Oil’s Rise Is Fueling the Wind Plays

Every day that oil goes up, there is a new set of technologies that had formerly been priced out of the market that comes back to life. Let’s take wind. Wind, in itself, just seems so stupid. It needs, well, wind. Much of our country doesn’t have enough wind to make this economic. There are only certain regions that can really benefit.

But when oil is at $130, SO WHAT! The parts of the country that have a lot of wind are nuts not to do wind. Wind, when properly integrated into the grid, costs 4 cents a kilowatt. The issue has been shortage of everything that goes into a windmill, because nobody in the chain thought it was worthwhile to mass-produce them. So even though the cost is low, no companies felt it was worth it because the market seemed so niche.
In other words, it was the wind supply chain that was the problem, because we only thought in terms of gigantic plants that created energy. But with nuclear not an option — never will be in this country, if you ask me — natural gas falling out of favor post-Katrina as being unreliable, and coal simply intolerable because of the climate problems, wind has become the most natural fuel of all.

But think about all of the things that had to go right before the investment: The technology had to be refined to be sure that the blades were big enough to matter, the turbines and steel towers had to be mass-manufactured, the transmission into the grid had to be refined, and the companies that got into it had to be sure that oil was high enough to sink the cost into the manufacturing of turbines.

All of this had to happen. Anything goes at $130 a barrel.

The Street