Story Photos
 Port of Longview dockworkers unload wind turbine propellers this month. Bill Wagner / The Daily News
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Volatile nature of turbine imports creates boom/bust conditions for port profits
Sunday, August 31, 2008 1:33 PM PDT
By Erik Olson
Printable version
E-mail this articleThe giant ships unloading giant wind turbines and towers at the Port of Longview are rapidly becoming a giant piece of the port's business portfolio.
In fact, the renewable energy of the future is taking the place of another once mighty giant, the log export business, whose fortunes have fallen in recent years.
"It has replaced, to a large extent, the revenue associated with log exports," said Ken O'Hollaren, director of the Port of Longview. "It has filled that gap nicely."
But how long the wind-generated cash flow will keep blowing through the port is unclear. The uncertain future of a key tax incentive is leaving foreign manufacturers wary, while domestic manufacturing is on the rise.
Nevertheless, port officials think the import business will be stable for years to come.
Over the last five years, the Port of Longview has emerged as a leading Northwest handler of wind-energy equipment made in Denmark and Germany and bound for the windy plains of the rural west.
The business has evolved from a couple ships to a crowded stream of vessels, prompting the port to set aside 50 acres of land on which the unloaded turbines await transport. The port expects to see 40 vessels and more than 3,000 tower sections and turbine parts this year — more than 1,300 percent growth from 2003.
Contrast that growth with the plummeting exports of logs to Asian markets. In 1990, when timber was booming, the port loaded 130 vessels carrying 356 million board feet. Last year, the numbers fell to six ships and 11.4 million board feet.
Wind energy has brought in $2.7 million to the port this year, more than a quarter of the port's revenue through July. About $1.5 million of that went to longshore wages for handling the cargo — the equivalent of about 30 longshoremen at base pay.
But wind energy has been a boom-or-bust business nationwide over the last decade, hinging on the fate of a key federal tax incentive set to expire at the end of the year.
Congress has allowed that tax credit, which cuts millions off the construction price of a wind farm, to expire three times since 1999, and the consequence has been a free fall in wind energy production.
"If (developers) don't know what the price is, they can't put together the package they need," said Valerie Harris, Port of Longview's marketing director.
The incentive was approved each time after it expired, resulting in meteoric growth in the business as developers scrambled to install towers and turbines. After fueling three years of growth, the credit is set to expire Dec. 31.
Wind-energy backers and lawmakers — including U.S. Rep. Brian Baird and U.S. Sen. Maria Cantwell, both Washington Democrats — are seeking an extension for as long as five years.
The production tax credit saved Cowlitz PUD millions of dollars when it partnered with three other utilities to build the $360 million White Creek wind farm in Klickitat County. The credit's impending sunset date also has sent PUD officials scrambling to move forward with the next phase, Harvest Wind, which the utility approved last week.
The Port of Longview started aggressively marketing its wind-energy capabilities in 2005, with the idea of developing a strong customer base to ride out market fluctuations, Harris said. Other developments, such as the recent purchase of the port's $4.7 million mobile harbor crane, are geared toward attracting wind-energy shippers to the port, she said.
"We have to continue to reinvent ourselves," she said.
Wind power does have its drawbacks, which could impact the amount of wind equipment shipped through the port. It's become more expensive over the past five years, and wind farms don't generate to capacity on calm, still days, said John Harrison, spokesman for the Portland-based Northwest Power Council.
"When the wind stops blowing, the power stops flowing," Harris said. "Wind power is a great resource but poses some great challenges."
Most wind farms generate about 15 percent of their total capacity of power, and that power comes in bunches on windy days, Harris said. That means utilities must adjust to greater ebbs and flows in the power supply, he said.
Access to the power is another potential problem. As more energy is produced in rural, remote areas, some energy experts question whether the nation's transmission line system can handle the increased load in the long term, especially in the more densely populated East Coast, according to a recent story in The New York Times.
In the Pacific Northwest, the federal Bonneville Power Administration estimates its regional transmission lines can handle only about a third of the anticipated new wind power, according to The Oregonian newspaper.
But in the near future, wind will still be in high demand. Utilities in Oregon and Washington are scrambling to meet state deadlines in the next decade for renewable power generation. The U.S. Department of Energy in May declared an ambitious goal of 20 percent of nationwide electricity coming from wind power by 2030.
To achieve that mark, the wind-energy industry would have to more than triple its production over the next two decades, installing more than 75,000 new turbines nationwide, according to the American Wind Energy Association.
An increasing amount of that equipment is being made domestically. Thirteen new manufacturing facilities were planning to open in 2007 to add to the 36 already in operation across the country, according to the wind energy group.
That trend could cut into the demand for foreign-made equipment to pass through the Port of Longview. O'Hollaren, the port director, said that will affect business, but the port has built a strong reputation for handling large wind-energy equipment, whether it's coming or going.
Longshoremen at the port recently loaded wind-energy components manufactured in North Dakota onto a vessel headed for Australia.
"I think there's enough growth here to accommodate exports as well as imports," O'Hollaren said.
Despite the uncertainties, port officials see a bright future for wind energy.
While she was recruiting companies in Denmark and Germany to ship through Longview, Harris said she saw the slow, rotating blades of wind turbines everywhere she looked. Along the hillside and outside villages, wind mills were a part of the landscape.
"We are still in infancy. We've got some catching up to do," Harris said.
cw wrote on Aug 31, 2008 8:29 AM:
MOLE wrote on Aug 31, 2008 9:48 AM:
DUH wrote on Aug 31, 2008 10:03 AM:
Rural Citizen wrote on Aug 31, 2008 10:08 AM:
So how about it? Are we going to sit back and let the energy companies who have sucked us dry for 100 years build the infrastructure to soak us another 100 years or are we going to own our own source of energy?
I want solar panels. What say you? "
Rural Citizen wrote on Aug 31, 2008 10:09 AM:
Our own Cowlits PUBLIC Utility Department.
Yeah. Public. Right. "
DADDYO45 wrote on Aug 31, 2008 10:17 AM:
China already owns the toy companies. They call it slave labor. You know that great one party system of government. This is not at all shocking. The Chrysler Building building was sold. Anyone ever heard of the Dubai buying our ports? Then again what is the difference. If the two party system doesn't protect us??? What are we supposed to do? "
local yokel wrote on Aug 31, 2008 12:41 PM:
mole wrote on Aug 31, 2008 4:14 PM:
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