July 17, 2009
Billionaire energy tycoon T. Boone Pickens has a two-step plan to cash in on climate change. Today: step two
In the 1970s and 1980s, T. Boone Pickens made millions as a corporate raider through takeovers of poorly managed corporations. In the process, he became scorned throughout the world.
In the 1990s and 2000s, Pickens upped his take to billions, and this time without suffering public scorn. The former greenmailer became known as an environmentalist and, instead of raiding corporations, he took to raiding government treasuries.
Now he is in the midst of his most ambitious project yet — getting federal and state governments in the United States to sign onto a $1-trillion-plus scheme called the Pickens Plan. Under this plan, designed to combat global warming and achieve energy independence, the United States would use natural gas instead of gasoline to run its cars and trucks. To free up natural gas needed for vehicles, wind power from Texas would replace the natural gas now used to produce electricity. To allow that wind power to leave Texas and serve far-flung electricity markets, the United States would construct an immense north-south electricity transmission corridor that ran from Texas through to Canada.
Pickens bristles when critics accuse him of being self-serving in promoting his Pickens Plan. So what if his 400,000-acre Pampa Wind farm in the Texas Panhandle, the world’s largest, could not get wind power to market without the transmission line he wants government to provide? So what if Pickens remains a major natural-gas developer, and is developing natural-gas vehicles and is the largest builder of natural-gas fuelling stations for vehicles?
“What I’m doing, I’m doing for this country,” Pickens insists. ”I’m doing something I want to do because I think it’s the right thing to do. Let’s get rid of the question that this is some way Boone Pickens is trying to make money. That’s not true.”
Pickens, ranked by Forbes as one of the world’s richest men, is never shy about spending money to make money. In his previous career as an oilman and a corporate raider, he spent money prospecting and on corporate acquisitions. Nowadays, as raider of the public purse, his money goes to prospecting for changes in laws that will give him a leg up on the competition.
To promote the Pickens Plan, he has spent some $60-million in TV, radio and Internet advertising and also got to make his pitch formally to Congress. Last year, in an unsuccessful ballot-box bid to get California taxpayers to subsidize his natural-gas fuelling stations, he spent more than $3-million promoting Proposition 10. To make himself palatable to the Democrats whose support he now needs, he gave up his lifelong support of Republican political campaigns.
More often than not, when he drills for political favours, he gets a gusher. Last week, Senate Majority Leader Harry Reid of Nevada, flanked by Pickens, announced legislation to lower the cost of driving a natural-gas vehicle. Last year, Rahm Emanuel, then-House Democratic Caucus chairman, introduced a bill with tax credits for natural-gas fuel pumps and cars, praising Pickens in the process.
In Texas, where Pickens has accumulated 200,000 acres of land atop the Ogallala Aquifer, making him the largest private owner of water, legislators also obliged: Thanks to the efforts of his lobbyist, he has the right of eminent domain in building a pipeline to carry Ogallala water through the property of neighbouring landowners to metropolitan areas like Dallas. Just one piece of Congressional legislation alone — production tax credits for wind — was estimated to be worth hundreds of millions of dollars to his project.
Pickens suffers setbacks, too — last year’s collapse of oil and gas prices make wind less attractive, for example, dealing a blow to his wind plans. But Pickens has a way of landing on his feet, even when he seems to fail. The punch line to one of his favourite jokes explains why:
A banker called in an oil man to review his loans. “We loaned you $1-million to revive your old wells,” the banker said, “and the wells went dry.” The oil man replied, “Yeah, but it could have been worse.”
“Then we loaned you another $1-million to drill new wells, and they went dry.”
Again, the oil man replied, “it could have been worse.”
“Then we loaned you another $1-million for drilling with some new equipment, and that equipment broke.”
The oil man said “Yeah, but you know, it could have been worse.”
And then the banker got upset. He said, “Listen, I’m getting tired of you saying that. How could it be worse?”
The oil man said: “Hell, it could have been my money.”
Lawrence Solomon is executive director of Energy Probe and Urban Renaissance Institute and author of The Deniers: The world-renowned scientists who stood up against global warming hysteria, political persecution, and fraud.
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