Boone Pickens Is Full Of Hot Air

Posted by Bulging Bracket, Aug 15, 2008 1:12PM

Well, at least the US Government isn't giving money to PAWBT (sorta... defense guarantee for the evil Saudi family is worth rather alot, but then they do buy lots of stuff from US military firms. Perhaps Boeing should pay for the DOD as an advertising expense - "See what happens if you don't buy American? Lockheed - when you absolutely, positively, don't want to be hung by your enemies.")

As always, Environmentalism is a scam and "green" businesses are just trying to get subsidies. This is why I like capitalism, but not necessarily capitalists!

Posted by guest, Aug 15, 2008 1:19PM

This is not news.

Posted by guest, Aug 15, 2008 1:20PM

I know what you mean #2.
I like hookers put paying for sex really stinks.

Posted by guest, Aug 15, 2008 1:27PM

More interesting than a few dead birds is the fact that no power delivery grid exists between his wind farm and the actual consumers. It's unclear who's going to pick up the tab for this. Texas is enhancing their grid but it won't be ready when his farm comes online.

Posted by guest, Aug 15, 2008 1:28PM

who didnt know this?

Posted by Suits, Aug 15, 2008 1:29PM

You're like the NYT on Merrill to everyone else's DB on this story. Yes, Pickens has plans (does not yet own) to build a large wind farm. No, this doesn't mean it's a bad idea.

A 5 year extension of the federal PTC would cost a little under $20B annually. Since the government makes most of that back on taxes on wind farm profits, it's essentially a transfer of wealth from rate payers to wind farm owners. But $20B spread across the US is pennies per month for your average household. Meanwhile, the visibility this will give the industry will allow companies to make the large investments in the supply chain needed to bring down capital costs and make the industry self sufficient. It's a no-brainer.

Also, your brother's not seriously going to make the "turbines kill all the birdies" argument, is he? Come on.

Posted by guest, Aug 15, 2008 1:30PM

Posted on Youtube July 30:

http://www.youtube.com/watch?v=70HFEHB6dag

Posted by guest, Aug 15, 2008 1:48PM

Birdies need to merge with T Boone Pickens to survive.

Posted by guest, Aug 15, 2008 1:49PM

T. Boone has publically commented that he is not in the wind game for ethical or "green" reasons, but to make money. The guy manages a hedge fund. Maybe you should do more than watch CNBC commerials and do a little research.

Oil is a finite resouce, we all know that. The fact that smart money, such as that of an oil tycoon, is following wind power shows the realization that real resources are begining to be allocated towards alternative energy. Wind power will eventually be profitable, and so will the companies and financiers that contribute. If T. Boone can make money and at the same time reduce U.S. "dependence" on foreign oil, I say its a win-win.

Posted by guest, Aug 15, 2008 1:49PM

T. Boone has publically commented that he is not in the wind game for ethical or "green" reasons, but to make money. The guy manages a hedge fund. Maybe you should do more than watch CNBC commerials and do a little research.

Oil is a finite resouce, we all know that. The fact that smart money, such as that of an oil tycoon, is following wind power shows the realization that real resources are begining to be allocated towards alternative energy. Wind power will eventually be profitable, and so will the companies and financiers that contribute. If T. Boone can make money and at the same time reduce U.S. "dependence" on foreign oil, I say its a win-win.

Posted by guest, Aug 15, 2008 1:49PM

T. Boone has publically commented that he is not in the wind game for ethical or "green" reasons, but to make money. The guy manages a hedge fund. Maybe you should do more than watch CNBC commerials and do a little research.

Oil is a finite resouce, we all know that. The fact that smart money, such as that of an oil tycoon, is following wind power shows the realization that real resources are begining to become allocated towards alternative energy. Wind power will eventually be profitable, and so will the companies and financiers that contribute. If T. Boone can make money and at the same time reduce U.S. "dependence" on foreign oil, I say its a win-win.

Posted by guest, Aug 15, 2008 1:54PM

The Washington Examiner headline writer is stealing my thunder.

~The Forehead Slapper

Posted by guest, Aug 15, 2008 1:55PM

Call your buddies at BP Capital and ask how they did in July. heh heh heh......

Posted by guest, Aug 15, 2008 2:05PM

Maybe #10, #11 and #12 should watch a few CNBC commercials and stop hitting the "Post Comment" button.

Posted by guest, Aug 15, 2008 2:16PM

Terrible article by someone who knows nothing about the power markets. Although I'm sure he's in it for the money, there is something very humanitarian about Pickens message.

Think about it this way - if someone found a way to make a lot of money, they could either invest quietly or announce to the world that everyone needs to get in on it.

It's simple supply and demand. If you own wind power and lots of new wind power gets built, your margins get crushed.

