The boom in cheap natural gas in this country is good news for the environment, because relatively clean gas is replacing dirty coal-fired power plants. But in the long run, cheap natural gas could slow the growth of even cleaner sources of energy, such as wind and solar power.

Natural gas has a bad rap in some parts of the country, because the process of fracking is not popular. But many people looking at cheap natural gas from the global perspective see it as a good thing.

Henry Jacoby, an economist at the Center for Energy and Environmental Policy Research at MIT, says cheap energy will help pump up the economy.

“Overall, this is a great boon to the United States,” he says. “It’s not a bad thing to have this new and available domestic resource.” He says cheap energy can boost the economy, and he notes that natural gas is half as polluting as coal when it’s burned for electricity.

“But we have to keep our eye on the ball long-term,” Jacoby says. He’s concerned about how cheap gas will affect much cleaner sources of energy. Wind and solar power are more expensive than natural gas, and though those prices have been coming down, they’re chasing a moving target that has fallen fast: natural gas.

“It makes the prospects for large-scale expansion of those technologies more chancy,” Jacoby says.

Natural Gas: ‘A Bridge To Nowhere’?

From an environmental perspective, natural gas could help transition our economy from fossil fuels to clean energy. It’s often portrayed as a bridge fuel to help us through the transition, because it’s so much cleaner than coal and it’s abundant. But Jacoby says that bridge could be in trouble if cheap gas kills the incentive to develop renewable industry.

Long-term renewable deployment in the U.S. is going to depend primarily on policy. Is there enough concern about environmental consequences to put in place incentives for renewable energy?

- Trevor Houser, energy analyst, Rhodium Group

“You’d better be thinking about a landing of the bridge at the other end. If there’s no landing at the other end, it’s just a bridge to nowhere,” he says.

In the short run, at least, the wind industry isn’t too worried about this. Denise Bode, who heads the American Wind Energy Association, says low gas prices don’t undercut current prices for wind, because those are mostly fixed by 20-year contracts, not market prices.

And even if wind is a bit more expensive than natural gas, she says utilities still want it in their mix. Windmills aren’t subject to changing fuel prices, so the cost of production is quite predictable. That’s not true for natural gas — there’s no guarantee that today’s cheap prices will stay as low as some predict.

“It’s very difficult to really know how certain that is, so you always want to balance that with something that is certain,” Bode says.

Reducing Political Will For Renewables?

What really worries her isn’t natural gas — it’s politics. Wind could lose a huge tax break at the end of this year. And that would have a much more dramatic effect than low natural gas prices.

“You’ll see very low numbers” for new wind installations if the federal production tax credit expires,” Bode says. “In fact, I think EIA [the U.S. Energy Information Administration] projects almost zero for 2013.”

The solar industry’s subsidies run for several more years, so they are not in that bind, at least not yet. But Trevor Houser, an energy analyst at the Rhodium Group, says these tax credits and other incentives like state renewable standards are key if renewables are to grow and mature during the natural-gas glut.

“Long-term renewable deployment in the U.S. is going to depend primarily on policy,” Houser says. “Is there enough concern about environmental consequences to put in place incentives for renewable energy?”

That partly depends on how much of a premium people and companies will be willing to pay for cleaner energy. Right now, with natural gas so cheap, that premium is fairly substantial.

“If those prices hang around for another three or four years, then I think you’ll definitely see reduced political will for renewable energy deployment, ” Houser says. “But we don’t expect prices that low to hang around that long, because low prices are in many ways self-correcting.”

Gas is so cheap now that companies that produce it are struggling to make a profit. So Houser expects prices to move up. That will help close the price gap between gas and renewable energy.

Even so, there’s still a huge way to go before prices and government policies do enough to significantly reduce emissions of the gases that contribute to global warming.

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The Obama administration’s investments in the green energy economy have already produced a great number of jobs in a sector with significant potential for additional growth. It would be a serious mistake to undercut the initiative just as it’s contributing to the recovery.

While estimates vary on exactly how many jobs the American Recovery and Reinvestment Act created, several experts have put the number at 2 million or more. Separate studies by Daniel J. Wilson of the Federal Reserve Bank of San Francisco, economists James Feyrer and Bruce Sacerdote of Dartmouth College and the Congressional Budget Office also conclude that government spending on infrastructure, goods and services produces one of the highest jobs-per-dollar ratios of all spending alternatives.

