Power Hungry

by Robert Bryce

  Atlantic Monthly’s Joshua Green trumpeted Denmark’s freedom from imported oil, but he didn’t mention the country’s coal imports. Nor did he mention the country’s ongoing drilling programs in the North Sea. Thomas Friedman said the United States should be “as energy smart as Denmark!” but he didn’t bother to compare the country’s wind power production to its hydrocarbon use.59

  Nevertheless, the facts—not the hype—show that the Danes are about as reliant on hydrocarbons as the United States and other countries are. In some ways, they are worse off than the United States when it comes to energy. The Danes themselves have begun to take note of the high cost of wind power and its inability to make significant reductions in carbon dioxide emissions. The September 2009 study by CEPOS said that Denmark’s wind industry “saves neither fossil fuel consumption nor carbon dioxide emissions.”60 The final page of the report even offers a warning for the United States: “The Danish experience also suggests that a strong US wind expansion would not benefit the overall economy. It would entail substantial costs to the consumer and industry, and only to a lesser degree benefit a small part of the economy, namely wind turbine owners, wind shareholders and those employed in the sector.”61

  FIGURE 17 Wind Power Versus Hydrocarbons: Denmark’s Consumption in 2007

  Sources: Energy Information Administration, “Denmark Energy Data,” http://tonto.eia.doe.gov/country/excel.cfm?fips=DA; Danish Energy Agency, “Energy Statistics 2007,” http://www.ens.dk/en-US/Info/FactsAndFigures/Energy_statistics_and_indicators/Annual%20Statistics/Sider/Forside.aspx.

  The conclusion to be drawn is clear: Although Denmark has repeatedly been held up as a model to be copied, the numbers tell a markedly different story. But then, few policymakers have bothered to look closely at what has actually happened in Denmark. Instead, they’ve been seduced by the easy charms of Dallas billionaire T. Boone Pickens, who has launched a multimillion-dollar media campaign aimed at promoting, well, T. Boone Pickens.

  The incredible media success of Pickens brings to mind a saying coined by another promoter, P. T. Barnum: “There’s a sucker born every minute.” Given the credulity with which politicians and media types gobbled up the Pickens Plan, it’s obvious that old P.T.B. would be proud of T.B.P.

  CHAPTER 11

  T. Boone Pickens Has a Plan (or a ClHue)

  FOR A FEW MONTHS, T. Boone Pickens was, once again, a rock star.

  On July 4, 2008, Pickens unveiled his blueprint to rescue America from the evil clutches of foreign oil. Within days he was everywhere. He posed for the cover of Texas Monthly, sitting in the back of a vintage Rolls Royce kitted out like James Dean in the movie Giant.1 The cover text boomed in huge black capital letters: BOONE. Below that, in smaller type: “He saved himself. Can he save America?” Inside the magazine, writer Skip Hollandsworth lauded Pickens as “the most famous wildcatter in Texas history.”

  Hollandsworth reported that when he caught up with Pickens in New York City on July 8, just four days after the launch of the Pickens Plan, “Boone had spent more than an hour that morning chatting about the plan on CNBC, and he had also appeared on ABC’s Good Morning America and NPR’s Morning Edition. Later that day, he was scheduled to meet with CNN, Fox, and the BBC, followed by visits to the offices of the Associated Press, the Wall Street Journal,” and other news outlets.

  About that same time, Slate named Pickens as number three in its ranking of the eighty most powerful octogenarians in America, behind only U.S. Supreme Court Justice John Paul Stevens and billionaire corporate raider Kirk Kerkorian.2 Pickens testified on Capitol Hill, had private meetings with Al Gore and Barack Obama (then a senator), and was a near-constant presence on television—appearing on The Jay Leno Show, and CBS Evening News with Katie Couric, to name just a few.3 Reporters swarmed the Dallas-based billionaire. They gushed over his money, his private jet—the leather seats are monogrammed!—and his ambitious plan to build the world’s largest wind farm, a 4,000-megawatt project in the Texas Panhandle.4

