Quote from BullAlert:
I don't care if he profits or not, I just don't want him using taxpayer funds as seed money. His personal fortune is ample to fund any venture he can dream up. As a matter of fact, if he used his own fortune excusively.....he would not have not share the profits. What a concept. But it is shaping up that Pickens does not possess that level of risk-taking; it sure feels a lot more comfortable knowing the federal government is sharing the risk.
This post shows how little you seem to know about the energy situation generally, or wind power specifically. Or for that matter, Boone Pickens.
Lets start with Pickens. As of last year, Pickens was worth an estimated $3 Billion. To put this into perspective though, recently, he bought 667 wind turbines from GE. The cost was $2 Billion. With those turbines he is building a large wind farm on the Texas Panhandle, the cost of which ultimately may be something like $12 Billion. So when you start to use terms like "taxpayer funds as seed money", you start to show you really haven't done your homework. Here's a link to help you out:
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20080602&id=8716988
Next, as with most renewable energy investments, the federally government gives a tax credit. That tax credit amount to 2 cents per kilowatt hour. This tax credit is about to expire. Pickens has made his investment without knowing whether this tax credit will in fact be renewed. Presumably it will be.
The government isn't just subsidizing Pickens. It subsidizes virtually anyone who does anything with alternative energy. If it's solar there's a credit, etc etc. In fact, you may be familiar with the tax credit for ethanol. The only way ethanol could be brought to market was with tax subsidies. So I guess what your point is is that you would like to subsidize ethanol, but not wind. Is that it? Or you just would like to disqualify Pickens from being eligible for a tax credit?
The US tax code currently creates provisions for all kinds of activities. For instance, we give a favored treatment for trading commodity futures. We pay famers a subsidy not to grow crops. We have depletion allowances, investment tax credits, etc etc etc.
But in this case, there are large upfront investments required, which due to a variety of uncertainties, might not be attractive unless the government provided incentives. Most of the alternative energy forms fall into this category.
In terms of wind though, there are other complications such as the need for transmission lines to get your power "downstream". Pickens has said he is going to pay for his. But this type of investment is going to be necessary to use wind in a large scale, since most of the wind would come from the midwest corridor.
http://blogs.wsj.com/environmentalc...-asks-feds-to-help-distribute-his-wind-power/
Meanwhile, this country clamors about the need for "green power". We don't want to drill off our coasts. And yet, we spend $700 Billion on imported oil per year. But you don't want to encourage wind power because Pickens might benefit? Even though he's just spend his net worth on wind turbines? And eventhough the tax credit for wind has been in existence prior to his investment?
OldTrader