Posted by guest, Aug 15, 2008 2:22PM

People don't care about this. They've found BigFoot for chrissakes.

Posted by guest, Aug 15, 2008 2:27PM

Young man, your sarcasm is ill directed and an insult to a very wise man. You should have a bit more respect for T Boone and his good ideas. As most good energy traders know there will be a squeeze on the domestic economy if we dont solve the the suppy side of the energy equation. The natty guys get it with shale, the coal guys get it with prb, the oil guys get it with anwar, the power guys get it with wind/nuclear.

You clearly dont get it. You once again show what an idiot you are.

Posted by guest, Aug 15, 2008 2:34PM

He drink my....milkshake!! Sllllurp...

He drink it up!!

-BeckyBootFan

Posted by guest, Aug 15, 2008 2:47PM

skeet skeet

Posted by guest, Aug 15, 2008 2:53PM

#16

He advocates adding wind capacity while removing more traditional less "green" generating capacity from the market, which essentially nets out flat. And, you need subsidies to make this shit profitable, which just begs for lobbying and PR in public.

But thanks for coming out champ. Now, go fax those confirms, jackass.

Posted by guest, Aug 15, 2008 3:00PM

In a rising market everyone looks like a genius. I see his funds are down badly last two months. Maybe he should stick to investing. Also have you heard about the crazy idea, that he believes people should get cars that run on natural gas? Gasoline is dangerous in a car accident, but imagine a large tank of natural gas on your car. The guy is an opportunist. When oil went over a 100 or 120 he preached it would drop, when it kept rising he went to 150-200 target, now that its falling im sure he will change his target. The guy throws out lots of predictions, most people only follow you when your right, and throw enough out and you sure will be.

Posted by guest, Aug 15, 2008 3:04PM

#7 and #10 both miss the point.

It is not about being a 'no-brainer' or being 'most obvious.' If the people decide to subsidize wind / solar / nuclear / pixie-dust whatever - that is fine. But then the subsidies should be extracted out of other energy sources. Slap on a direct 'alternative energy tax' on the price of gas and use it to subsidize these things. Let people know the direct impact of the subsidies and let the energy consumers pay for the alternate forms of energy that will save them.

However, do not take that money out of the 5% people of this country who pay taxes - while telling them that this money is to help the homeless and feed and educate the kids. The whole intent of socialist redistributists is to obfuscate because they know that their actions are essentially undemocratic and will NEVER be acceptable to the masses.

Hence they seek to hide the cost - and of course the 5% tax payers will never be able to prevent their own rape by the other misguided 95%. If you start asking the real consumers of energy to pony up cash for the alternative forms - see how quickly all the plans get shot down.

Also, both #7 and #10 are convinced that wind power is essentially profitable BUT for initial government subsidies. Can you elaborate upon that. What industry do you think is 'unprofitable' if someone else does all the initial capital investment? And if it IS inherently profitabe, then why subsidize? Why not structure the capital infusion in the form of a true INVESTMENT instead of subsidy? Why not tell Boon Pickens and Al Gore and company that the government will have first claim to all the cashflows of the entitity till such time the initial investment if paid for. Will Boon Pickens and Al Gore be ready to invest then?

Posted by guest, Aug 15, 2008 3:14PM

#7 said - "Also, your brother's not seriously going to make the "turbines kill all the birdies" argument, is he? Come on. "

Dude, that argument was actually made by your loony-left environmentalist brothers, and not Carney's brother.

Looks like you have forgotten how environmentalists have been fighting battles against hydroelectric power projects (totally renewable alt energy sources) as they supposedly impact fish migration patterns.

The same people are the ones who think that drilling oil in ANWR will destroy all wildlife on this plant. How then, would they not oppose the terrible impact massive windmills may have on birds!!!

Posted by Suits, Aug 15, 2008 3:20PM

Based upon that misguided rant it appears you have no idea how the subsidizes actually work but I'll give you a chance to redeem yourself. Here's a hint: The government puts up no money to develop/construct/operate a wind farm.

Don't lump Pickens in with Gore. Pickens has reasonable ideas; Gore is a nut.

Posted by guest, Aug 15, 2008 3:26PM

Thank you for posting this. It should have been obvious, but a lot of people still don't understand this.

Posted by guest, Aug 15, 2008 3:40PM

#25, My weak little mind tells me that when you say 'subsidy' it means that the government is constributing some money 'hard cash' towards running a venture, without any expectation of payback. when you expect payback, it is called a 'capital investment' and not 'subsidy.' Venture capitalists 'invest' in risky ventures with potential for future upside. They do not 'subsidize' them.

Also the did you REALLY make the argument about the government making back money in the form of taxes on profits? Doesn't the government make money of profits of EVERY company? Then should all other industries also be subsidized? If not why not? Are you proposing that these alt-energy industries pay higher corporate taxes by virtue of the fact that they have been subsidized?

