2 Ways to Invest in Pickens’ Wind Power Plan

By Jennifer Yousfi

He made his fortune as an oilman, but Tuesday, legendary investor T. Boone Pickens unveiled a plan to cut U.S. dependence on foreign oil through the power of alternatives such as wind and natural gas.

“We’re paying $700 billion a year for foreign oil. It’s breaking us as a nation, and I want to elevate that question to the presidential debate, to make it the No. 1 issue of the campaign this year,” Pickens said, USA Today reported.

Pickens launched a Website titled “Pickens Plan,” which went live Tuesday, to outline what he calls a “bridge to the future” to help cut foreign oil imports by focusing on wind-generated power and natural-gas burning autos. 

And Pickens isn’t being shy about taking his plan to the politicians.

“Neither presidential candidate is talking about solving the oil problem. So we’re going to make ‘em talk about it,” Pickens said.

“Nixon said in 1970 that we were importing 20% of our oil and that by 1980 it would be 0%. That didn’t happen,” Pickens added. “It went to 42% in 1991 with the Gulf War. It’s just under 70% now. Where do you think we’re going to be in 10 years when our economy is busted and we’re importing 80% of our oil?”

Pickens’ plan aims to cut down on oil imports in a two-prong strategy. First, he recommends the construction of wind power plants to free up natural gas that is currently being used to generate 22% of the United States power supply. That natural gas can then be used to power cleaner-burning automobiles.

Pickens’ Wind Power Project

Wind power could supply up to 20% of the United States’ energy requirements, according to Pickens. Calling the Great Plains region of the United States the “Saudi Arabia of wind,” the former oil tycoon has already started an eventual $10 billion alternative energy project that has the potential to become the world’s largest wind farm in the Texas panhandle.

Picken’s Mesa Power LLP plans to purchase 667 wind turbines from General Electric Co. (GE). Each turbine can produce 1.5 megawatts of electricity. The first phase of the project, currently under construction, will produce 1,000 megawatts, enough energy to power 300,000 homes. GE will begin delivering the turbines in 2010, and current plans call for the project to start producing power in 2011.

Ultimately, Mesa Power plans to have enough turbines to produce 4,000 megawatts of energy. Overall, the Pampa project is expected to cost $10 billion and be completed in 2014.

As an investor, if you’re looking to cash in on Pickens’ wind-power mandate, the manufacturers of wind turbines might be a good choice. Two of the largest include the aforementioned GE and Siemens AG (SI). GE has already received a $2 billion order from Pickens and expects another $6 billion in orders from the planned 4,000 MW Pampa project alone.  Siemens will supply the turbines for a 500 MW wind farm planned in the United Kingdom.

Comments

[Zenfar:]

Of course you could also invest directly in Picken's companies like CLNE.

2008 Jul 09 09:14 AM

[lemming:]

well you could do CLNE or you could take invest in BP capital for 5 million if you really like pickens

2008 Jul 09 09:49 AM

[UpNAmpd:]

or EXCO

2008 Jul 09 10:14 AM

[Ozarker:]

You can keep your SUV's, pick-ups and other gas guzzlers by converting them to Natural gas which is mostly Hydrogen and in some cities the exhaust would be cleaner than the air it took in to combust. We have anywhere from a 60 to 300 year supply, depending on the source, and it's all right here in the beautiful U S of A, and it costs 1/3 to 1/2 as much as gasoline. There is a company named Fuelmaker in Canada, which makes a gas compressor, the size of an old pay phone, that fits on your garage wall and fills your vehicle up over night. You can then go approximately 200miles (Honda Civic NGV) the next day before you need to fill up again. I can't figure out why we don't have huge tax incentives for this conversion. As Larry the Cable Guy would say "We need to Gitter Done!"

2008 Jul 09 10:50 AM

[johnhaskell:]

Ozarker- if your proposal costs 1/3 as much as gasoline why do we need huge tax incentives to do it?

I guess Fuelmaker shareholders could probably offer a guess.

2008 Jul 09 11:45 AM

[Piggybank:]

I would rather advice Vestas and gamesa as turbine manufactureres rather than GE and SI, as the first 2 are pure play, and the last 2 bellwethers with weight bringing them somewhat down. All have great growth prospects for their turbine manucaturing opperations, indeed energy independance is needed, and wind power provides a very interresting alternative at this point, that is for as far as the manufacturers can produce enough windmills to meet demand, their output is gennerally sold out for yers and contracts are still streaming in.

2008 Jul 09 11:54 AM

[lemming:]

why PWND and not FAN?

2008 Jul 09 11:58 AM

[Obvious Adam:]

PWND is a 90% pure play, and FAN is 66%. It really just depends on how pure you want to go. I, personally, like the Powershares management, not to take anything away from First Trust. The other major difference would be the total number of companies in the portfolios. PWND has 31 (to start) and FAN has 67. There does seem to be overlap, but PWND at the moment seems to want more of the pure plays. Both are little off of their inception price, but then again many of the clean energy plays (like the rest of the market) are down.

2008 Jul 09 02:44 PM

[User 176952:]

Also check out Suzlon.
Q: Is there 1 Turbine Manufacturer better than the other or is it better to get into ETF's like PWND or FAN ?

2008 Jul 09 03:10 PM

[PA:]

I think FSYS will bebefit greatly from Pickens plan.

The Holy Grail: U.S. Adoption Of Natural Gas Fueled Vehicles
– The number of gaseous fueled vehicles has been growing at a 23%
rate since 2000, but it’s not obvious to U.S. investors because the
growth has been almost entirely outside of this country. However,
we believe the U.S. is now at the tipping point of increased adoption
of gaseous fueled vehicles driven by high oil prices, political desires
for a domestic energy solution, and increasingly stringent worldwide
emission standards. We believe a number of catalysts are on the
horizon to spur the U.S. market, the largest being a ballot initiative
this November in California that would create a $2.9 billion fund to
provide incentives for alternative fueled vehicles.

2008 Jul 09 11:54 PM

[AJ30:]

Does anyone know what it costs to convert a standard Chevy or Ford sedan to Natural Gas?

2008 Jul 10 05:07 PM

[Stockguy456:]

Pickens’ has stated that this is a short term thing until hydrogen
long bldp, plug, satc, hygs,fcel

2008 Jul 11 09:16 AM

[petersterling:]

It used to cost $500 20 years ago. It is about one days work for a mechanic. Now I believe its about $2,500. CNG could provide 25% of US transportaion fuels for 50-100 years. And its a clean fuel.

My company has 2 super-giant undeveloped offshore clean natural gas resources, which together on their own could probably supply the required amount of gas.

The incentives idea is a great way to kick-start the change.

2008 Jul 12 08:18 PM

[User 424831:]

Any thoughts on how a small investor with land where solar panels and wind turbines would work can develop a project individually or with a partner?

Jun 03 09:19 AM