Texas Wind: The New Oil. The earth is slowly, but surely, exhausting its resources. Fossil Fuels like coal and

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1 Charles Budney English 138T Friday, April 5, 2013 Texas Wind: The New Oil The earth is slowly, but surely, exhausting its resources. Fossil Fuels like coal and petroleum are undeniably a finite resource. Though, we are constantly discovering new ways to extract these resources, and new sources of them as well, it is only delaying the inevitable. This fact makes it necessary to, in the near future, begin to transition from fossil fuels to renewable energy sources. Luckily for America, there is somebody out there to lead the country into this future. That somebody is the great state of Texas. One hundred twelve years ago, Anthony Lucas struck gold in the small town of Beaumont, Texas. This gold was not like the gold found in California fifty years earlier. This gold was a thick, sticky, black goo. This gold was oil. Over the next forty years, the oil industry swept across Texas like the plague. By 1940, the oil industry was the largest in the state. Since then, there has been no mention of the American oil industry without Texas. Now there is a new gold to be discovered in Texas: wind. T. Boone Pickens, famed oilman, said in 2008, I have the same feelings about wind as I did about the best oil field I 1 ever found. Texas, the birthplace of the American oil industry, has the chance to become 1 Clifford Krauss, "Move Over, Oil, There's Money in Texas Wind," New York Times, February 23, 2008, accessed March 1, 2012,

2 the birthplace of the American oil industry. It has the chance to lead the United States to the promised land that is a renewable energy future. Texas has the largest capacity for wind power in the country. At its full potential, wind could provide the entire consumption 2 of the state almost five times over. Simply having the capacity, unfortunately, doesn t ensure an effective or efficient transition. The technology is expensive, and the wind itself isn t as reliable as coal or oil. The only way to make alternative energies a reality is for average citizens to show legislators and energy companies that they want, and are willing to take part in, change. My goal is to persuade everyday Texans that its in their best interest to actively pursue a transition to wind energy as a major component of the Texas economy. I don t want to persuade them because the earth is running out of resources, and I don t want to persuade them because global warming is bad. I want to persuade them to choose wind because it will lead to long term economic prosperity in Texas and, once again, put Texas at the forefront of the next American energy revolution. When Texans struck oil in the early 1900s, the Texas economy exploded into one the country s largest in a very short window of time. Since that expansion, the economy has seen steady growth along with the rest of the country, but there is nowhere left for oil to take it. With wind, however, Texas has the chance to experience another expansion. As of the end of 2012, Texas has more than twice the wind capacity of any other state, and 2 Texas Comptroller of Public Accounts, The Energy Report, accessed April 4, 2013, EnergyReport.pdf

3 more wind capacity that all but five countries in the world. On top of that, wind capacity is growing at an unparalleled rate in Texas. From 2000 to 2006, Texas added approximately 2,500 megawatts (MW) of wind power. From 2006 to 2012, Texas added almost 10,000 3 MW. Even with all of this expansion, wind still only supplies seven percent of Texas power (approximately 2.7 million homes), and production of new capacity, without intervention, will soon level off at around 1,000 MW per year. The power industry in Texas is dominated by coal and natural gas. So, what barrier is holding Texas back and how can Texas overcome it? The answer is exactly what you d expect it to be: money. Wind energy is expensive. The country just had a recession. Many who lost their jobs still haven t rejoined the workforce. People in Texas don t want to switch to wind power because they have cheaper options. The price of coal and natural gas energy has always been dependent on the supply of the resources. When they re abundant, the energy is cheap. Right now, Texas energy is shifting away from coal and towards natural gas because the price of natural gas has plummeted and the government has made pollution more expensive. 4 So why is wind power expensive? Texas certainly has a lot of wind, and on top of that its free. Unfortunately, because coal, and now natural gas, have always been so cheap, there s never been any reason to develop cheap technology to generate wind energy. If 3 Ibid 4 Forrest Wilder, Coal, an Obituary, Texas Observer, February 15, 2013, accessed April 4, 2013, an obituary/

4 new turbines, transmission lines, and power plants were inexpensive, the entire world would run on wind energy. Since coal and natural gas have become viable energy sources, they ve been in demand so energy companies have quickly innovated to drive down the costs of extracting, refining, and converting them. But because there s never been a high demand for wind energy, that innovation never took place in the wind energy industry. So now the power lies entirely with the people of Texas. As soon as the public comes out and says, We want to get our energy from wind, energy companies will listen and the government will listen. The Texas government offers a variety of tax exemptions and credits for manufacturers of wind power generating machinery and the companies that use it. Still, without the demand from the public, the government can t offer greater incentive. Because natural gas and coal are currently in demand, the government gives massive incentives to energy companies using them to increase the efficiency of extracting, refining, and converting them into energy. These incentives do decrease costs, but only to a point. There will always be a finite supply of these resources so there is always a cost to extract them. As the supply decreases, that price will only rise. Wind has none of those problems. Because the wind energy industry is almost entirely capital based, innovation can drive prices drastically. Every dollar less expensive a turbine becomes is one dollar less the firm has to pay because they don t have to deal with resource costs. As these savings multiply they will be quickly passed on to the consumers.