Why are you scared of calling a subsidy what it is? Free money from the government which other industries are not getting.

And it is NOT a transfer of wealth from rate-payers to the investor. It is a transfer of money from the 5% people who pay taxes to a select few alt-energy investors AND all the consumers of the alt-energy.

Given your rudimentary understanding of 'subsidies,' that condescending attitude of yours is highly misplaced.

Posted by lemmerdeur, Aug 15, 2008 4:02PM

Clan Carney is hiding the other, half-wit brother in the attic - Mark Carney runs the Bank of Canada.

Posted by guest, Aug 15, 2008 4:06PM

Re Subsidies for Green Eenergy:
I would say that the First Gulf War, the Iraq War, and the overall involvement of the US military in the Gulf Region in the past 50 years count as a nice (so to speak) subsidy to oil.
The oil wells in the Gulf are GSE's, just like Fannie and Freddie: the US government will not let them fail, and for the same reason (almost). US voters believe that they have a right to cheap fuel and a right to cheap money.
That said, I'd rather see a level playing field by way of a carbon tax, rather than by subsidies.
But then again, if you are a politician you love handing out subsidies and picking winners (or rather: deluding yoursef that you are doing that).

Posted by guest, Aug 15, 2008 4:15PM

23/27 here, I totally agree with a surcharge on gas. The was is after all about the country's energy security (dictator removed and all is collateral positive side-effect). There is not point kidding about it, and there is not point assuming that it is not important.

The was deficit should be covered for using a direct tax on gas. And the government of Iraq should be made to pay us some of the oil billions that they are now racking up (apparently they have a surplus thing running). Why build bridges and roads there for free?

Similary, alt-energy should be directly subsidized for by current day energy users. My main issue is that in the current scheme of 'subsidies', 90% of the energy users get a free pass, the entrepreneurs make money while 10% people pay for all this (and the same 10% incidentally are ALSO the ones paying for the war.)

Everyone should pay their 'fair share'!!!

Posted by Suits, Aug 15, 2008 5:09PM

I already admitted it's a subsidy. I posted above it costs about $20B annually. This pales in comparison to subsidies for other forms of energy. However, at no point is a government transfer of cash involved. I'll elaborate.

The main tax incentive for wind power is called the Production Tax Credit (PTC). This provides a tax credit (1-1 tax reduction) for owners of a wind farm based upon MWh produced (hence "production" tax credit). Private money pays to develop/construct/operate wind farms, with these tax credits accruing to the equity owners of the wind farm. (Wind farms also qualify for 5 years MACRS but this is a small incentive compared to the PTC).

Therefore, when you post about wind being "profitable", you'll need to define exactly what you mean. Wind farms themselves are extremely profitable, because the fuel is free. Your average wind farm has a 70%+ EBITDA margin. Power sales from the wind farm are taxed at standard corporate rates, which consists of cash payments to the government. Since the tax credit is linked to power sales (production!) yes, the PTC largely pays for itself. GE recently did a study confirming this, you can use teh Googles to find it. Please don't waste everyone's time informing us GE is a major turbine manufacturer.

Going back to profitability, the issue is really can investors in a wind farm earn an adequate return on their investment? Presently, the answer is "it depends" - on your wind resource, capital costs, local power markets, etc. The PTC then serves to make a larger number of projects viable than would happen by market forces alone.

The largest issue facing the industry today, as someone has already posted, is transmission. The cost to build a nationwide high powered transmission network to enable large wind additions is $60B. Sounds large, but that's a multi-year investment and compares to the $6B worth of band-aids currently going into our grid today. More importantly, this investment is needed regardless of wind power because of years of under-investment in the grid.

The second (and this gets back to your "profitability" issue) is rising capital costs. Turbine prices are rising due to steel prices and a lack of supply. Supply is constrained because there is a lack of parts to build turbines - not many manufacturers can produce 8 ft diameter bearings and gears that go into a modern turbine. These are asset intensive business, and people don't want to make investments into them unless they can see the demand will stay strong for several years. Extended the PTC will allow this to happen, and allow capital costs to decrease and the industry to become free of subsidies altogether.

Posted by Anal_yst, Aug 15, 2008 5:36PM

Gas tax shoulda been here years ago, but normative statements, especially with the wisdom of hindsight aren't gonna get us anywhere. In a election year, I'm expecting a slew of uber-retarded laws and policies to come outa washington (and elsewhere). Remember, the voice of reason has no place here kids

Posted by guest, Aug 15, 2008 5:41PM

Supaman dat hoe!

Posted by guest, Aug 15, 2008 6:36PM

#31, said

"These are asset intensive business, and people don't want to make investments into them unless they can see the demand will stay strong for several years."

