A series of recent coincidences led me to delve a bit deeper into the growing drive toward wind-powered electricity generation. Not awfully deep, mind you, but deeper than I’d been of late.
First, my wife and I had gone for a drive, heading west and north from Fort Worth through several small towns and a lot of sparsely populated countryside. As we drove, we came across a huge number of wind-turbines. Then, I read a stunningly stupid comment from a member of the Texas delegation in the U.S. Congress (Joe Barton), claiming that harnessing wind power would slow down the wind, causing temperatures to rise. Finally, I read an article in the Texas Observer about a book entitled The Great Texas Wind Rush, written by Kate Galbraith and Asher Price.
My interest in wind-power goes a long way back, even before we spent time at the American Wind Power Center and Museum. But before that museum visit, most of my interest in wind power was focused on what was, to me, the magical allure of old, creaky windmills that powered pumps drawing water from deep-drilled wells.
The recent road trip took us by what I later learned was part of the Barton Chapel Wind Farm, developed by Gamesa Energy and later acquired by a company called Iberdrola Renewables, the U.S. component of a Spanish energy conglomerate. In addition to its U.S. subsidiary, the parent company in Spain owns subsidiaries in Brazil, Scotland, and Mexico.
The company’s businesses are energy-related (electricity and gas generation/distribution), along with involvement in real estate holdings. After discovering some of the lineage of the Barton Chapel Wind Farm and its owners, The Texas Observer article revealed to me that the government of the State of Texas, so vehemently anti-regulation and so utterly in love with the free market, was deeply supportive of the delivery of funds that enabled wind farm developments to grow so rapidly. The article notes that George Bush, the lover of all things oil, was the “unlikely hero” of the rapid growth of wind power in the state. In his efforts to radically deregulate energy, he calmed his skeptical environmentalists by signing off on “on what amounted to a government mandate for wind energy: 2,000 megawatts by 2009.” The article goes on to say “The law proved to be a wild success, and the book vividly illustrates how the resulting wind boom goosed economically struggling backwaters like Nolan County, west of Abilene, “transform[ing] those barren, desolate hills where cows had once grazed unhurriedly into money-making machines.” By 2008, Nolan County alone had installed 2,500 megawatts of wind energy—enough to power hundreds of thousands of Texas homes. ”
A bit more research confirmed that Iberdrola Renewables was, indeed, a beneficiary of a somewhat odd and unintended outcome of the Bush-era deregulation frenzy exported to Washington, DC. An article in the Wichita Falls Times Record News reported that Iberdrola received “a $72.6 million federal grant in lieu of faltering tax credits, the U.S. Treasury Department and the U.S. Energy Department announced Tuesday.” The grant was made during Obama’s first term, but the money came from The American Recovery and Reinvestment Act, the economic stimulus program put in place to stem the tide of red ink let loose by eight years of deregulation of the mortgage industry that led, in large part, to the collapse of the housing bubble.
While I have a few concerns about wind energy (do the spinning turbines really present significant danger to large numbers of migrating birds?), in general I’m much more inclined to support wind energy generation than to support continued focus on petroleum. Sure, at the moment we must continue to drill to supply our thirst for oil, but in my view we should endeavor to reduce our dependence on oil as quickly as we can prudently do it. As for subsidies to companies to build wind energy farms, if they are required to spur development (meaning companies won’t do it without them), then I support them. However, I do not support ongoing tax breaks for developers and operators, nor do I support allowing them to charge obscene rates for providing the electricity generation that taxpayer dollars funded. Since deregulation, electric utility prices in Texas have skyrocketed; the obscene profits that allow BP and Exxon and their ilk to wallow in money should not transfer, like a birthright, to wind energy providers (or any electricity provider, for that matter).
Only government and big business have adequate resources to build large-scale energy generation. Government can fund development by using taxpayer dollars; those dollars then go to big business, which marshals those resources to execute the development. Big business can use its own resources to do the same thing, without government financial support. If the former process takes place, the profits generated through the use of tax-dollar-funded-projects should be restricted to reasonable levels, taking into account the original funding source. If the latter process takes place, it is reasonable for the investor to be able to charge somewhat higher rates to recover its investment, but those rates still should not put an undue burden on the buyer, especially when a necessary commodity like electricity is the output.
And that’s what’s on my mind this morning.