BP wind-energy cash sweeps into West Texas’ oil country
PECOS COUNTY, Texas — Every workday before sunrise, 10 BP workers gather on a West Texas sheep farm for morning calisthenics.
They need loose limbs to manage BP’S 22,000 acres in the oil-rich Permian Basin, where temperatures can soar beyond 110 degrees. The oil giant leases the land from struggling farmers to expand its reach in the energy world.
But there are no oil wells or drilling rigs here.
BP and other energy companies are spending millions to build and operate wind farms in West Texas, helping to transform oil country into one of the nation’s leading hubs for “green”-energy production.
Skylines dominated by nodding pump jacks are increasingly spotted with spinning turbines. Economies tied to the ebb and flow of commodities prices are finding stability in supplying the power grid.
“We’ve been through lots of booms and busts with the oil and gas industry. The oil and gas areas deplete over time,” said Doug May, economic development director for Pecos County in West Texas. “The wind resource here is sustainable. We look at these wind farms as a longterm investment in the future of Pecos County.”
Other parts of Texas also have enough wind to make generating turbines run efficiently, including the region south and west of Corpus Christi.
Recent energy analyses have forecast that renewable fuels — including wind, solar and biofuels — will be the world’s fastest-growing energy source in coming decades. BP’S own outlook predicts that the country’s renewable-energy production will surge 252 percent over the next 20 years.
Wind will lead the pack, forecasts indicate. Wind farms have proliferated across the U.S. over the past decade.
Now they generate about 3 percent of the nation’s electricity and about 7 percent of the state’s, according to the U.S. Energy Information Association.
That’s an incentive for corporations built in the oil patch to launch businesses invested in wind farms, said John Graham, president of BP’S wind-energy division.
“If you look at the energy growth and what the world needs, renewables are the fastest-growing piece of that,” Graham said. “If you want to be exposed to a growing part of the energy mix, then renewables make sense for a company like ours.”
Since it launched in 2005, BP’S wind division has built an average of three turbines a week. Texas has become home to one of every three.
In addition to BP, West Texas has attracted wind farms built by Nextera Energy Resources and American Electric Power.
American Electric Power was among the pioneers of West Texas wind farms. The Columbus, Ohio-based power company built a 100turbine site in Trent in 2001 and also that year acquired a second 107-turbine farm in Iraan.
“West Texas was very suitable for large-scale wind farms — wide open spaces and plenty of land,” American Electric Power spokesman Pat Hemlepp said. “There were fewer siting headaches than other places in the country.”
In addition to the land resources, Texas has become a favorite location for wind-energy producers for the same reason it did for fossil fuels — an attractive regulatory environment and a plenty of fuel. Texas now generates about 10 gigawatts of wind energy, more than all but five countries in the world, said Peter Kelley, spokesman for the American Wind Energy Association.
“It fundamentally comes down to where’s the energy,” Graham said. “Texas has good wind.”
BP spent $1 billion building its four Texas wind farms. Its most recent one, called Sherbino 2, became fully operational in December. Its 60 turbines, 30 miles east of Fort Stockton, operate on an area about half the size of Washington, D.C.
They rise taller than a Boeing 747 standing on its tail. Each weighs more than 10 elephants. And the rotors’ diameters sweep the length of a football field.
Sherbino 2 generates about 150 megawatts of electricity, enough to power about 45,000 homes, according to BP.
The company leases the acreage from 19 landowners, including D.A. Harral, who was trying to rebuild his family’s sheep and cattle ranch after fires killed much of the livestock and damaged his parents’ home.
Harral says the wind business is helping not only his family business, but also the entire Pecos County economy.
In addition to providing income to ranchers who lease their land, the wind farms pay county taxes or fees based on their value, providing a more diversified revenue stream for a community largely bound to petroleum.
“It’s ironic that the oil industry that built the Texas economy is coming back and investing in the renewable industry,” Harral said. “Sooner or later, the oil and gas reserves will dwindle down. The chance that we are having to switch from an oil tax base to renewables is a blessing.”
But transmission and financial challenges are threatening to stifle the Texas wind boom. West Texas wind farms are at the end of the state’s main grid, managed by the Electric Reliability Council of Texas. The Public Utility Commission of Texas has been working on plans to build a more robust network of power lines to bring more wind-generated power to major cities.
But those lines are still two years and nearly $7 billion away.
Meanwhile, the federal tax credit that gives wind power generators 2.2 cents for every kilowatt-hour of energy produced is to expire at year’s end without legislative approval for a renewal.
“If Congress chooses not to renew, there is no hope for the wind industry next year,” Graham said of the tax credit. “Without it, U.S. wind projects aren’t viable.”