A study conducted in 2011 by the BlueGreen Alliance and the Economic Policy Institute found that the stimulus created or saved 997,000 green jobs — including jobs in the energy sector — through the end of 2010. One can view some of these jobs online via the Web site http://Recovery.gov, although these are only the “direct” jobs reported by project contractors. Even more of these jobs can be viewed at the Department of Energy’s Loan Program Office Web site, https://lpo.energy.gov.

Although critics lambaste the Loan Program Office and the Recovery Act in general because of the Solyndra scandal, far more projects have successfully used Recovery Act money to create 50,000 jobs — not counting indirect employment.

Some argue that these green jobs destroy other jobs in the fossil fuel industries, such coal mining. But University of California at Berkeley researchers in 2010 and concluded that green and low-carbon energy investment produces significantly more jobs than are lost in fossil fuel industries. In fact, solar photovoltaic energy creates the most employment of all the energy sources the researchers studied. The researchers ultimately determined that increased energy efficiency and a high renewable portfolio standard target — along with nuclear energy and carbon capture and storage technology — would yield millions of full-time equivalent jobs.

Nor should anyone accuse the Obama administration of using government funds to prop up a sector best left in private hands. The Council of Economic Advisors finds that $46 billion in Recovery Act funds will leverage more than $150 billion in clean energy financing by private investors.

Further, green energy represents not only a high-return investment for the federal government but a competitive world market in which America has arguably fallen behind despite years of continued growth in wind power and other sectors. These investments also benefit the public by reducing emissions of air and water pollutants, preventing global warming, addressing environmental justice, and more.

Princeton University economist and New York Times columnist Paul Krugman recently cautioned against only counting jobs gained while ignoring jobs lost. Of course, there were still 13.1 million unemployed Americans when last measured. But given the success and potential of Obama’s green energy policies, the real question is not whether his administration has hindered private sector growth. Rather, we should ask if the administration’s policies should be taken further, potentially along with the enactment of a clean energy standard or other national-level energy policies that target both energy and economic development.

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By DARREN SAMUELSOHN | 9/21/11 11:30 PM EDT

President Barack Obama is racking up an impressive losing streak when it comes to energy.

Under pressure from Republicans, he embraced offshore drilling — just weeks before the BP oil spill. He offered support for nuclear power, only to watch a disaster unfold in Japan. Gas price hikes in the spring disrupted his economic message. Feeling the heat from Republicans again, he infuriated his green base by bailing out on a long-promised ozone standard.

And then came Solyndra — the California solar company startup Obama touted as a green jobs success story even as it bled money and ultimately collapsed amid political scandal.

“The guy got dealt a bad hand,” said a top environmental consultant. “But he’s played a bad hand very badly.”

It’s an emerging consensus coming from the left and the right: While Obama was once viewed as a victim of things he can’t control — faulty blowout preventers, a tsunami, gas prices, the tea party — critics on both sides of the aisle say his administration has made matters worse.

“If you’ve got an agenda bouncing along with no vision and things happen, you look reactive, and they are,” said Doug Holtz-Eakin, a former economic adviser to John McCain’s 2008 presidential campaign.

With Solyndra and the lost $535 million loan guarantee, Obama’s entire renewable energy portfolio is likely to be on a permanent state of defense thanks to administration missteps in how it handed out stimulus money.

Some greens, meantime, are pining for Al Gore, or wondering what their world would have been like if Hillary Clinton had won the Democratic nomination and then the presidency back in 2008. Looking at Obama’s inner circle, they see missteps resulting from not having anyone like them helping to call the shots.

Yes, Carol Browner worked for Obama until earlier this year as his top White House energy and climate adviser. And he has some top-notch experts in Energy Secretary Steven Chu, a Nobel Prize winning physicist, and EPA Administrator Lisa Jackson.

But with Browner gone, both appear to be on the outside looking in — never more so than earlier this month, when Obama overruled Jackson on the long-promised rewrite of Bush-era ozone rules.

“He dispassionately picked a set of people who technically were credentialed in their positions, but these people are not sitting in the center of the universe in that White House,” said the environmental consultant, who also noted neither Obama nor Vice President Joe Biden had very deep track records on green issues while serving in the Senate.

Obama arrived in the White House embracing the green jobs mantra that previously existed mainly in California environmental policy and in congressional Democrats’ talking points.

And while the president used the “clean energy” message as part of his larger campaign to help with the country’s economic recovery, it’s lost its luster as unemployment rates hover around 9 percent.

Now, with Solyndra’s collapse, Republicans are promising to make the green jobs concept politically toxic for years to come.