Thank you for that blinding glimpse of the obvious from business 101. Want to be let in on a secret? This is not the first industry on planet earth that is 'asset intensive' or exposed to the vagaries of varying raw material prices and/or demand. That is how ANY business runs.

Tax credits are an elaborate way of effectively applying a preferential tax system on 'chosen' industries. You fail to justify WHY the government should lose out on that tax revenue which could technically be passed on to everyone by giving everyone an equivalent tax cut (if the government really has no use for that extra revenue).

And are you arguing that ALL industries that face uncertain profits and high upfront capital costs be given a similar non-cash subsidy that 'pays for itself' (whatever that means)? Why not?

"Extended the PTC will allow this to happen, and allow capital costs to decrease and the industry to become free of subsidies altogether. "

Incidentally PTC has existed for 16 YEARS now. When exactly is it that the industry will become 'free of subsidies'? Go ahead, wild guesses also allowed.

This is nothing but another example of some vested interests trying to get the poor 10% tax payers underwrite their business proposals. Boone Pickens is a shrewd businessman. He has sniffed a nice opportunity. Al Gore and associates thought that they would corner this green/alt-energy gravy train for their own benefit and hence pushed hard on it. However, the clever oilman has been in the business of making money in the energy sector for longer than they have planned their 'green coup.' He has totalled muscled into their turf and is running away with their pie. Good for him and serves them right. But in no way does it wipe out the fact that this is another example of socialist certral planning with forcibly extorted tax payer funds being wasted at the whims of the politicians.

Posted by guest, Aug 15, 2008 7:34PM

Gotta love billionaire welfare mommas.

Posted by guest, Aug 15, 2008 11:55PM

Stay with the financials boys and stay out of the technical side...

The only challenge to the technology is - no storage capability for wind or electricity. You can't forecast the wind supply accurately, you can't tell when it will stop. So it has to be fully backed at 100% by traditional capacity. So who will agree to invest in the traditional units to back up the wind when these traditional units will only run occasionally and they can't forecast really when they will? It's not grain or porkbellies...

When it runs it will offset burning fossil fuels, but at what cost? It is admirable, but not ready to be bludgeoned into the national energy policy. A better use - consumer-scale solar and wind to shave demand - but this is still not enough.

Posted by guest, Aug 15, 2008 11:56PM

sorry - left this out... this is just ethanol part II...

Posted by stockshotz, Aug 16, 2008 7:34PM

To the guest who said that pickens plan is ethanol part 2 I guess you are also in the camp that believes if we open up drilling in ANWR and the OCS it won't impact oil prices.

Ethanol was flawed because it drove up the price of corn. I can't see harnessing wind power causing any inflationary pressures on the price of food.

www.stockshotz.blogspot.com

Posted by Cincinnatus C, Aug 16, 2008 8:03PM

poster #10 and #12 are spot on, but #11 is talking straight garbage.

Posted by guest, Aug 18, 2008 11:05AM

As if on que to #7's statement above "Also, your brother's not seriously going to make the "turbines kill all the birdies" argument, is he? Come on. " - Here are extracts from the editorial on WSJ today.

Even in wind, Texas leads the way. Apparently liberals want 'renewable' energy as long as the windmills are not where they live and neither are the transmission lines. Go figure.

http://online.wsj.com/article/SB121901822110148233.html?mod=opinion_main_review_and_outlooks

"The environmental class is likewise lobbying state commissioners to kill a 150-mile link between San Diego and solar panels because it would entail a 20-mile jaunt through Anza-Borrego state park"

"Wind power has also become contentious in oh-so-green Oregon, once people realized that transmission lines would cut through forests. Transmissions lines from a wind project on the Nevada-Idaho border are clogged because of possible effects on the greater sage grouse."

Posted by guest, Aug 20, 2008 9:36AM

What IS this whole sick thing about ONLY doing anything if there's MONEY or PROFIT in it, lol? When are we going to LOSE that archaic behavior and grow the hell up?

Granted it would be tacky AND sleazy if he's promoting this primarily to get profits (if that is indeed the case) but yes, boys and girls... you can kiss profit,consumer goods, materialism and pretty much the world as we know it (e,g. The whole shebang) goodbye if we don't take action on energy policy ASAP.

READ FOR YOURSELVES

http://www.postcarbon.org/call-to-action

http://www.rollingstone.com/news/story/7203633/the_long_emergency

http://www.storyofstuff.com/

http://www.wordpress.peakmoment.tv/conversations/?p=180

http://www.forthefuture.org/

http://www.richardheinberg.com/

Posted by guest, Aug 20, 2008 9:45AM

P.S. Breakthrough technology - laugh if you want, but maybe in a few years those laughs will slowly turn to respect.

http://www.turby.nl/