Economic woes could threaten the Pickens Plan

After spending millions on advertising to promote his radical alternative energy plan, T. Boone Pickens now finds his Pickens Plan imperiled by the same thing that's keeping you up at night: the banking system's current credit crunch.

T. Boone Pickens (Reuters)

CleanTechnica is reporting that Pickens' proposed $10 billion Texas wind farm may not get off the ground if current conditions continue. Two other problems, if you can call them that: Matural gas is actually getting cheaper, and world demand for energy is down.

"Although we are used to hearing about climbing energy costs," Pickens says, "the price of natural gas is actually down. Natural gas accounts for 20% of the nation's electricity generation."

What does that mean?

"I think it is all going to be put off, because we have got the credit crunch, one, but, two, natural gas prices [are down], so you are going to price wind off natural gas power and right now natural gas is so cheap there will be no new wind deals until natural gas price gets back up."

As one energy expert put it, "If crude drifts back down to the $50 to $60 range, it is going to take a lot of the incentive away to shift your energy paradigm." This is certainly a glitch we didn't see coming, having become accustomed to watching energy prices simply rise, rise, and rise again.

Pickens' own energy hedge fund is down 60% on the year. He's certainly not poor, but he's probably not feeling much like a master of the universe at the moment.