lipping on the light switch suddenly carries new meaning in Oklahoma. Led by exploration, research and development, and new project activity in wind, natural gas, petroleum, nitrogen and lithium-ion battery sectors, the state is embarking on a power surge unlike any witnessed on the plains of the South Central United States.
New and established companies are investing millions to turn Oklahoma into a giant laboratory of energy, and those investments are paying dividends.
Devon Energy Corp. is spending US$750 million on a new headquarters in Oklahoma City.
Terra Industries is spending $180 million on a manufacturing expansion of its nitrogen plant in Woodward.
Umicore is spending $45 million to expand its lithium-ion battery materials factory in Quapaw.
This is no accident. Spearheaded by the Department of Commerce, the state is opening its doors to virtually all kinds of energy R&D.
Among the fastest growing sectors in the state is wind power. The state already has more than 700 megawatts of wind generation in operation, with a projected 38,000 MW by 2030. The National Renewable Energy Laboratory estimates that by 2030, Oklahoma will be the second-largest generator of wind power in the U.S.
"Our emerging wind industry will create 18,000 jobs in the next 10 years, generating about $1.5 billion in payroll from wind energy alone," says Natalie Shirley, secretary of the Oklahoma Department of Commerce.
Natalie Shirley, secretary of the Oklahoma Department of Commerce
"In the meantime, we are working hard to train our work force and make sure that our educational component fits exactly the needs of this industry. We are looking at bringing in turbine, nacelle, blade and tower manufacturers."
Shirley says that "it is just natural for Oklahoma to be a leader in the wind sector. We are already huge in aerospace, with Tinker Air Force Base in Oklahoma City, and an American Airlines MRO and Spirit AeroSystems in Tulsa. The science that goes into aerospace is similar to the science and skill set needed in the wind industry. The turbine on top of the wind tower is basically a jet engine; the leading edge of an aircraft wing is a blade. In Oklahoma, we have people who are trained and who can easily move within those two industries."
Richard Clements, manager of economic development for OG&E Electric Services in Oklahoma City, says his company entered the wind energy market in 2003 and has no intention of slowing down. "We leased a portion of a wind farm that was developed and built by Florida Power & Light," he says. "We wanted to take small steps. But when rising fuel costs made wind energy less expensive, that's when the landscape changed dramatically."
OG&E has 170 megawatts of wind capacity but will substantially grow that portfolio in the years ahead. "We have another 102 megawatts being built at the Oklahoma University Spirit Wind Farm, scheduled to be completed in December," Clements says. "We have an RFP that is closed for bid for another 300-megawatt wind farm that will be built over the next two years, and then we will do another 300-megawatt RFP."
Buying the Wind? It's for All
Part of the challenge of becoming a supplier of wind energy is building the infrastructure needed to support it, notes Clements. "We are building a new transmission line from Piedmont to Woodward, about 110 miles [177 km.] long, in northwestern Oklahoma. That is a $220-million investment," he says. "It should be ready by December."
OG&E currently has 170 megawatts of wind farm capacity in the state, and projects under construction and in the RFP process call for 702 more.
In many places around the country, adds Clements, "the areas that have the wind capacity don't have the infrastructure. Our goal is to build a transmission line that is intended to improve the availability and reliability of wind energy in northwestern Oklahoma."
As a regulated utility and wind energy developer, OG&E is strategically locating its wind farms along its own transmission system. "It is deregulated and open to anyone, and you have to go through a fairly lengthy process to get access to the transmission system," Clements says. "But the public is very receptive to wind energy. It is available to all of our customers now and is included in our rate structure. It is viewed as a stabilizing factor. Everyone gets the benefit of wind energy in our system."
Also, he notes, industrial customers may request renewable power sources. "If, as a company, you want to support renewable energy, you can buy renewable energy credits as a way of tying your electric usage to a renewable source," he adds. "Those RECs are available to OG&E customers. A Dell call center in Oklahoma City employs 600 to 700 people and is 100 percent renewable sourced."
Public-Sector Support Changes Private-Sector Intentions
Wind power isn't the only industry energizing economic development in Oklahoma these days. Companies pushing advances in human health are breathing new life into the state economy as well.
Doug McCormack, CEO and co-founder of
OrthoCare Innovations, says that "it was more of a logical choice for us to locate in Oklahoma City than you might think. It was not a shot in the dark."
Doug McCormack, CEO and co-founder of OrthoCare Innovations
A leading research organization in the field of orthotics and prosthetics, OrthoCare recently located its headquarters in the Presbyterian Health Foundation Research Park in Oklahoma City. The park is a 27-acre (10.9-hectare), seven-building, 700,000-sq.-ft. (65,030-sq.-m.) complex that supports biomedical technology.
Some 35 science-based companies call the park home. OrthoCare is one of the latest.
"When we acquired a business that was located in Oklahoma City, it was not our intention to make that our headquarters, but the public support that we were able to garner in Oklahoma really changed that," McCormack says. "The community stepped up to provide direct and tangible support to help us grow our business in the state. As an early-stage company, it made a lot of sense for us. Plus, the basic costs of doing business in Oklahoma are relatively cheap, compared to where we are located in Washington, D.C., and Seattle."
The company is expanding so quickly that "in July, we are moving into a new production facility," adds McCormack. "It is highly subsidized by the Oklahoma Urban Renewal Authority and the Presbyterian Health Foundation. Those are tremendous resources for our company. It has allowed us to avoid having to take on additional debt. The state has also been very supportive. The EDGE [Economic Development Generating Excellence] program, established to help technology-based companies that hold promise for developing jobs and economic growth, was tremendous. OrthoCare was selected as one of five recipients for EDGE funding after more than 100 companies applied for it. I could not imagine this being available to us on the East Coast or in Seattle."
Creating a Place That People Like
OrthoCare will soon move into its 15,000-sq.-ft. (1,394-sq.-m.) production facility, where the firm will employ up to 85 workers. Locating in a cluster of similar companies is a huge benefit as well, the CEO says.
"Oklahoma City has been a global leader in patient care in the field of prosthetic, orthotic and rehabilitative devices," he says. "People from all over the world have come here for care, so there was a good sense of history and experience here in this field."
Oklahoma City Mayor Mick Cornett worked closely with OrthoCare to bring the company to the city. "Just in the last few months, we developed a closing incentive fund that the city is in control of, and we were the first city in the state to do that," the mayor says. "If you want the life-science sector to grow, you have to get the best facilities. You have to attract the best researchers and doctors, and you have to grow organically."
Equally important is building a high quality of life, says Cornett. "People want to live in a city that offers the amenities of a large city but also has a good quality of life. The people with the skills needed by biotech companies can locate wherever they want, and our goal all along was to create a city where people want to live."
One sign of progress, the mayor notes, is the unusually high number of people who are fleeing the West Coast to start a new life in Oklahoma. From 2004 through 2007, more than 29,000 people left California and moved to Oklahoma, according to data from the Internal Revenue Service. Counting the 16,000 who relocated the other way, the state tallied a net in-migration from California of 13,000 residents.
"Some people may still think of
The Grapes of Wrath when they think of Oklahoma, but 'The Wrath of Grapes' is the new story here," Cornett says. "It has validated what I have seen firsthand. People are moving here."
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