“The administration is wrong to think they can turn this economy around with green jobs,” said Rep. Cliff Stearns (R-Fla.), the chairman of the House Energy and Commerce Committee subpanel investigating Solyndra. “If he’s focusing on developing a stimulus package for solar panels and wind mills and batteries and he thinks he’s going to turn the economy simply on the stimulus for green jobs, he’s mistaken.”

Cap-and-trade legislation also stands out as something that’s been placed on the permanent back burner in part because of how Obama handled the issue.

Once the subject of countless white papers and bipartisan compromise talks, Obama’s failure to get the measure across the finish line has resulted in angry screeds from the likes of Gore, who wrote in a Rolling Stone essay this summer that the president “has never presented to the American people the magnitude of the climate crisis.”

“You can’t place ‘global warming’ and an ephemeral promise of ‘future green jobs’ high on the policy agenda when spurring growth and jobs now is the most important challenge,” said Stuart Gottlieb, a Columbia University public affairs professor and former Senate Democratic aide. “This is why Obama actually rebuffed his own EPA’s efforts to raise the costs on carbon emitters.”

Industry attorney Scott Segal said Obama’s woes on energy actually stem from not having enough people around him with real-world experience on energy issues — turning a critique of former President George W. Bush on its head.

“If you ask yourself who really is the top tier energy adviser in the administration, the answer doesn’t readily come to mind,” said Segal, who represents electric utilities and petroleum refiners at Bracewell & Giuliani. “It doesn’t surprise me that major opportunities in the energy sector don’t occur to them. They get missed.”

As should be expected, the Obama administration pushed back hard against the idea they’ve been inept on energy.

Oil production has reached its highest levels since 2003, while foreign oil imports as a share of total use have fallen from 60 percent in 2006 to 52 percent in 2009. Renewable electricity will have doubled by the end of Obama’s term. And the White House brokered two rounds of new fuel economy limits with auto companies and California officials that will lead to cars and light-duty trucks ultimately averaging 54.5 miles per gallon by 2025.

“I think it’s sort of like the old country song, ‘Looking at all the wrong places.’ I think you’re looking in all the wrong places,” said Agriculture Secretary Tom Vilsack. “You can find isolated examples of things that didn’t work. And it’s easier, with all due respect to you folks, it’s easier to report on that than it is to report on the multitude of things that are going right.”

With Obama at his side Wednesday in New York, former President Bill Clinton made it clear that the current occupant of the White House is different than his GOP rivals on the energy issue. “He also is one of those Americans who believes climate change is real and deserves a real response,” Clinton said.

Bemoaning the political obstacles tied to curbing greenhouse gases, Obama added, “It is technically difficult to figure out how we are going to deal with climate change — not impossible, but difficult.”

Daniel Weiss, a senior fellow at the Center for American Progress Action Fund, said some of Obama’s stumbles on energy are a byproduct of inevitable technological risks. And besides, Gore wouldn’t be able to do any better.

“If Al Gore was president with 9.5 percent unemployment, I think that you’d see very similar decision making from what you see from this administration,” Weiss said. “Rightly or wrongly, they’re much more sensitive both in the White House and on Capitol Hill to arguments that such and such a proposal is going to cost jobs.”

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Supporters of “green energy” like to say it will create more jobs. They’re wrong.

By Bjørn Lomborg

Phil Tussing installing Phil Tussing installs photovoltaic solar panels.  Green initiatives might create jobs, but they kill others.  Political rhetoric has shifted away from the need to respond to the “generational challenge” of climate change. Investment in alternative energy technologies like solar and wind is no longer peddled on environmental grounds. Instead, we are being told of the purported economic payoffs—above all, the promise of so-called “green jobs.” Unfortunately, that does not measure up to economic reality.

The Copenhagen Consensus Center asked Gürcan Gülen, a senior energy economist at the Bureau for Economic Geology at the University of Texas at Austin, to assess the state of the science in defining, measuring, and predicting the creation of green jobs. Gülen concluded that job creation “cannot be defended as another benefit” of well-meaning green policies. In fact, the number of jobs that these policies create is likely to be offset—or worse—by the number of jobs that they destroy.

On the face of it, green-job creation seems straightforward. Deploying more wind turbines and solar panels creates a need for more builders, technicians, tradesmen, and specialist employees. Voilà: Simply by investing in green policies, we have not only helped the climate but also lowered unemployment. Indeed, this is the essence of many studies that politicians are eagerly citing. So what did those analyses get wrong?

