T. Boone Pickens Wind Plan Hits a Snag

NEW YORK (CNNMoney.com) -- Billionaire oilman T. Boone Pickens is scaling back his massive Texas wind project, citing a drop in natural gas prices and the tightening credit market.

"The capital markets are problematic for everyone and...may lead us to scale back a bit," Jay Rosser, spokesman for Pickens' company Mesa Power, said in a statement.

On Tuesday, Pickens, who has spend millions promoting his "Pickens Plan" to wean the United States off foreign oil by switching to wind and natural gas, told a utility trade group falling natural gas prices were responsible for the changes, according to a report in The Arizona Republic.

Pickens' wind farm in Texas, known as the Pampa Wind Project, was slated to be the largest wind farm in the world, generating 4,000 megawatts of electricity, enough to power 1.3 million homes.

A spokesman for Pickens said the first phase of the project, 1,000 megawatts of power, is continuing as planned.

The Pickens Plan calls for the country to use wind to generate 20% of its electricity, displacing some of the natural gas that's currently used to generate power. The natural gas, an abundant domestic resource, could then be used to power vehicles, thus reducing oil imports.

But natural gas prices have fallen from over $10 per million British thermal units this summer, shortly after Pickens announced his plan, to current levels of around $6.

The fall in natural gas prices makes switching to wind power a less certain bet, as utilities would be reluctant to replace natural gas with wind now that natural gas prices are so low.

The Pickens spokesman stressed that the billionaire, who made his money in oil exploration and trading, will continue pushing his plan.

"The Pickens Plan campaign is absolutely continuing, and so is the Mesa Power Pampa Wind Project," the spokesman said in a statement.

Pickens has been saying for years that the United States is too dependent on foreign oil, and that oil prices will continue to rise over the long term as demand outstrips supply