I’m a big fan of wind turbines. As I’m often driving around in prime wind country doing geodashing I’ve seen many wind farms and have noticed their steady increase. I’ve also watched an anti-wind documentary (from leftie POV, not fossil fuel lovers’ POV) and I could understand how people near a turbine don’t like them, especially as only the landowner where the turbine is gets money (unlike oil and gas where it gets shared with property owner adjacent wells). And, of course, I now have a direct interest in that I’m inheriting a ranch in Oklahoma that has a wind turbine on it and soon will be getting checks from it. And many farmers and ranchers around here are realizing the revenue potential. Unlike oil wells (which I also have on my property) the wind turbines don’t seem to bother cattle, plus they have a small footprint and so don’t interfere with farming. OTOH, oil wells (like mine) can produce a toxic surrounding (bad for cattle and crops) and also frequently have accidents (a tank on my well caught fire once and almost burned everything; then the damage from the fire caused leaks that weren’t entirely caught by the gravel berm around the well).
Anyway what I learned on my recent trip, however, exposed me to a new issue. Most wind turbines are relatively new, but like any piece of machinery they will wear out. THEN what! Like much of the energy play there are a lot of middlemen involved in producing energy. Many of them are playing tax games and all of them use a lot of leverage (debt). So it’s not uncommon for one of the middleman somewhere in the power structure ends up going broke. And that’s what I’m facing.
For years I did my mother’s taxes and so have seen the 1099’s from wind company. And it seems every year it’s got some different name on it. I never paid much attention until now. Furthermore when the contract was signed my mother was competent and so I stayed out of it and thus have no clue about any of the terms and conditions. So, now I have to pay attention. The direct owner of my wind turbine is bankrupt (not due to economics, but due to bad management). Furthermore somehow they’re connected to some other company, mostly solar, who is also bankrupt (I think that company buys and distributes the electricity). So who’s responsible for the wind turbine? It was running when I was there last week – who was operating it and where was the power going? It’s a mystery.
My concern is with bankrupt operating company what happens if the wind turbine breaks (which it certainly can without some routine maintenance). But worse, eventually it will wear out! Then what? In case you’ve never seen one of these things they are huge. Around here, driving the freeways, I almost always seen parts of the tower (shipped in pieces) or the blades (shipped as one piece) clogging up interstates. Drive past one of these components and you really get the sense of their scale. Standing at the base of my wind turbine you really can’t entirely comprehend its size. But it’s a lot of material.
All over farm country you see the much smaller wind mills used to pump underground water for animals. Many of those are in disrepair. But they just gradually fall apart. The tower is mostly steel and it will just rust away. So while it takes quite a while for them to disintegrate eventually they’re just a pile of rubble and even that will just go away.
But what happens if a wind turbine begins to fall apart? If the company that owns it is broke who will pay to dismantle the thing. These things are way too large to just stand by and watch them collapse. Having one of those fall on you or your house or anywhere on your property is going to do some serious damage. The thing needs to be carefully dismantled.
So while tax gimmicks and junk bond financing is paying to build the things what is going to pay to dismantle them. And what happens to the debris, how is it transported and recycled or discarded. Already on my land the road the wind company built to bring in the construction equipment and now the maintenance equipment is slowly falling into disrepair. Another few decades and it will just be a double track, not suitable for heavy machinery. So the work to dismantle the thing is going to require much of the same construction activity (including the huge crane). And that’s not going to be cheap, so where will the money come from to do that.
Supposedly the answer is that the original builder had to put aside money to do this, in a bond. But, did they really allocate enough (or just some pittance to make some regulator happy). Is the bond itself secure (or the money from that got invested in some of Wall Street’s toxic securities that end up worthless)? And what about inflation? Tearing them down in 30-50 years is probably going to cost far more than it cost to build them. So is there really enough money in some safe reserve? I doubt it?
I do know, in Wyoming, that the same issue exists with the coal mines. Unlike West Virginia and Kentucky (even bigger problem since they remove an entire mountain top) the Wyoming coal mines are: a) surface mines where restoring the land isn’t too difficult, and, b) the mines are in the middle of nowhere with few people nearby. But any mine disrupts stable geology with the consequence of lots of water pollution, if the land isn’t properly recovered. So even in nowhere Wyoming an abandoned coal mine will destroy the water for the ranchers and their cattle. So, of course, coal companies were required to post a bond for reclamation. But then along came Dumbya, who decided it wasn’t necessary for the bond to be real and detached from the coal company – the bond is just a line item (liability) on their balance sheet. But now many of those companies have go into bankruptcy, so exactly what good is their “promise” to do the reclamation? Even if they wanted to, after bankruptcy, is there any money to do it? So now Wyoming is facing having to come up with the money and of course they don’t have it so then they want the (in their view) evil gubmint to provide the money. And of course the Federal government is also heavily in debt – even the Social Security Trust Fund is a myth, just a line on piece of paper based on good faith, with no actual money in a “lockbox”.
So too often we’re mortgaging the future and not really putting any real funds into some safe place to cover these obligations.
So, as now the landowner, I wonder if I could be out hundreds of thousands, maybe even millions to pay to dismantle that wind turbine of a bankrupt company with a bankrupt (or unfunded) bond. And in bankruptcy my claim will just be one of many where debtors get haircuts, so can the wind company only pay half, or a quarter, or pennies on the dollar?
Now on my land, fortunately the wind turbine is situated where if it just fell over, the debris would just end up on my land. But of course that’s just based on measurement of its size and the area of my land. If it crashes might some of the debris end up on adjoining land and those land owners suing me to clean up the mess, plus damages. Even on my land I have a tenant rancher with his cattle – if the wind turbine kills some of those, do I have a liability to him (it’s my land, my wind turbine, not his fault – seems reasonable he’d be able to blame me).
With nuclear power we rushed into that without thinking about the waste. Now we have nuclear reactors all over the country with ponds (that require maintenance and power, as we learned at Fukushima) filled with very dangerous fuel rods, that will stay dangerous for thousands of years. And we had no plan to do anything with that extremely dangerous waste (which is also a great source material for terrorist to build dirty bomb if there is no money to guard these ponds). So AFTER we built the things we learned some of the consequences and still have no plan to deal with it.
Wind and solar seem far more benign, but what really are their long-term hazards? And who pays the bill? I can only hope that wind turbine will last longer than I will live so I can, as everyone else does, kick the can down the road, and pass on the problem to some future generation. Boy, are our grandchildren and great-grandchildren going to have a bill to pay – we’re mortgaging their entire future with our greed today.