In some cases, Gülen finds that proponents of green jobs have not distinguished between construction jobs (building the wind turbines), which are temporary, and longer-term operational jobs (keeping the wind turbines going), which are more permanent. Moreover, sometimes advocates have assumed, without justification, that the new jobs would pay more than careers in conventional energy. In other cases, the definition of a “green” job is so fuzzy that it becomes virtually useless. If a sustainability adviser quits a concrete factory and goes to work instead for a renewable energy project, can we really conclude that the number of green jobs has actually increased?

More disturbing is Gülen’s finding that some claims of job creation have rested on assumptions of green-energy production that go far beyond reputable estimates. Of course, if you assume that vast swaths of the countryside will be covered in wind turbines and solar panels, you will inevitably predict that a large number of construction jobs will be required.

But the biggest problem in these analyses is that they often fail to recognize the higher costs or job losses that these policies will cause. Alternative energy sources such as solar and wind create significantly more expensive fuel and electricity than traditional energy sources. Increasing the cost of electricity and fuel will hurt productivity, reduce overall employment, and cut the amount of disposable income that people have. Yet many studies used by advocates of green jobs have not addressed these costs at all—overlooking both the cost of investment and the price hikes to be faced by end users.

The companies calling for political intervention to create green jobs tend to be those that stand to gain from subsidies and tariffs. But, because these policies increase the cost of fuel and electricity, they imply layoffs elsewhere, across many different economic sectors. Once these effects are taken into account, the purported increase in jobs is typically wiped out, and some economic models show lower overall employment. Despite a significant outlay, government efforts to create green jobs could end up resulting in net job losses.

Still, proponents might argue that even if that is true, investment in green jobs is nonetheless a good way to stimulate a sluggish economy. But Gülen shows that there are many other economic sectors, such as health care, that could actually create more jobs for the same amount of government investment.

In addition to job creation, some researchers have blithely claimed that all sorts of other economic benefits will accrue from investment in alternative energy, including increased productivity, higher disposable incomes, and lower operating costs for businesses. Here, too, Gülen concludes that the assertions are “not backed up by any evidence and are inconsistent with the realities of green technologies and energy markets.”

The fundamental problem is that green-energy technologies are still very inefficient and expensive compared to fossil fuels. Deploying less efficient, more expensive alternative-energy sources will hurt businesses and consumers, not help them.

In order for the whole planet to make a sustainable shift away from fossil fuels, we need to make low-carbon energy both cheaper and more efficient. That requires a substantial increase in research and development into next-generation green-energy alternatives. Today’s research budgets are tiny, and that desperately needs to change. In the meantime, the public should be cautious of politicians’ claims that deploying today’s inefficient, expensive technology will result in windfall benefits at no cost.

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A case study in the folly of politically directed investment.

President Obama’s budget next week is expected to include even more subsidies for renewable energy. Before Congress bellies up to that bar one more time, it ought to dissect the fate of Range Fuels and the wood chips fad.

As taxpayer tragedies go, Broomfield, Colorado-based Range Fuels has all the plot elements—splashy headlines, subsidies and opportunistic venture capitalists. Range got its start in 2006 when George W. Bush used a State of the Union address to extol wood chips as a source for cellulosic ethanol that would break America’s “addiction to oil.” Mr. Bush pledged that with government funding cellulosic ethanol would be “practical and competitive within six years.”

Vinod Khosla stepped in with his hand out. The political venture capitalist founded Range Fuels and in March 2007 it received a $76 million grant from the Department of Energy—one of six cellulosic projects the Bush Administration selected for $385 million in grants. Range said it would build the nation’s first commercial cellulosic plant, near Soperton, Georgia, using wood chips to produce 20 million gallons a year in 2008, with a goal of 100 million gallons. Estimated cost: $150 million.

The media and political class swooned. Bush Energy Secretary Samuel Bodman attended the plant’s groundbreaking in November 2007, hailing Range as a private-sector “pioneer” that would “reduce our dependence on foreign oil.” Range was celebrated in the New York Times and Forbes.

In 2007, Congress doubled down by mandating that the U.S. use 100 million gallons of cellulosic ethanol yearly by 2010, and 250 million gallons by 2011—though not a single commercial facility existed at the time. The Environmental Protection Agency explained in a subsequent report that the bulk of that initial 100 million gallons would come from Range Fuels and another Khosla-funded venture, Cello Energy.