  Pickens’ media team spent lavishly to court the public and the media. They covered all the new media bases, with presences on Twitter, My-Space, LinkedIn, and YouTube.5 By November 2009, the Pickens Plan had close to 31,000 fans on Facebook.6

  Politicians flocked to Pickens, straining themselves to amp up the hyperbole. In August 2009, at a “National Clean Energy Summit” in Las Vegas, Senate Majority Leader Harry Reid, the Democrat from Nevada, declared, “I now belong to the Pickens church. We’re very thankful to have him here, he’s been a good friend and a real visionary.” At the same meeting, former president Bill Clinton extended a “special word of thanks to Boone Pickens,” conveniently ignoring Pickens’ lifelong support for Republicans and his financial support for the Swift Boat campaign against John Kerry in 2004. Former vice president Al Gore also chimed in, saying “I honest to God wish that more business leaders of your experience would care as much as you do, and throw themselves into this fight for the future of our country the way you are doing.”7

  Of course, seeing the rangy native of Holdenville, Oklahoma, in the limelight was nothing new. He’s the energy industry’s only rock star. Not even during Enron’s heyday (and downfall) was Ken Lay as visible as Pickens has been over the past few years. Pickens loves the attention. He’s friendly and cordial with reporters. And make no mistake, he’s a savvy operator. Pickens is among a rare breed of entrepreneurs who just knows how to make money. And over the past few decades, he has applied that ability, as an oil man, corporate raider, dealmaker, and money manager, to amass a fortune that Forbes has estimated at $3.1 billion.8 And those billions further burnish his rock-star credentials.

  Unfortunately for Pickens, though, rock stars don’t have a very long shelf life. Just a few months after Pickens rolled out his grand plan, the Wall Street Journal reported that two investment funds managed by Pickens had lost about $1 billion of his investors’ money.9 And exactly one year after Pickens launched his much-ballyhooed plan, he was forced to admit that his vision for the wind business was in tatters. In July 2009, Pickens told Elizabeth Souder of the Dallas Morning News that his wind-power project turned out to be “a little more complicated than we thought.”10

  Now there’s an understatement. But it shouldn’t be surprising. The Pickens Plan doesn’t pencil. It never did. The entire concept was based on a set of faulty assumptions, the crux of which was this: Using more wind power would mean less natural gas consumption, and the extra natural gas could be used to fuel vehicles, meaning the United States could drastically cut its oil imports.

  The reality is that Pickens launched his multimillion-dollar media campaign as part of an effort to backstop his own money-making ventures. In May 2008, he ordered $2 billion worth of wind turbines from General Electric.11 Two months later, he began selling the Pickens Plan, the first tenet of which was that wind power was the answer to America’s concerns about foreign oil—and by swaddling himself in Old Glory, many Americans were duped into believing him.

  The main fallacy in Pickens’ proposal: Using more wind power would mean more natural gas availability for the automotive sector. The problem with that logic is obvious: Utilities and power-plant owners now burning natural gas are not going to shut down their plants in order to save gas unless it makes economic sense for them to do so. In addition, and perhaps more important, is this: Over the past few years, state and federal regulators have blocked a large number of proposed coal-fired power plants. As a result, natural gas has become the preferred fuel for new power generation projects. Between 1997 and 2008, the volume of gas used for electricity production in the United States increased by 64 percent.12 The same trend is evident around the world. Between 2000 and 2008, more than 75 percent of new global electricity demand was met with gas-fired power plants.13

  Making fun of Pickens is easy, but to give him his due, he’s right about wanting to increase the use of natural gas in the transportation sector. That concept makes economic sense for many fleet operators. But—and i
t’s a big but—Pickens has grossly exaggerated the ability of the United States to make a quick transition to natural-gas-fueled vehicles. On the Pickens Plan website, the billionaire claims that using more wind power and “increasing the use of our natural gas resources can replace more than one-third of our foreign oil imports in 10 years.”14

  That’s an easy claim to make, but Pickens can’t do it. And he couldn’t do it even if he were somehow able to manage a one-hundred-fold increase in the number of natural-gas-fueled vehicles in the United States and do so in just ten years. Building a large fleet of natural-gas-fueled vehicles—and more importantly, the refueling infrastructure to support them—will take decades, not years.

