines carrying enough wind energy to power 300,000 homes. Pickens ordered nearly 670 turbines last spring for the project and planned to eventually quadruple that power production.

But the firm has taken a beating in the recent economic downturn. Pickens told the Wall Street Journal in September that his funds had lost $1 billion so far this year, including $270 million in personal losses.

BP Capital spokesman Jay Rosser said last week that work continued on the wind farm but that struggling capital market could delay or reduce those efforts.

"We are committed to wind development projects and believe it's a viable business for us," Rosser wrote in an e-mail response to questions. "The capital markets may lead us to scale back a bit but we are still going forward with our wind business."

Other companies with active wind construction projects in the state reported that they remained on schedule. Firms completed more than 690 megawatts of new wind capacity in Texas as of September and had another 2,500 megawatts under construction, according to the latest figures from the American Wind Energy Association.

Texas' largest transmission project, too, had not stumbled during the downturn. Texas Public Utility Commissioners will meet Dec. 1 to continue the selection of transmission providers to move power out of specially designated zones in West Texas and the Panhandle, commission spokesman Terry Hadley said.

But market conditions and the sheer scale of the effort could have helped stall the Pickens project.

In addition to battering the hedge fund, the continuing financial crisis had tightened lending and lowered expectations for fuel demand. Natural gas, a major electrical fuel in Texas, has fallen with gasoline and dulled wind power's competitive edge.

Smaller projects were easier to move forward in the current market, said Walt Hornaday, president of Texas Wind Power in Austin. The projects still under way in Texas topped out at 283 megawatts - well short of the 1,000 megawatts Pickens hoped to deliver in his farm's first year of production.

Projects that needed the support of only one bank moved faster than larger farms that could require cooperation from multiple lenders, Hornaday said.

"The larger the project, the more exposed you are," Hornaday said.

The wind effort marks the second delay in roughly a month to projects operated by companies under the BP Capital umbrella.

Companies more than a month ago split the wind transmission effort from a project hoping to pipe billions of gallons of groundwater through a company-controlled freshwater supply district to a major city.

That effort, challenged by landowners and state politicians and probed by the U.S. Department of Justice, was put on hold in September.

The water business had struggled to find a fitting customer, and the Department of Justice nullified the state law allowing the creation of the board of the related freshwater district. Company officials at the time said the decision on the water project had nothing to do with a Department of Justice decision and that they continued to talk to prospective customers.


Source: http://lubbockonline.com/st...

OCT 29 2008
http://www.windaction.org/posts/17680-pickens-wind-project-finds-rough-sailing
back to top