By spring 2008, Range had also attracted $130 million of private funding, the largest venture investment in the nation in the first quarter of that year. Investors included such prominent VC firms as Blue Mountain and Khosla Ventures and California’s state pension fund, Calpers. The state of Georgia kicked in a $6 million grant, and all told Range raised $158 million in VC funding in 2008.

The result has not been another Google. By the end of 2008 with no operational plant in sight, Range installed a new CEO, David Aldous. In early 2009, the company said production was not expected until 2010. Undeterred, President Obama’s Department of Agriculture provided an $80 million loan. In May 2009, Range’s former CEO, Mitch Mandich, explained that the problem was that nobody had figured out how to produce cellulosic ethanol in commercial quantities. Whoops.

In early 2010, the EPA said Range would finally produce some fuel in 2010—but only four million gallons, not 100 million, and of methanol, not cellulosic ethanol. So taxpayers have committed $162 million (along with at least that much in private financing) to produce four million gallons of a biofuel that others have been making in quantity for decades. This politically directed investment might have gone to far more useful purposes.

As a closely held firm, Range Fuels doesn’t disclose financial details. But Range technical adviser Bud Klepper told Georgia Public Broadcasting last month that the company would create only one batch of cellulosic ethanol of unspecified size—then shut the Georgia plant and lay off all but four employees as it seeks to raise still more money and work through some technical issues. A Range Fuels spokesman didn’t return calls seeking more details.

As for current Range CEO Mr. Aldous, he’s blaming this failure on—brace yourself—Washington’s failure to impose a tax on carbon via cap and trade. “The critical issue is really that there’s no mechanism to price carbon today,” he told a Colorado newspaper. He also blamed “public apathy toward green fuels.”

Apathy? How many other products get the Presidential seal of approval, taxpayer subsidies, forced-purchase mandates and glowing media attention?

As for Mr. Khosla’s other great cellulosic hope, Cello Energy filed for bankruptcy last year. The EPA, which had projected that Cello would create 70 million gallons, has dropped Cello from its list of potential suppliers. More broadly, the EPA last year had no choice but to reduce the government’s 100 million gallon target for 2010 to 6.6 million gallons. It is also fiddling with the definition of what qualifies as a “cellulosic” fuel. Perhaps Newt Gingrich will ask EPA to let corn ethanol make the cut.

If there’s a silver lining here, it is that the folly of this exercise in corporate welfare has been exposed so quickly. There is no excuse now for throwing more money after bad, or to listen to more self-serving pleas from superrich investors who want taxpayers to finance their politically correct attempts to get even richer.

Original Article

In a new article for Foreign Affairs, “Globalizing the Energy Revolution: How to Really Win the Clean-Energy Race” (subscript. req’d), Michael Levi and colleagues at the Council on Foreign Relations argue that the world is “woefully underspending on clean-energy innovation” and needs to pursue a new international strategy:

“Clean energy is almost always more expensive than energy from fossil fuels, and often by a big margin… Yet the world is woefully underspending on clean-energy innovation… the IEA estimated that the world would need to spend an average of $51-$100 billion each year to support the research, development, and demonstration of clean-energy technologies. Current public spending is a mere $10 billion annually… The shortfall is staggering.”

What should be done?  First, the developed world needs to ramp up its efforts. “Major scientific advances are still most likely to occur in the developed world, alongside much of the work necessary to commercialize clean-energy technologies and the capital required to support those efforts,” they write.  U.S. strategy should include two basic element: first, incentives to create a larger domestic market to drive both deployment and indirect innovation; and second, direct government support for clean energy innovation through research, development, and demonstration.

However, in order to “globalize the energy revolution,” the authors argue for a better international approach.  First, the world needs to create a more “open innovation system,” primarily through open investment and trade policies, and avoid protectionist measures that discourage innovation (we recently made a similar argument here):

“Technology advances most rapidly when researchers, firms, and governments build on one another’s successes. When clean-energy investment is seen as a zero-sum game aimed primarily at boosting national competitiveness, however, states often erect barriers. They pursue trade and industrial policies that deter foreigners from participating in the clean-energy sectors of their economies, rather than adopting approaches that accelerate cross-border cooperation. This slows down the very innovation that they are trying to promote at home and simultaneously stifles innovation abroad.”

