Even in the volatile world of energy markets, T. Boone Pickens has a reputation for being unpredictable. The longtime oilman became an advocate of alternative energy in recent years, with plans for a huge wind farm in the Texas panhandle—plans he's been forced to rethink some.
More recently, he has funded a national media campaign to reduce U.S. dependence on foreign oil, and has sponsored legislation in Congress to subsidize trucks that run on natural gas—a less expensive and cleaner fuel than oil, and one that is present in the U.S. in plentiful supply.
He and The Wall Street Journal's Jeffrey Ball discussed such matters. Edited excerpts of their conversation follow.
Pickens Shares His View on Global Warming
2:20In this excerpt from the latest Viewpoints Breakfast Series, Texas billionaire T. Boone Pickens tells WSJ's Alan Murray why he believes in global warming. (Sept. 9)
JEFFREY BALL: At some point you departed from many of your brethren in the oil industry. What got you launched on this campaign?
T. BOONE PICKENS: I kept seeing people that ran for president, Republican or Democrat, say, "Elect me and we'll be energy-independent."
I thought, really, is this going to just happen? Or do you have a plan? And I blame you, the media, that they never held these people to that remark.
I struggled with it, and my wife had to hear it and hear it and hear it. I woke her up in the middle of the night, and I said, "Madeleine, the American people have to see this, understand it. I'm going to spend some money to explain the story, then I'm going to explain the solution." So, I spent $62 million, and that very simply is the deal. Madeleine did say, "I'm sure you're going to be the one that's going to do this. But let's go back to sleep. Do it in the morning."
T. Boone Pickens, Chairman, BP Capital Management.
MR. BALL: It doesn't feel like an acute crisis to most people. You have loads of people following you on Twitter. You have lots of people showing up to your speeches. And yet you're banging your head against a wall on a lot of this stuff.
MR. PICKENS: No, I think I've made good progress. The American people are concerned. I've got 1,627,000 people signed up with me, and I do have a great amount of following, and we've been running focus groups. There's no question that the American people hate it that we import so much of our energy. They are concerned about OPEC. I think I have created that concern, that we're importing five million barrels a day from the enemy. We look stupid doing it.
MR. BALL: Are they willing to pay much more, or are they willing to change their behavior?
MR. PICKENS: It's not more expensive. My plan is cheaper. We only have one resource in America that will replace foreign oil, and that's natural gas.
MR. BALL: Talk about how you'd use natural gas in transportation. As I understand your plan, it's based on the notion that 18-wheelers and smaller trucks would run on natural gas. You'd have some limited number of fueling stations placed strategically around the country.
Pickens on U.S. Dependency on OPEC
2:29In this excerpt from the latest Viewpoints Breakfast Series with Alan Murray, Texas billionaire T. Boone Pickens explains his plan to eradicate the U.S.'s dependency on OPEC.
MR. PICKENS: That's it. The technology has been there for years. There are 12 million vehicles in the world today on natural gas. And we are the largest in natural-gas reserves in the world. Four thousand trillion cubic feet of recoverable gas. J.P. Morgan put out a report the other day of eight thousand trillion, but that is gas in place. And I say we can get 50% of it. We have the technology for that.
The fuel is cheaper; it's cleaner; it's abundant; and it's ours. I mean, we are going to go down in history as the dumbest crowd that ever came along. Don't try to do 250 million vehicles in America. Just do eight million 18-wheelers.
MR. BALL: And what would be the cost of the federal subsidies that you'd need—the tax breaks that you'd need to get those trucks on the road?
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MR. PICKENS: The legislation is written. The subsidy is $65,000 of tax credit.
MR. BALL: Per truck?
MR. PICKENS: Per truck.
MR. BALL: There have been questions raised about the perforation of the rock to get down to the gas, and the effect that might have on polluting aquifers, and the amount of water necessary to get at that gas. There have been big fights in New York and Pennsylvania about this.
MR. PICKENS: Show me an aquifer that's been damaged. And you're talking about the water: 90% of it is recovered and used again. Rex Tillerson, CEO of Exxon, testified before Congress a month ago. He said there have been over a million wells drilled in the last 50 years, and there is no evidence of any aquifer being damaged.
MR. BALL: You talked a lot about wind last time you were here. And there have been some developments in that plan, right? In January you said that investment realities had changed. You were essentially backing away from the plan to put all the turbines that you had ordered from GE in Texas—about 650 turbines. So where are you going to put the turbines?
MR. PICKENS: We had bought those turbines from GE. We negotiated, it was 1,000 megawatts and we reduced it to 500 megawatts, which is 324 turbines. The answer is scramble. You've got to find someplace to do those. I was going to do it in the Texas panhandle, and transmission got very, very complicated. We won't have transmission in there until 2013. But we'll be installing turbines this year.
I can tell you, from Roscoe, Texas, to the Canadian border, that is the best wind area in the world.
Price Is Wrong
Pickens Outlines Plan for Windmill Farm
3:06In this excerpt from the latest Viewpoints Breakfast Series with Alan Murray, Texas billionaire T. Boone Pickens outlines his plan to build the largest windmill farm in the world.
MR. BALL: I've read suggestions that because of what's happened on wind, basically you have great aspirations but you're not following through.
MR. PICKENS: I'd say that I've got to get a better market than I have now, but I think I will be back just as enthusiastic when that happens. You can't really get started now because wind is priced off the margin, and the margin is natural gas. So you're sitting here, gas at $4.50 and you've got to have—you can squeeze it at $6, but $7 will make the wind work.
MR. BALL: So wind's got a while to go to wait out gas prices?
MR. PICKENS: It does. You have some special situations, producers, where you can finance it. But what an opportunity for us Americans to start to move over to natural gas as a transportation fuel, when it's a fraction of what foreign diesel is.
MR. BALL: Just to be inelegant here, just to raise something that a lot of people raise, does this have anything to do with Boone Pickens's own gas holdings?
MR. PICKENS: Gas holdings? Sure, I've got interest in gas companies. What else can I say. Yeah, that's my business. I mean, that's what I know. I'm a geologist, and gas and oil is it. When you said I got out of the oil business, that's not true. And the reason why you've got to keep me in the oil business: I do not want to be identified as a wind man or a gas man. I much prefer to be called an oilman.
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