T. Boone Pickens.
Just his name conjures images of gushing oil strikes and four-pound steaks. But maybe his name should bring up images of windmills and pork.
First the windmills - that’s his next big investment.
Here’s a couple of key questions and answers from Fast Company’s David Case (questions in bold, answers in normal type, and story can be found HERE):
Listening to all of your environmental ideas, it sounds like you’re the Al Gore of Texas Republicans.
Don’t connect me to Al Gore! A lot of what he says just doesn’t make sense. Texans know I’m environmentally directed in some ways. But I’m realistic about what’s going on. Industry people are comfortable with me. Gore talks about getting rid of the combustion engine. I don’t talk about that.
You recently announced plans to build the world’s largest wind farm, in the panhandle. Is that about money or the environment?
Money! First thing, it’s about money. Of course, I’m also a good environmentalist. I can pass the saliva test. But I’m not going to go do a 4,000-megawatt wind farm for the environment first and money second. I’d rather go give money someplace else. You’re talking about $10 billion.
What kind of return do you expect?
A minimum of 15%. It’ll probably be closer to 25%.
Tell me about the project.
It’s huge, the size of two nuclear plants in output, enough to power a million homes. More than 2,000 turbines, each between 2 and 3 megawatts. The first 1,000 megawatts will be ready by 2011, and 1,000 each year or two after that.
How important is wind to America’s future energy needs?
The United States today runs on 987,000 megawatts, and the demand is going to increase 150,000 megawatts in the next 10 years — 15%. We could supply most of that with wind from the Great Plains, from Texas to North Dakota, but we’ve got to set up corridors to the West Coast and to the East Coast.
So you’re an oil man who’s turning his back on oil?
Foreign oil is costing us $500 billion a year. In 10 years, $5 trillion goes out of the country. It’s nuts. It’s the greatest transfer of wealth from one area to another in the history of the world.
Take a stab at what we’ll be paying at the pump in five years.
Oh hell, that’s so far out. Maybe $6 to $8 a gallon.
Now the pork (with a side of hypocrisy):
What happens if Congress doesn’t extend the $20-per-megawatt-hour Production Tax Credit for wind — set to expire December 31? On a project this size, that’s an $80,000 deduction every hour at full capacity.
Then you’ve got a dead duck. It would be hard to go without a subsidy. But they’ll probably pass it.
You’ve advocated a higher gasoline tax. What do you think the tax ought to be?
I don’t have a formula. I’ve just said, if it were up to me, I’d raise the tax to kill demand. And the people who are going to be most hurt by it, give them a break on payroll taxes or something else.
Is ethanol part of the solution?
Ethanol is political. That’s what Bob Dole told me in 1989. He called me up and said, “Quit talking down ethanol. You need to understand something: There are 21 farm states, and that’s 42 senators. Those senators want ethanol.” He said, “Are you getting the picture?” And I said, “Yeah, it’s coming through pretty clear.” [Dole confirms that Pickens’s account is “probably accurate.”]
Not exactly an inspiring vision of Congress.
The leadership is absolutely, totally pissy in Congress — a real conglomeration of fruitcakes. I mean pitiful people.
So would you cut the ethanol subsidy?
No. Hell, I’d rather subsidize ethanol or cream soda than have the money going out of the country buying oil. If you subsidize ethanol, the technology will ultimately get better. Corn will not be the primary ethanol fuel. They’ll go to something cellulosic. People who are against it say, “It costs so much to buy ethanol.” It costs more to buy oil from the Middle East. You’re better off circulating money in the United States. Create jobs here.
This is something that has been developing in my mind for the last year or so. I have come to realize that businessmen, especially powerful ones like Mr. Pickens, aren’t capitalists. They are just actors trying to maximize their piece of the pie. And the quickest and most secure way to ensure that their piece of the pie grows is by cozying up with the government.
Mr. Pickens, in fact the whole “environmentalist” business sector, would probably not exist if it were not for our federal, state, and local governments. These governmental bodies force you and I to put solar panels on our roofs, subsidize wind and ethanol, and a myriad other things all in the name of being “green.”
If wind were truly a great investment then Mr. Pickens would not need tax credits in order to turn a profit. If all the subsidies, tax credits, regulations, and tariffs were stopped tomorrow our energy situation would change dramatically. But that’s all hypothetical and Mr. Pickens completely understands the real world.
He knows that there is no financial victory to be made from fighting the government. So he does what any logical player in our market should do, he plays the game. He, Al Gore, and every other environmentalist “businessman” play on our fears of a not-to-distant apocalypse unless we embrace wind or carbon credits or whatever else that is “green.”
As a businessman I admire Mr. Pickens. He has assessed the strategic situation and has positioned himself for profit. But our present strategic situation is stacked against our country’s long term viability.
Our government is responsible for spending an ever increasing amount of our GDP (federal, state, and local governments spent over 35% of our GDP in FY 2005). Our government has decided to spend our money on unproven technologies or at least on technologies that aren’t as efficient as what is already available (nuclear power, for example). And until that changes and our money is spent by US we are going to have to live with our government spending our money on technologies older than our country so that Mr. Pickens can make up to 25% on his “investment.” BigT
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