Page 88 - Forbes - Asia (December 2019 - January 2020)

ENTREPRENEURS
ver his 60-year career Phil Anschutz has owned
oilfields, railroads, fiber-optic networks, tungsten
mines, movie theaters and even a pancake manu-
Ofacturer. He owns the L.A. Kings NHL team, near-
ly a third of the NBA’s Lakers and the Staples Center, where
they both play. He runs the Coachella music festival, the O2
arena in London and the Broadmoor, the historic 784-room
hotel in Colorado Springs. He bankrolled the Chronicles of
Narnia movies and was backing Michael Jackson’s come-
back tour when the pop star died. Anschutz doesn’t just love
unique businesses—he’s obsessed. “My wife calls it a psycho-
sis,” he says with a laugh.
Anschutz has a soft spot for oil, as that’s where he got his
start, and fossil fuels form the basis of his estimated $11.5 bil- over the first ten years) and Anschutz’s costs should drop to 2
lion fortune, placing him at No. 41 on the Forbes 400. Un-
wrapping a fresh box of Swisher Sweets cigarillos, he explains
the favored attributes of the 202,000 hectares his oil com-
pany has been exploring in Wyoming’s Powder River Basin,
where his team has drilled and fracked enough wells to be
convinced they are sitting on more than a billion barrels. This
could yield a bigger payday than the $2.5 billion he made in
2010 selling other oilfields. The best part, he says, is the way
that his land “interfingers” with the holdings of bigger oil
companies, which might like to buy it. He links his fingers to-
gether, half-chewed cigar in hand, to illustrate.
Anschutz, 79, has never been a roughneck. He’s 175cm,
slim and well-coiffed as he explains that his next—and
perhaps last—big investment will not be in oil at all. In-
stead, fossil-fuel king Anschutz is building America’s big-
gest wind farm.
It will cost $5 billion to erect 1,000 turbines at the
Chokecherry and Sierra Madre Wind Energy Project on
Anschutz’s 129,000ha Overland Trail Ranch near Raw-
lins, Wyoming. Plus another $3 billion to construct a
1,200km direct-current transmission line to deliver that
power (enough for 1.8 million homes) to the California
grid. After Anschutz slogged through a decade of per-
mitting, construction is under way. Workers have built
153 kilometers of work roads and prepped 115 pad sites
for the first phase of turbine installation, which could
begin in 2020 and finish in 2025. Anschutz has bank-
rolled the first $400 million out of his own pocket and
is looking for equity partners or to raise debt to finance
the rest. Just don’t expect him to give up control. “I want
to see it built,” he says.
Is he doing this to greenwash his reputation? “No.
We’re doing it to make money.” Though he believes ex-
cess carbon dioxide in the atmosphere “is a problem,”
it’s “not as extreme as some would think.” What’s ex-
treme is California’s new law mandating the transition
to 100% renewable energy by 2045. He intends to
profit from it.
Anschutz says the hardest work is already over. The
permitting process culled a quarter of the planned tur-
84 | FORBES ASIA DECEMBER 2019 / JANUARY 2020
bines—in the windiest area, there will be 157 instead of 325.
The only time he thought about selling the land and walking
away was when the pro-coal factions of the Wyoming legis-
lature succeeded in pushing through a new wind-generation
tax of 0.1 cent per kilowatt hour—the first in the nation. Even
little numbers add up when you plan on putting out 12 bil-
lion kWh per year.
In some ways, the permitting slog was a blessing in disguise.
Over the last decade, turbines have improved in size, power
and efficiency. According to Lazard, the all-in cost of generating
a kilowatt-hour of wind power, without subsidies, has fallen
from 13.5 cents a decade ago to 4.3 cents. Factor in federal re-
newable-energy-investment tax credits (a $2.8 billion value
to 3 cents per kWh. California gets about a third of its energy
from renewables and 40% from fossil fuels. For wind, which
makes up 11% of supply, it’s been paying 3 cents per kWh, ac-
cording to the U.S. Department of Energy. Anschutz’s long-
term bet is that as tax credits expire and California’s 2045 target
date approaches, wind power pricing will go up.
Anschutz has long been familiar with the ferocity of Wyo-
ming winds. Fresh out of college in the early 1960s, he start-
ed working at his father’s Circle A drilling company, which
owned a handful of rigs in the vast, wind-scrubbed lands of
northern Wyoming. It wasn’t long before Anschutz bought
his father out. In 1967, a crew did hit oil but lost control of
BIG WIND
ON A WYOMING RANCH BIGGER THAN SAN FRANCISCO, ANSCHUTZ’S
WIND COMPANY IS BUILDING 1,000 TURBINES THAT WILL BE ALMOST
500 FEET HIGH AND POWER 1.8 MILLION HOMES.
Berkeley
Sausalito
Oakland
City of
San Francisco Alameda
Daly City
OVERLAND TRAIL RANCH
500 SQUARE MILES
San Mateo
PATRICK WELSH FOR FORBES
Redwood City