Wind and Natural Gas Are Priorities on List
Texas billionaire T. Boone Pickens became one of the world’s richest people by drilling for petroleum.
But these days, he’s spearheading a multimillion-dollar push to wean the nation from oil and onto wind power and natural gas.
In the past week, Pickens has talked with the Democratic and Republican leadership on Capitol Hill to gather support for his two main proposals: a $1.2 trillion plan to generate much of the nation’s electricity through a chain of windmills and a federal mandate to shift Americans away from gasoline-fueled cars and into vehicles fueled by natural gas.
At the same time, Pickens’ Clean Energy Fuels Corp. – the country’s largest supplier of natural gas for vehicles – is spending $3.25 million on Proposition 10 on the November ballot in California, which would provide rebates of up to $50,000 for natural-gas powered vehicles and lesser rebates for hybrids.
The 80-year-old Pickens presents his campaign behind Proposition 10 and his national initiative, known as the Pickens Plan, as an altruistic drive to make the nation less dependent on imported oil.
The nation imports $700 billion in foreign oil per year, which Pickens describes as the greatest transfer of wealth in the history of the world. He said he fears that if the United States remains so dependent on foreign oil, it will be at the mercy of the oil-rich nations of the Middle East and other foreign powers.
“This is an emergency,” he said yesterday. “This is like a war. The national economy is at risk here.”
Pickens’ comments were made during a question-and-answer meeting with The San Diego Union-Tribune editorial board, attended by editors and reporters from the newsroom. The board regularly invites newsmakers to discuss current events.
Pickens’ proposals are getting support from across the political spectrum, ranging from environmentalists to Wall Street energy investors.
“To put it plainly, T. Boone Pickens is out to save America,” said Carl Pope of the Sierra Club.
Bruce Zaro, chief technical strategist with Delta Global Advisors, an investment research group in Huntington Beach, said Pickens’ plan “makes a lot of sense. With the price of oil recently running up to nearly $150 per barrel, it really behooves us to diversify away from it.”
But Pickens has his critics as well.
Consumer advocates say that he is putting his money into alternative energy sources that he already has a financial interest in – wind and natural gas – while giving the back seat to energy sources that could be more environmentally friendly, such as solar power and hybrid cars.
“I don’t doubt his patriotic ideals, but a few things about his plan are worrisome,” said Judy Dugan, energy specialist with the liberal-leaning Consumers Watch in Santa Monica. “Natural gas is not a bad idea for public transit or big truck fleets, but if it’s done the way he wants, it would crowd out other technologies such as plug-in hybrid cars and new biofuels. Instead, it would favor technologies that are being developed by a company run by T. Boone Pickens.”
Steven Milloy, a scholar with the conservative Competitive Enterprise Institute in Washington, D.C., accuses Pickens of overstating the threat of foreign oil to gain tax benefits and government help that would benefit his business interests.
“Pickens gives the impression that imported oil is scary because it all comes from the unstable Mideast,” Milloy said, noting that Pickens’ TV ads use images of U.S. troops fighting in Iraq.
In contrast, Milloy said, only 16 percent of the oil that this country imports comes from the Middle East. Most imports come from friendly nations such as Mexico and Canada, the two biggest foreign suppliers of oil to the United States.
Pickens made his fortune selling oil, rising from his one-time career as an oil wildcatter to one of the richest people in the United States. Forbes magazine estimates his net worth of $3 billion, although Pickens has recently said it is closer to $4 billion.
Pickens presides over BP Capital, a hedge fund that has invested heavily in energy companies, and Clean Energy Fuels Corp. (formerly the Pickens Fuel Corp.), a publicly traded company that generated $118 million in revenue by selling natural gas to truck and bus fleets. With the help of federal tax credits and a state-funded power line, he is also building a windmill center in Texas, which can produce up to 4,000 megawatts of electricity, or nearly twice as much the nuclear power plant at San Onofre.
The Pickens Plan proposes building a vast array of windmills in a corridor stretching from Texas to North Dakota. The cost of the windmills, estimated at $1 trillion, would be borne by private investors. But under his plan, the federal government would need to provide land and tax breaks, as well as build a $200 billion network of power lines to transport the electricity.
“The big problem with wind is transmission,” said Michael Shames, who heads San Diego’s Utility Consumers’ Action Network.
San Diego Gas & Electric’s Sunrise Powerlink, a proposed 150-mile power line from Imperial County to San Diego, has been debated for several years with no resolution. Pickens’ proposal would entail thousands of miles of power lines. He envisions the government using the power of eminent domain to seize at least some of the land needed for the power network.
Shames, one of the leading voices against Sunrise, said that even though wind is an important renewable energy source, solar energy could be produced closer to major population centers – particularly in the Sun Belt – without the need for a new network of interstate power lines.
Pickens’ proposal makes little mention of solar energy.
“I haven’t priced out solar,” Pickens said. “I know a little about wind and a lot about oil and gas, but nothing about solar.”
Today, Pickens plans to discuss his plan and Proposition 10 with Gov. Arnold Schwarzenegger. Although he lives in Texas, Pickens has contributed heavily to Schwarzenegger’s campaigns and political causes, including $72,300 to his gubernatorial runs and the recall of his predecessor, Gray Davis. This year, Pickens has given $100,000 to a redistricting referendum backed by the governor.
Pickens has a history of backing Republican causes and contributed heavily to the Swift Boat Veterans for Truth campaign against John Kerry during the 2004 presidential race. But he said his current drive is apolitical.
“I’ve broken off from the Republicans,” he said. “This year, I’ve watched as the candidates of both parties have struggled with the energy question. They didn’t seem to understand it and didn’t have any kind of solution that I agreed with. I feel like I know more about the energy business than anybody else does.”
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T. Boone Pickens
Personal: Born May 22, 1928, in Holdenville, Okla. With a $3 billion net worth, Pickens is the 117th-richest person in the United States and 369th-richest in the world, according to Forbes magazine. Pickens’ wife, Madeleine, closed escrow last year on a $35 million house on the beach in Del Mar, the most expensive home ever sold in San Diego County. She also owns the Del Mar Country Club.
Career: After working as an oil wildcatter in the mid-1950s, Pickens launched a company that evolved into Mesa Petroleum, once one of the world’s largest independent oil companies. He made headlines in the 1980s with his purchase of Pioneer Petroleum and much of Tenneco, as well as his unsuccessful buyout bids of Cities Service, Gulf Oil and Phillips Petroleum. In 1997, he founded the BP Capital hedge fund, which has invested heavily in energy firms such as ExxonMobil and Occidental Petroleum.
Notoriety: Pickens was one of the primary backers of the Swift Boat Veterans for Truth campaign against Sen. John Kerry, the Democratic presidential nominee in 2004. Responding to complaints that the group lied about Kerry’s military service, Pickens has offered to give $1 million to anyone who proved the charges wrong. Although Kerry and his boatmates have offered documents, films and photographs that contradict the group’s claims, Pickens maintains that they have not disproven the ads that he funded.
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Contact the author Dean Calbreath at: (619) 293-1891; [email protected]