Unfortunately, “green protectionism” is on the rise.  Although countries like Brazil and India have relatively open approaches, the Chinese government supports aggressive protectionism. For example, according to the authors, forced technology transfer from foreign firms has caused an “unprecedented backlash from foreign companies that do business in China… A hostile environment also makes it politically difficult for Washington to support policies that actively accelerate the spread of clean-energy technology to China.” The U.S. should push strongly for free clean energy trade but without sparking backlash in developing countries that reduces domestic support for clean energy. (Two recent NYT articles discussed these issues in the wind industry, “To Conquer Wind Power, China Writes the Rules” and “China’s Push Into Wind Worries U.S. Industry.”)

Second, beyond creating a more open global innovation system, the U.S. government must actively support advanced energy technology development and diffusion abroad.  The authors propose several ideas, including cross-border demonstration and commercialization projects; stronger export promotion through the U.S. Export-Import Bank and the Overseas Private Investment Corporation; greater support for joint R&D programs like the U.S.-China Clean Energy Research Center; and more.  These efforts would involve substantial public investment, however as the authors note, this approach could be much more politically appealing than proposed alternatives through the UNFCCC:

“Many of these initiatives–particularly those that focus on the more commercial end of the innovation spectrum–could cost a considerable amount. But they would have their benefits–not only in terms of cutting global oil consumption and reducing greenhouse gas emissions but also in helping U.S. clean-energy innovators and companies. And when it comes to climate change, they might present a more attractive alternative to the other options, which tend to involve financial support for clean-energy deployment in the developing world with few strings attached. Money that boosts U.S. clean-energy companies while helping the big emerging economies adopt advanced technologies is likely to be much easier to sell politically than funds that are not tethered explicitly to U.S. economic goals.”

The authors conclude by warning that without such a concerted and enlightened international strategy, all parties will lose:

“The alternative is not a world in which the United States dominates the clean-energy field… It is more likely to be one in which the cost of clean energy does not drop as quickly as needed, particularly in the developing world, and in which massive markets for clean-energy technologies do not materialize. In that case, the United States and the world will both lose.”

Overall, these ideas are a welcome contribution to the unfolding debate.  In the aftermath of cap and trade and binding global emissions agreements, it is clear that the United States and the world must pursue a new strategy for clean energy innovation, which is necessary to drive down to price of clean technologies and enable their affordable deployment (see “Energy Innovation 2010: A New Beginning for U.S. Energy Policy“).  This begins with a new U.S. domestic strategy, which must be extended abroad through a new international technology framework.  Concerns about economic competitiveness in the clean energy race provide a strong motivational factor for domestic policies, but we must guard against protectionism that discourages innovation while actively promoting advanced technology abroad.

Original Article

Two years after bombarding the airwaves, tycoon focuses on natural gas

Oil tycoon T. Boone Pickens’ TV commercials blasted the airwaves in 2008 with his big idea to get America off foreign oil imports: natural gas and wind energy.

Two years later, let’s just make that natural gas.

Since the billionaire’s plans for the world’s largest wind farm fell apart in the Texas Panhandle, Pickens has edited his much-hyped “Pickens Plan” to focus primarily on his other big business interest: natural gas.

Touting 1.7 million Pickens Plan supporters, he’s now pushing Congress to pass legislation that would offer incentives to convert 18-wheelers and fleet vehicles to run on compressed natural gas, or CNG, rather than diesel. He said if just 8 million of those trucks switch to the domestic-produced fuel, it could cut in half the amount of foreign oil imported by the United States.

“I’m all American,” Pickens said on Friday. “Any energy in America beats importing.”

The businessman said he is now looking to Canada as a place to build his 500-megawatt wind farm, because he couldn’t get a deal done in Texas.

Pickens has spent more than two years and $80 million promoting the Pickens Plan, mostly in 2008 with TV spots and social media and traversing the country for town hall meetings, lobbying Congress and visiting the White House.

Special Report: Environmental entrepreneurs

But critics say Pickens is no passive policy advocate and his agenda reflects his own financial interests.

“He stands to make hundreds of millions of dollars,” said Tyson Slocum, director of the energy program for Public Citizen, a consumer advocacy group. “He doesn’t see wind personally as a lucrative investment anymore.”

Pickens owns 45 percent of Clean Energy Fuels, a Seal Beach, Calif., company that builds natural gas filling stations for buses and fleet vehicles. CNG industry executives say natural gas is cleaner, abundant and cheaper than gasoline — as much as 60 cents to $1 less per gallon.

Pickens admits that he may benefit financially but that’s not his main goal. “If that was the case, I shouldn’t have spent $80 million,” he said.  He says that if America is going to stop importing foreign oil, we must focus on transportation.

