It was an opinion-page editorial that was not warmly received by my employer at the time, Enron Corp. “Wind power poses several major dilemmas,” my Washington Times piece read.
Among them, it remains uneconomical despite heavy subsidies from ratepayers and taxpayers over the last two decades—through 1995 the Department of Energy (DOE) had spent $900 million in wind energy subsidies. Second, wind farms are noisy, land intensive, unsightly, and hazardous to birds, including endangered species.
In response, Ken Karas, chairman & CEO of Enron Wind Corporation, wrote to Tom White, chairman & CEO of Enron Renewables Corporation:
Does Bradley still work for Enron? If so, I believe he should be terminated. This article is pure yellow journalism….
I was not terminated, but I reached a (fair) agreement with Enron CEO Ken Lay that I would stop writing about windpower given the obvious commercial interest and stockholder stake Enron had in this sector. My job was important to me, and I was able to advance my ideals in other ways by remaining an internal voice for free markets and climate realism (versus alarmism).
Here is the Washington Times article reprinted with slight revision by the Michigan-based Mackinac Center for Public Policy. At the (almost) 15-year mark, and as an early windpower ‘expose’, how do the arguments hold up today?
By Robert L. Bradley, Jr., published on Nov. 10, 1997
While antipollution controls are a widely accepted short-term solution to environmental problems posed by fossil fuels, some people believe that the long-term answer is the gradual replacement of fossil fuels with less environmentally threatening fuel sources. Maybe so, but we should look before we leap.
Thousands of high school debaters across the nation are debating renewable energy—power generated from the nearly infinite sunshine, wind, movement of water, internal heat of the earth, and the combustion of replenishable crops. The concept is popular with the public and government officials because it is thought to be an inexhaustible and environmentally benign source of power. Yet all renewable energy sources are not created equal. Some are more economically and environmentally viable than others. The list of renewable fuels that were once promising but are now being questioned on economic and environmental grounds is growing.
Hydropower has lost favor because of the damage it has done to river habitats and freshwater fish populations. Solar power, at least when relied on for central-station electricity generation, is highly uneconomical, land intensive, and at best, a fringe electric power source for the foreseeable future. Geothermal has turned out to be “depletable,” with limited capacity and falling output. Biomass is often uneconomic and also generates its own air pollution.
Among most environmentalists, wind power is currently the favorite source of renewable energy and is thought to be the most likely source to replace fossil fuels for the generation of electricity in the 21st century. But wind power poses several major dilemmas. Among them, it remains uneconomical despite heavy subsidies from ratepayers and taxpayers over the last two decades—through 1995 the Department of Energy (DOE) had spent $900 million in wind energy subsidies. Second, wind farms are noisy, land intensive, unsightly, and hazardous to birds, including endangered species.
It is erroneous to conclude that even if wind power is not competitive now, it soon will be. Wind is competing against improving technologies and the increasing abundance of natural resources as reflected in their generally falling prices. The cost of gas-fired combined-cycle plants—the most economical electricity-generation capacity for central-station power at present—has fallen in the last decade because of improving technology and a 50 percent drop in delivered gas prices adjusted for inflation. The energy-efficiency factors of gas turbines have increased from just above 40 percent in the early 1980s to nearly 60 percent today. Opening the national electricity grid likely will equalize rates across state boundaries and reduce the nation’s 8-cent-per-kWh average residential rate, further reducing the competitiveness of wind power.
Wind power has proven itself to be a perpetual “infant industry,” with its competitive viability always somewhere off on the horizon. Proponents have always argued for continued subsidies on the rationale that commercialization is within sight. In 1985 congressional hearings, for example, an executive of the American Wind Energy Association testified that “the goal for this industry . . . is the lowest-cost source of electricity, along with hydro, available to a utility by 1990.” Meanwhile, the universal rationale for the massive public commitment to wind power is that it is environmentally benign. But wind power has at least one major environmental problem—the killing of bird populations—that has begun to cause serious concern among mainstream environmentalists.
Wind blades have killed thousands of birds in the United States and abroad in the last decade, including endangered species. The Sierra Club and the National Audubon Society have criticized wind power’s effects on birds, but many of their fellow environmentalists have ignored the problem in their devotion to wind power.
The “avian mortality” problem has been widely reported in the wind-power literature (a California Sierra Club official labeled wind towers “the Cuisinarts of the air”). An important article in SF Weekly, a San Francisco newspaper, was written not by a free-market critic but by an author sympathetic to the environmental agenda. It was particularly telling.
The article concerns the world’s largest wind-power farm, the 625 MW Altamont Pass project: “It now appears that windmills are annually killing thousands of birds worldwide [including] . . . red-tailed hawks, American kestrels, turkey vultures, assorted owls—and federally protected species like Aquila chrysaetos, the golden eagle. And it turns out that the Bay Area . . . is the windmill bird-death capital of America.” The 7,000 turbines of Altamont Pass are also responsible for disturbing noise and “visual blight.”
Michigan can learn from the wind-power experience. With electricity expenses in Michigan already above the national average, any new mandates or tax dollars for wind power will further harm the state’s workers and businesses, though perhaps not as severely as the birds unlucky enough to discover them.
Renewable energy sources are worth exploring, but as the experience so far with wind power shows, their merits can be easily overblown.
I’d say your article was spot-on.
I am curious… I’ve often heard that the Enron crew (not the day-to-day employees, mind) were a pretty cutthroat bunch. Your presence there would suggest that they had a (much?) more diverse range of opinions….?
[…] “Are the Merits of Wind Power Overblown?” (1997 op-ed: How does it read today?) — MasterResour…: Wind power has proven itself to be a perpetual “infant industry,” with its competitive viability always somewhere off on the horizon. Proponents have always argued for continued subsidies on the rationale that commercialization is within sight. In 1985 congressional hearings, for example, an executive of the American Wind Energy Association testified that “the goal for this industry . . . is the lowest-cost source of electricity, along with hydro, available to a utility by 1990.” […]
Prescient, to say the least. Once, in Troy, Cassandra warned her fellow citizens not to wheel that wooden horse inside the city gates. Recall that the gods had gifted Cassandra with the ability to foretell the future, only to neutralize that gift by also ensuring that no one would ever believe her.
Otter:
Very good question. Most of Enron was this way, but as other on-the-edge things at the company, softie Ken Lay provided cover. Lay liked me personally, and he was big into contrary voices, political diversity (he had Lefty employees working things for him too).
Enron, remember, like the bad company in an Ayn Rand novel, was (or tried to be) an all-things-to-all-people enterprise. Because the more people that liked us, the more they would buy ENE stock and get others to buy the stock.
ENE was a ‘momentum stock’–or in Objectivist parlance a perception play. Lay was a ‘second hander’ CEO–working a lot from the outside in rather than the inside out.
All this is in chapter 3 of my Capitalism at Work book if you are interested in more.
If I remember correctly, GE ended up with Enron Wind for pennies on the dollar in the bankruptcy liquidation.
Enron Wind’s website remained up and accessible on the internet until at least 2008. It was a big help in convincing some that wind energy was a scam just by providing that link.
Yes, ‘Enron Lives’ in Obama energy policy.