Wind: Kansas' other energy boom

@CNNMoney June 6, 2012: 5:21 AM ET

HARPER COUNTY, Kan. (CNNMoney) -- It's not just oil that's turning Kansas' rural communities into America's latest boomtowns.

Wind turbines are being built right next to oil rigs, bringing an additional rush of jobs and revenue to the small towns along the southern border of the state -- as well as big paychecks to local landowners.

BP Wind Energy is currently building the biggest wind farm in the state, and it plans to begin production by the end of this year. The project has already brought 500 jobs to the three counties its wind turbines span: Harper, Barber and Kingman, according to BP.

These same counties are also filling up with hundreds of oil workers, as big fracking and exploration companies seek to tap the billions of barrels of oil that are estimated to be in the Mississippian limestone formation.

Not only have these two energy forces brought money to the region, but they've also created a housing shortage, a surge in traffic and have worn down local roads.

"[Wind and oil] have collided at the same time here in Harper County," said Al Roder, administrator of Harper County, where the majority of the wind turbines are located. "As a result, all of the good and all of the challenges are getting multiplied."

Economic boost: BP's wind farm, an $800 million investment made up of nearly 300 wind turbines on 66,000 acres, will generate enough electricity to power about 125,000 homes around the country.

BP (BP) has agreed to dole out about $1.2 million per year to the counties where the turbines are located. The payouts will continue for the lifetime of the project, which BP estimates to be at least 25 years.

The wind farms are offering plenty of opportunities to local residents as well. Only about 15 of the 500 employees who have been hired work directly for BP. The rest -- including construction workers, truck drivers, bulldozer and crane operators, welders, electricians and mechanics -- are contract workers, many of which are based in Kansas.

BP won't disclose the average salary of its workers. But Mike Lanie, director of economic development for Harper County, said many of the wind farm jobs in the area are actually paying very similarly to oilfield jobs -- with many truck drivers making more than $100,000 a year with overtime.

The 500 extra wind farm workers won't be permanent, however. Once the farm is completed at the end of the year, the number is likely to dwindle to about 30 workers who will be in charge of monitoring and maintaining the facility.

But while the wind farm is at its peak workforce right now, the oil companies are just getting started, hiring some 500 workers over the past year. And the oil company with the biggest stake in the area right now, SandRidge Energy, says that it expects to be drilling new rigs and hiring workers for at least the next decade.

A windfall for landowners: Even though the wind farm jobs may be fleeting, the industry will continue to have an impact on the landowners who agreed to host wind turbines on their land.

BP wouldn't disclose the details of these contracts, but it said that about 200 landowners will collectively receive about $2 million per year in royalty payments -- averaging about $10,000 a year for each landowner.

However, some landowners are expecting a lot more than that. Leon Zoglman, a 64-year old farmer, is getting 12 wind turbines built on his land this year. In addition to the $3,000 a year he will receive for the use of 1,200 acres of his land until the turbines begin producing energy, he said BP has also paid him more than $20,000 to place a transmission line across a mile and a half of his property. When the turbines start producing energy, he will stop getting the $3,000 payments and instead get royalties from the energy produced from the turbines.

Although Zoglman said he has no idea what kind of production royalties to expect, he's heard that he could get more than $700 a month per turbine. If that were the case, Zoglman could bring in more than $100,000 a year in extra income.

But Zoglman isn't just cashing in one boom: Right next to those wind turbines sits an oil well, which he is also receiving income from, though he didn't want to disclose the amount.

Dean Lauterbach, another landowner who agreed to have more than 10 wind turbines on his property this year, said he initially questioned whether the wind farm would damage his farmland. But after seeing the turbines BP has completed so far, he said there will be a very "minimal amount" of land that he won't be able to farm.

BP said that roads and turbines take up 3% to 5% of the acres it leases, while the remaining surface is still available for farming or ranching.

The downside: As with any boom, however, there are the challenges that come along with the big money.

"The impacts that the wind farm and the oil industry have are very similar -- they're both putting a strain on housing, and they're both bringing more traffic to restaurants but also creating a lot of truck traffic on the roads," said Harper County's Roder.

The lines of trucks driving through town hauling materials to the wind farm or various oil rigs are tearing up the roads and leading to some of the first traffic jams that locals have seen. Meanwhile car accidents and DUIs are on the rise, making it even more dangerous to be on the roads.

Due to the sudden need for construction workers for both the wind farm and the oil industry, some local businesses -- and even the county -- are losing valued employees to these new higher-paying projects -- leaving a gap in the local workforce, said Roder.

"This has put a tremendous strain on the construction segment of the labor force," he said. "Right now everyone is looking for construction, equipment operators, electrical workers -- so if you're looking for work in the construction business, this is a great place to be. Anyone who wants to work, there's work available." To top of page

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