Much of Pickens’ early media blitz plugged wind. In one 2008 YouTube video, Pickens sketched out a plan on a whiteboard to increase wind energy for power companies, which would then free up natural gas for transportation and reduce overseas oil imports. In another video, he advocated for more wind energy, which would create jobs, finance schools and revitalize rural America.

“It can be done, and it will be done because it has to be done,” he said in the video.

Pickens said he ordered $1.5 billion worth of wind turbines to build the wind farm in Pampa, Texas, but he later abandoned the project because the state didn’t have local transmission lines needed to distribute the energy. Texas should start construction on those local lines next year.

“There’s a certain amount of disappointment,” said Lonny Robbins, Pampa’s mayor. The town of 17,000 had bustled with anticipation following Pickens’ announcement. No other wind project has been built in the town so far.

“That’s the way some things happen sometimes,” said Robbins.

Pickens now says Canada is more appealing because the country has renewable energy standards that require energy companies to buy certain amounts of wind power. Because natural gas prices have dropped, wind looks too expensive for U.S. power companies.

“You’re going to get natural gas prices up, or wind — it just isn’t gonna happen,” Pickens said on Friday.

Even without Pickens’ project, the U.S. wind industry should be just fine. Projects by fellow billionaires Phil Anschutz and Warren Buffett are still moving forward in Wyoming and Iowa. And the overall wind industry had its biggest year in 2009, due in part to new federal cash grants for investments.

In Texas, if you drive four hours south of Pampa to Sweetwater, you will see seven of the top 10 largest wind projects underway, said Greg Wortham, Sweetwater mayor and director of the Texas Wind Energy Clearinghouse. The state is also spending $5 billion on transmission lines.

“You can go 150 miles without losing site of a wind turbine,” said Wortham. “There are lines of blades parked along the highway waiting to go into a wind site under construction.”

The big worry for the industry is Congress, not Pickens, said Wortham. The industry would get a boost if Congress approves President Barack Obama’s bi-partisan tax plan now set for a vote in the Senate. That plan includes energy tax credits to encourage more wind investments, yet industry officials say a more consistent policy is still needed to encourage more long-term investment in the industry.

Pickens is equally frustrated with Washington. He pointed to President Obama’s post-election pledge to end U.S. dependence on imports of Middle East oil within 10 years.

“Two and a half years,” Pickens said. “And there’s no plan.”

Original Article

APPLE VALLEY, Calif. (AP) — Fears that whirling wind turbines could slaughter protected golden eagles have halted progress on a key piece of the federal government’s push to increase renewable energy on public lands, stalling plans for billions of dollars in wind farm developments.

The U.S. Bureau of Land Management suspended issuing wind permits on public land indefinitely this summer after wildlife officials invoked a decades-old law for protecting eagles, according to interviews and documents obtained by The Associated Press.

The restriction has stymied efforts to “fast-track” approvals for four of the seven most promising wind energy proposals in the nation, including all three in California.

Now, these and other projects appear unlikely to make the year-end deadline to potentially qualify for hundreds of millions of dollars in stimulus funds. If extensions aren’t granted in the lame duck session of Congress, the future of many of these plans could be in doubt.

“(Companies) are waiting to know the criteria to get a permit,” said Larry LaPre, a wildlife biologist for BLM’s California desert district, of the companies hoping federal agencies will begin permitting again soon. LaPre said he expects it to be “at least a year or longer” before permitting resumes.

Golden eagles are the latest roadblock to establishing wind farms on federally owned land, already an expensive process plagued by years of bureaucratic delay. The projects also have been untracked by other wildlife issues, a sluggish economy and objections by defense and aviation authorities that wind turbines interfere with the country’s aged radar system.

The delays are occurring despite a target set by Congress in 2005 that directed the Interior Department to approve about 5 million homes worth of renewable energy on public lands by 2015. Since then, only two of the more than 250 currently proposed wind projects have been approved and neither has been built, records and interviews show.

The four fast-track projects in jeopardy of losing stimulus funds due to eagle issues would alone generate about 416 megawatts of clean energy, enough to power roughly a half million U.S. homes during peak usage.

There are presently 28 wind farms operating on public lands, which make up about 13 percent of the U.S. land surface, although records show that more than 800 have been proposed in recent decades.

The vast majority of public lands regulated by the BLM are in western states, where all current onshore wind farms approved or in planning stages will be located. Offshore wind farms, like those proposed off the New England coast, are regulated by a different federal agency.

