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Billonaire T. Boone Pickens has made a fortune in the oil industry, now he plans to apply his financial skills to the wind power business.  (Source: AP)
Billonaire T. Boone Pickens bets big on wind energy

In a world that has been fossil fuel dependent for decades, many people and companies are finally realizing the financial, social, and environmental benefits of alternative energy and are going green. Alternative-energy is by no means a new idea. Albert Einstein received the Nobel Prize in Physics in the year 1921 "for his services to Theoretical Physics, and especially for his discovery of the law of the photoelectric effect," and in his research he discovered how solar energy to be converted into electricity.

While solar power projects such as adhesive solar panels may be getting the majority of attention, wind power is being put to use for everything from converting salt water into drinking water to generating electricity. This concept of "going green" is so contagious that you might be surprised who decides to join the bandwagon.

Oil billionaire T. Boone Pickens decided to go green by investing in alternative energy. To start out, he’s already bought 667 1.5 megawatt wind turbines from GE and plans to put them in a massive stretch of land in Texas, which could quite possibly enable the wind farm to become the world’s largest, producing power to maintain 1.3 million homes.

Pickens’ project is scheduled to start construction in 2010, spanning the Texas counties of Roberts, Gray, Hemphill and Wheeler. The massive project would encompass 200,000 acres of land and the number of active turbines could be as high as 2,000. Some of the larger turbines will put out around 2.5 megawatts of power each. Keep in mind that that each megawatt can provide energy to 250 Texas homes as stated by American Wind Energy Association’s Susan Williams Sloan.

So why is the Pickens so interested in wind power? He believes wind power to be both stable and available. He states, "The Department of Energy came out with a study in April of '07 that said we could generate 20 percent of our electricity from wind. And the wind power is -- you know, it's clean, it's renewable. It's -- you know, it's everything you want. And it's a stable supply of energy." 

What do the landowners have to say in the matter? Pickens' spokesman Mike Boswell says, "We have entered into a limited number of agreements with a limited number of landowners to put in some test towers." Boswell also states that the deal with the landowners should be finalized by the end of summer.

While it hasn't been built yet, Pickens financial expertise should get his wind farm off the ground and running. This project definitely looks like it's off to an interesting start. Will Pickens be as successful in the alternative energy industry as he was in the oil business? Only time will tell.

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RE: The real benefit...
By BMFPitt on 5/28/2008 3:56:00 PM , Rating: 2
Effective tax rate: 42.38%
I'd like to question how these numbers were arrived at. I know that many forgien nations with oil charge a 90% "tax" on oil exports, which is just another way of saying "you can keep 10% of our oil if you drill it for us."

I agree that a windfall profits tax is as dumb and counterproductive as a gas tax holiday, but I find it incredibly unlikely that U.S. corporate taxes are hitting them for over 40% given my understanding of the business. There's got to be some creative accounting going on to get those numbers.

RE: The real benefit...
By Ringold on 5/28/2008 10:20:09 PM , Rating: 2
Well, revenue is a straightforward definition. Revenue - Expenses = Income, then I divided their tax payout by their income. I'm not an accountant, but that's how calculated it, and it seems proper.

The only place where I can see something strange happening is what they call operating expenses.

The overall figure doesn't shock me, though. The base corporate tax rate is 35%, and decades of manipulation by both lobbyists of industry and lobbyists from various extreme political groups has led to big variations and industry-specific rules. 42% is only 7% above the base rate, a 7% penalty seems low for a firm that has been so hated for so long by so many different people.

Also, I spent time in Google and found people citeing the average tax rate for the entire industry going back several years, as soon as the industry got to be in popular political cross hairs.

Can look for yourself, perhaps someone a little familiar with corporate accounting could explain how they've become so shafted, but just looking over their financial statements 42% appears the proper number, and it seems to jive with everything else in their statements. Given their revenue, their cash flow isn't eye-popping. (Indeed, at the end of the day, they're adding debt) At the very least, I see little evidence of favorable net treatment, which was the point in contention.

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