  The numbers simply don’t work. Let’s look at oil imports: In 2008, the United States imported an average of 12.9 million barrels of oil and oil products per day.15 One-third of that volume—the amount Pickens claims he can save—is about 4.25 million barrels of oil per day. Fine. Let’s run the numbers.

  According to Natural Gas Vehicles for America, a Washington, D.C.–based trade association, there are about 120,000 natural gas vehicles (NGVs) now in use in the United States.16 Each of those vehicles consumes about 1,500 gasoline-gallon-equivalents per year.17 Using that 1,500-gallon-per vehicle figure, those 120,000 NGVs conserve the equivalent of about 180 million gallons of oil per year.

  Now let’s multiply that number by 100. Doing so increases the U.S. fleet to 12 million NGVs, which could save 18 billion gallons of fuel per year, the equivalent of 1.17 million barrels of oil per day.18 That type of reduction is significant. But remember, Pickens promised to cut oil use by 4 million barrels a day. Furthermore, creating a NGV fleet that size would require a Herculean effort. If the United States had 12 million NGVs, that fleet would be larger than the current global fleet of NGVs, which numbers about 9.6 million vehicles.19

  Pickens led a gullible media and an even more gullible public to believe that the evils of foreign oil could be overcome if only the public provided him with a few more subsidies for his pet projects. And he put forward his plan without discussing any fuels other than wind and natural gas. The fact that his unrealistic plan was so readily accepted by so many journalists and politicos provides additional evidence of the lack of skepticism about green energy in general and wind power in particular.

  In particular, politicians and the media willingly accepted Pickens’ claim that adding wind power would reduce the need for natural gas. Nothing could be further from the truth.

  Bird Kills? What Bird Kills?

  The Migratory Bird Treaty Act makes it illegal for anyone to kill a protected bird (including eagles and other raptors) by any means without first obtaining a permit.

  U.S. Fish and Wildlife Service press release, 200920

  On August 13, 2009, Exxon Mobil pled guilty in federal court to charges that it killed 85 birds—all of which were protected under the Migratory Bird Treaty Act (MBTA). The company agreed to pay $600,000 in fines and fees for the bird kills, which occurred after the animals came in contact with hydrocarbons in uncovered tanks and wastewater facilities on company properties located in five western states.21

  The Exxon Mobil prosecution is the latest of hundreds of cases that federal officials have brought against oil and gas companies over the past two decades for violations of the MBTA, a statute that has been on the books since 1918.22 But the oil and gas companies are not alone in having run afoul of this law. The U.S. Fish and Wildlife Service has also brought MBTA cases against electric utilities. On July 10, 2009, for example, Oregon-based PacifiCorp agreed to pay $1.4 million in fines and restitution for killing 232 eagles in Wyoming over a two-year period. The birds were electrocuted by the company’s poorly designed power lines.23

  Those cases are clearly justified. But they also underscore a pernicious double standard in the enforcement of federal wildlife laws: At the very same time that federal law enforcement officials are bringing cases against oil and gas companies and electric utilities under the MBTA, they have exempted the wind industry from any enforcement action under that statute and a similar one, the Bald and Golden Eagle Protection Act, enacted in 1940.

  Once again, the numbers behind the story are essential. As it turns out, the number of birds being killed by wind turbines dwarfs the numbers involved in the prosecution of Exxon Mobil. A July 2008 study of bird kills by wind turbines at Altamont Pass, California, estimated that the massive wind farm was killing 80 golden eagles per year.24 In addition, the study, funded by the Alameda County Community Development Agency, estimated that about 2,400 other raptors, including burrowing owls, American kestrels, and red-tailed hawks—as well as about 7,500 other birds, nearly all of which are protected under the MBTA—were being whacked every year at Altamont.25

  To recap: Exxon Mobil was prosecuted for killing 85 birds over a five-year period. The wind turbines at Altamont, located about 30 miles east of Oakland, are killing more than one hundred times as many birds as were involved in the Exxon case, and they are doing it every year. Furthermore, the bird-kill problems at Altamont have been documented repeatedly. A 1994 study documented numerous raptor kills, a finding that has been corroborated by essentially all of the subsequent studies.26

