Oil veteran Boone Pickens makes $2bn gamble on wind farm in Texas

One of America's most famous oilmen has made a dramatic $2bn bet on wind power, an alternative energy he says has the power to replace dwindling oil reserves.

Boone Pickens, who began exploring for oil in Texas more than 50 years ago and now runs hedge funds investing in energy, ordered 667 wind turbines for what will become the biggest wind farm in the world.

His Texan business, Mesa Power, said yesterday that the $2bn order was just the first investment in a project that will eventually produce 4,000 megawatts of electricity, enough to power 1.3 million US homes.

"The development of alternative energy projects, especially renewable resources such as wind power, is critical for the future of the country in the face of declining world oil resources," Mr Pickens said. "You find an oilfield, it peaks and starts declining, and you've got to find another one to replace it. It can drive you crazy. With wind, there's no decline curve."

The Pampa Wind Project will scatter more than 2,500 turbines over 400,000 acres in the Texas Panhandle, where vast open land and high winds are attracting the development of huge wind farms. Royal Dutch Shell is also planning a 3,000-megawatt wind farm in the state.

Federal tax credits have made the project economically viable, Mr Pickens said. Further turbine purchases and building transmission lines to deliver the electricity to the Texan grid will push the cost of the project to about $10bn.

The turbines ordered yesterday will be delivered by their manufacturer, General Electric, by 2011. "As America's demand for energy escalates, it is clear that wind can and will play a bigger part in meeting that need," said Jeff Immelt, GE chief executive.