BP to become Colorado's top wind power producer
BYLINE: Gargi Chakrabarty, Rocky Mountain News
Global energy behemoth BP is emerging as the energy giant of Colorado.
From being the state's No. 1 natural gas producer for years, BP now is on track to become its top wind power producer.
BP's foray into the local wind industry came about recently when it bought Greenlight Energy, a Virginia company that is developing a 300-megawatt wind farm east of Grover, near Greeley.
The Cedar Creek wind farm will be the biggest in the state, with 274 turbines capable of providing electricity to 120,000 customers. BP intends to break ground at the 32,000-acre leased site this fall, said Jack Rigg, BP's regional manager of government and public affairs.
Rigg declined to reveal BP's investment in the wind farm but said Cedar Creek is among the five U.S. wind projects the company plans to build this year. And that is part of BP's overall strategy to spend $8 billion on renewable energy in the next few years.
BP's wind energy investment here is on top of its continued focus to increase natural gas production in the San Juan basin. Weeks ago, the company announced plans to invest $2.4 billion in La Plata County over the next 13 years to accelerate oil and gas production in the southwestern corner of the state.
"There is a lot of energy resource in Colorado - wind in the eastern plains and natural gas throughout the Rockies," Rigg said. "Both investment in natural gas and wind will support economic development in southwestern and northeastern Colorado respectively."
"This is definitely a win-win situation for both the state, local communities and BP as an investor," Rigg added.
He said the new investments are in keeping with the company's philosophy to move from higher carbon energy (such as animal dung or wood chips) many years ago, to coal and oil in recent years, to lower carbon energy (such as natural gas) and finally to extremely low carbon energy from renewable sources (such as wind or the sun).
"BP is investing in a variety of places in Colorado, including Weld County and La Plata County, that are diverse places, and we are encouraged by that," said Jeff Holwell, director of business development at the Colorado Office of Economic Development. "Business investments generally result in jobs and potential wealth for future generations, so we see BP's investment as a positive thing."
BP is partnering with Babcock & Brown Operating Partners to build the Cedar Creek wind farm. The project has a long-term supply contract with Xcel Energy, Colorado's biggest utility. Xcel will buy the electricity to comply with renewable energy standards approved by Colorado voters in November 2005.
The mandate, Amendment 37, requires the state's top utilities including Xcel to get 10 percent of their electricity from renewable sources such as the sun, wind, and plant and animal waste by 2015. That standard, however, is set to double this year with House Bill 1281.
The bill has passed the House and Senate and is awaiting Gov. Bill Ritter's signature.
Meanwhile, BP has approval to drill 700 wells over the next few years in La Plata County in the northern portion of the San Juan basin.
The company produces 900 million cubic feet of gas per day in the San Juan basin, accounting for about 1.5 percent of U.S. domestic gas production. Two-thirds of that, or 625 million cubic feet a day, is produced in La Plata County, Rigg said. Oil and gas companies pay two-thirds of the county's property tax.
Rival EnCana produces 430 million cubic feet a day in the Piceance basin, straddling most of Garfield and Rio Blanco counties.
Josh Joswick of the San Juan Citizens Alliance said BP's rapid expansion and its impact on the environment is a concern because natural gas in the San Juan basin is trapped between coal seams and extracting it is not easy.
"The main concern is the threat of gas seeps and coal seam fires that could result from their operations," Joswick said, adding the gas fields are not too far from Durango. "And then, there's the continued impact to water aquifers and larger footprints on the land."