BIG OIL, BIG WIND

Two oil giants plunge into the wind business; Shell, BP intend to play major role
John Donnelly (with Globe staff), March 2, 2007 (The Boston Globe)

- Two of the world's leading oil producers have almost overnight joined some of the biggest players in wind power in the United States, accelerating a trend of large corporations investing in the rapidly growing alternative-energy field…Shell Oil Co. and BP…
- Shell is one of the nation's top five generators of wind power, while BP's Alternative Energy group -- launched 16 months ago -- aims to develop projects that produce 550 megawatts of electricity this year, one-sixth of the projected US wind energy output in 2007…
- The oil companies bring enormous cash reserves, years of experience in large projects, and a can-do spirit to an alternative-fuels industry that has largely been driven by speculators, small developers, and utilities. Though environmentalists largely praise the interests of the two oil giants, they harbor suspicions…

- BP and Shell executives acknowledged that their investments in wind -- and to a lesser extent solar power -- may enhance their public images, but said their primary goal is to make money and reduce their companies' carbon outputs…
- The United States is third in the world in wind power production behind Germany and Spain, the historic leaders, although in 2006 the United States created the most wind power in the world…
- With 41 percent of US carbon dioxide emissions coming from power plants -- coal-fired plants by far produce the most greenhouse gases -- renewable energy must become a larger part of the power mix…
- Some environmentalists oppose wind power, concerned that the clusters of giant turbines used to produce it could threaten birds and bats. They also consider wind farms to be eyesores planted on near-pristine landscapes…
- Tom Natan , research director of the National Environmental Trust , a Washington-based advocacy group, said he believes that wind power's benefits outweigh the negatives and that the involvement of heavyweights such as BP and Shell -- regardless of their motives -- is necessary to accelerate development of wind power…

- In his meetings with BP and Shell -- he traveled to Texas to meet representatives of both companies last month -- [Randall Swisher, executive director of the American Wind Energy Association] said that "sitting in a room with some of these people and talking about where the industry is going, you sense the excitement they have in what they are doing. You can tell they are not doing this for show. They are looking to do a significant amount of business."
- The largest US wind power investor is Florida Power & Light…Other big investors include JPMorgan Chase and Babcock & Brown , and some power companies are creating their own alternative energy units as well as investing in existing ones.
The big issues facing the industry are whether the federal government will extend clean-energy tax credits beyond 2008…and whether Congress will pass a bill to mandate that 15 percent of the nation's power comes from renewable sources such as wind and solar by 2020…larger companies such as BP and Shell are poised to make much larger investments in wind, especially with those incentives…