  To be sure, the number of birds killed by wind turbines is highly variable—and biologists believe the situation at Altamont, which uses older turbine technology, may be the worst example of bird kills by wind turbines.27 That said, the carnage at Altamont likely represents only a fraction of the number of birds being killed by wind power every year. Michael Fry of the American Bird Conservancy estimates that between 75,000 and 275,000 birds per year are being killed by U.S. wind turbines. And yet, the Department of Justice won’t press charges. “Somebody has given the wind industry a get-out-of-jail-free card,” Fry told me.28

  According to the American Wind Energy Association, each megawatt of installed wind power capacity results in the death of between one and six birds per year.29 At the end of 2008, the United States had about 25,000 megawatts of wind turbines, and environmental and lobby groups are pushing for the country to be producing 20 percent of its electricity from wind by 2030. Meeting that goal, according to the Department of Energy, will require the United States to have about 300,000 megawatts of wind capacity, a twelve-fold increase over 2008 levels.30 If that target is achieved, it will likely mean that at least 300,000—and perhaps as many as 1.8 million—birds will die each year from collisions with wind turbines.

  The American Wind Energy Association dismisses the problem as insignificant, saying that the bird kills are a “very small fraction of those caused by other commonly accepted human activities and structures— house cats kill an estimated 1 billion birds annually.”31 That may be true. But cats rarely get frog-marched to the courthouse in handcuffs. Nor are they killing many golden eagles.

  Wind turbines are also killing other flying animals. A study of a 44-turbine wind farm in West Virginia found that up to 4,000 bats had been killed by the turbines in 2004 alone.32 A 2008 study of dead bats found on the ground near a Canadian wind farm found that many of the bats had been killed by a change in air pressure near the turbine blades that caused fatal damage to their lungs, a condition known as “barotrauma.”33

  Bat Conservation International, an Austin-based group dedicated to preserving the flying mammals and their habitats, has called the proliferation of wind turbines “a lethal crisis.” In September 2009, I interviewed Ed Arnett, who heads the group’s research efforts on wind power. He said that the headlong rush to develop wind power is having major detrimental effects on bat populations, but few environmental groups are willing to discuss the problem because they are so focused on the issue of carbon dioxide emissions and the possibility of global warming. “To compromise today’s wildlife values and environmental impacts for tomorrow’s speculated hopes is irresponsible,” Arnett said. He added that only a handful of bat species are protected by federal law, and therefore, the killing of bats by wind turbines gets little atten
tion from the media.

  But the bat-kill problem has begun getting some attention. In December 2009, a federal court halted the construction of a wind project in West Virginia over concerns that the 122-turbine facility would harm the Indiana bat, which is protected by the Endangered Species Act. In his ruling on the case, a federal judge wrote that “there is a virtual certainty that Indiana bats will be harmed, wounded, or killed” by the proposed wind farm. The developers of the wind farm must now apply for a special permit from the Fish and Wildlife Service that will allow the project to proceed.34

  But the ruling in the West Virginia case brings up the obvious question: Why aren’t federal wildlife officials doing more to protect birds from wind turbines? During the late 1980s and early 1990s, Rob Lee was one of the Fish and Wildlife Service’s lead law-enforcement investigators on the problem of bird kills in western oil fields. Now retired and living in Lubbock, Texas, Lee told me that solving the problem of bird kills in the oil fields was relatively easy and not very expensive. Lee said the oil companies only had to put netting over their tanks and waste facilities, or close them. Asked why wind power companies aren’t being prosecuted for killing eagles and other birds, Lee told me that “the fix here is not easy or cheap.” Nor does Lee expect to see any prosecutions. “It’s economics. The wind industry has a lot of economic muscle behind it.”

  In other words, what’s good for the goose is not good for the gander. When it comes to energy production and the protection of America’s wildlife, federal law-enforcement officials are favoring the wind industry over other industries. And that favoritism occurs because of the myth that wind power is “green.”