“It’s a broad challenge to us as a country,” said Nathanael Greene, renewable energy policy director at the National Resources Defense Council. “How do we rapidly deploy the renewable energy technologies and transmission infrastructures to stave off catastrophic climate change and local and regional air pollution that comes with burning fossil fuels? Even the best sited projects have impacts on the landscape.”

The July eagle memo obtained by the AP directed BLM staff not to approve any more permits until companies submit protection plans. Federal officials said they do not know when permitting will resume nor whether the stimulus deadline will be met.

Meanwhile, a group of Democratic lawmakers late Friday urged colleagues in both the House and Senate to support the inclusion of a one-year extension of the stimulus deadline in any tax-package agreement that makes it through this lame-duck session. Still, it was uncertain whether the extension for renewable energy project cash grants would make it into any final bill.

Wind companies estimate the eagle rules are holding up $68 billion in investment, and they complain that they are stalled because the U.S. Fish and Wildlife Service has yet to finalize permit requirements.

“Most BLM projects are being held up as a result of this,” said John Anderson, director of siting policy at the American Wind Energy Association. “It’s definitely a mixed message and an example of one hand not knowing what the other hand is doing.”

Assistant Secretary for Fish and Wildlife Tom Strickland said the department is working on the issue but “has no intention of shortcutting a thorough environmental review process.”

“The fast-track process has meant cutting red tape — not cutting corners,” Strickland wrote in an e-mail to the AP.

For years, wind farms sprouted on privately held land while projects on public lands languished, in part because of the complex federal environmental reviews. Projects on private land are governed by state regulations if a federally protected species does not live there, which can lead to a cheaper and quicker approval process. If a threatened or endangered species is on private land, then federal environmental review is required just like a public site.

The average farm in 2009 had 49 wind turbines with each measuring about 410 feet tall.

The only project approved is the Spring Valley wind farm in Nevada where the nearest eagle nest was over four miles away. Gina Jones, BLM’s project leader, said the company agreed to extensive mitigation, such as putting “anti-perch” devices on transmission poles within two miles of the wind farm.

Among the stalled high-priority projects is RES Americas’ plan for an estimated $148 million project on wind-swept desert in San Bernardino County.

Company biologists spent weeks amid the scrub and Joshua trees studying two pairs of eagles to see if they would be harmed by turbines for the 74 megawatt wind farm — enough to supply more than 75,000 homes yearly. BLM biologist LaPre, who also studied the situation, did not think an avian protection plan was needed but was overruled by other BLM and wildlife officials.

“The eagles were not flying over the site,” LaPre said. “I thought they’d be OK.”

RES now stands to lose an estimated $45 million in federal stimulus funding. “This new regulation to a degree pulls the rug out from under us,” said Scott Piscitello, vice president of development.

The birds are renowned for their flying range, traveling miles to hunt down a jack rabbit. The latest population estimate in 2004 placed the number at about 80,000 in North America. But biologists say the birds have been declining, partly because they were getting killed by wind turbine blades.

While the eagles are found across the country, populations are larger in the West. California’s three priority projects alone are within 10 miles of 21 golden eagle territories, the closest 1,000 feet away.

The wind industry has also been grappling with the Department of Defense, which has objected to proposals that could interfere with aging radar systems. Wind turbines can disrupt aviation and weather radar systems, making planes disappear, creating phantom aircraft and making storms appear when they do not exist.

Since the mid-2000s, about 9,000 megawatts of proposed wind projects were delayed or derailed because of radar issues, according to AWEA, the industry’s trade group. Defense officials say they are trying to work out issues with companies and even posted an online map so companies can see if their proposals are close to radar systems.

These obstacles came as the economy was already dampening investment in renewable energy and making qualification for stimulus funds much more critical. Sarah Rankin, a project coordinator for West Butte Wind and Power, was hoping to get as much as $66 million in stimulus money for a $220 million wind project that has been delayed by the new eagle requirements.

“We’re doing everything we can to move things forward,” said Rankin, whose 104 megawatt wind farm proposal is planned for west of Bend in central Oregon. “Whether or not we’ll qualify for stimulus grant money remains to be seen.”

Dwight Fielder, who heads BLM’s Division of Fish, Wildlife and Plant Conservation, said federal officials are discussing issuing conditional permits to companies working on eagle protection plans, but it’s not clear if this would allow them to make the stimulus funding deadline.

“That,” he said “Is the $64 question.”

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