5 However much the price of the technology decreases is how much the consumer cost will decrease. If the government would give the same benefits to wind energy producers that they do to natural gas, these savings can become a reality, and the price of using wind energy will quickly fall below that of coal and natural gas. In the end, it will always come down to the will of the people to enact a change of this magnitude. Why the people should want this change is next. Since the oil boom, Texas has become one of the nations largest economies, and the two are absolutely related. The economic impact of the oil boom went far beyond providing a new, cheap source of efficient energy. The rise of oil created a ripple effect that was felt throughout the state. The entire Texas economy underwent a drastic change. This is one situation where the phrase, post hoc ergo propter hoc is absolutely applicable. Everything that happened after the oil boom happened because of the oil boom. A rise in wind energy can provide that same kind of boost to the Texas Economy and even add some additional perks that coal and natural gas can never equal. The biggest area the Texas oil boom impacted was in the jobs market. After the discovery of oil, people were needed to build and man oil rigs, build and operate power plants, design and build a new motor that ran on oil, build a car that could hold the motor, etc. By 1930, the five major commercial centers of Texas (Houston, Beaumont, Dallas, Fort

6 5 Worth, and El Paso) all grew over 500%. For a city to quintuple its population in thirty years is an incredibly impressive feat. Especially when you consider the fact that New York City s population was growing only 100% over the same time. Wind can have a similar effect, though obviously not on as large of a scale, on the job market as oil did, and with the country s current unemployment situation thats a huge benefit. During the 6 beginning of the oil boom, from , the average unemployment was 4.6%. The current United States unemployment is 7.6%. And there are over 200 million more people in the U.S. today. Wind energy has the potential to create an entirely new supply of jobs. All the manufacturing and installation of turbines, construction of transmission lines, and outfitting of power plants to run on wind energy require massive amounts of labor. In 2007, The U.S. Department of Energy proposed the 20% wind by 2030 plan. The idea is to have 20% of U.S. energy come from wind by the year The job impact of this plan is massive. They projected that if we could get on track to reach that goal, the wind energy industry would provide over 75,000 jobs annually in the wind industry, and support approximately 250,000 jobs indirectly. Over the course of the twenty years, this plan 7 would support a total of five million jobs. That s something that America sorely needs. Supporting the jobs market is one of many economic benefits of the wind industry. 5 Texas Almanac, City Population History from , accessed April 4, 2013, 6 National Bureau of Economic Research, The Measurement and Behavior of Unemployment, 215, accessed April 4, 2013, 7 U.S. Department of Energy, 20% Wind By 2030, 199, accessed April 4, 2013,

7 Another economic benefit that no fossil fuel energy source can provide is the lack of carbon emissions. The current wind U.S. wind capacity avoids 96 million tons of carbon 8 dioxide, or 4% of the current total U.S. carbon dioxide emissions. The U.S. government recently decided that the cost of carbon emission was $21/ton, which scientists say may 9 be less than it truly is. Even if we assume that $21/ton is accurate, that still means that wind energy is saving $2 billion every year in carbon emissions. In a time where growing debt and strict environmental policy are major issues, wind energy provides an easy solution for both. Less pollution and billions of dollars in savings are things we can all get behind. America is currently sitting on the edge of a cliff staring out across the future. All of the directions we can choose to go will result in drastically different versions of that future. Texas will be the catalyst that pushes America over the edge. It s up to everyday citizens of Texas to decide which way they will push, and therefore where America will go from here. I believe that wind energy is the option that they should take. Pursuing wind energy as the energy of the future is not only feasible, but it is, in my opinion, our best hope for a prosperous and sustainable future. If Texans will get behind wind energy, the 8 American Wind Energy Association, U.S. Wind Industry Fourth Quarter 2012 Market Report, 1, accessed April 4, 2013, Fourth Quarter Wind Energy Industry Market Report_Executive Summary 4.pdf 9 Joanna Foster, The Social Cost of Carbon: How to Do the Math, Green, entry posted September 18, 2012, social cost of carbon how to do the math/ (accessed April 4, 2013).

8 dominos will begin to fall and wind energy will surpass even the most efficient natural gas and coal energy as the preferred energy source of a new America.