Special Reports
Why T. Boone Pickens' 'Clean Energy' Plan Is a Ponzi Scheme

By Scott Thill
August 21, 2008

The controversial oil magnate has made headlines for a supposed conversion to
cleaner energy, but there's ample reason to be suspicious.

"If you are going out of business, you don't go down with the ship, you get
another ship. For us, it's natural gas." -- T. Boone Pickens, "Becoming a Billionaire"

You can't always get what you want, the Rolling Stones counseled. But if you try
sometimes, you get what you need. Factor billions of dollars, questionable
loyalties and a privatization rap sheet invested more in profit than people into
the equation, and you usually can get both what you want and what you need. In
the case of hyper-loaded oil tycoon T. Boone Pickens, that means having your
cake on climate crisis, fossil fuel addiction, eminent domain, water
privatization and corporate earnings -- and eating it too.

In July, the oil magnate unveiled a well-publicized campaign, the Pickens Plan,
which begins with an obvious premise: "America is addicted to foreign oil."

Pickens' proposal to kick the habit is straightforward and simple: "Building new
wind-generation facilities and better utilizing our natural gas resources can
replace more than one-third of our foreign oil imports in 10 years."

Sounds fair enough, especially given that Pickens and climate-crisis herald Al
Gore have melded minds on the issue. But not hard enough, which is where the
cracks in the Pickens Plan begin. "(Gore) asked if we could join together and
do something," Pickens explained to Bloomberg News. "I told him no, because
global warming is on page two for me. Page one is foreign oil.''

That page seems to be recently written. As previously noted on either side of
the red-blue divide, Pickens has funneled millions into 527s like Swift Boat
Veterans for Truth, helping derail John Kerry's bid for the White House in 2004.

He simultaneously committed hundreds of thousands on top of that to the election
and inauguration of both Bush administrations, both spearheaded by fossil fools
whose kinship with foreign oil producers not only launched an invasion into an
oil-rich but nevertheless sovereign nation, but also nearly tripled the price of
oil in seven years and handed campaign contributors like Exxon the most bloated
earnings in corporate history.

Sure, Pickens eventually decided to stop funding political campaigns, but that
deathbed conversion happened the same July that the Pickens Plan ramped up its
nearly $60 million media blitz.

It gets worse. Pickens is currently the head of BP Capital Management, a
secretive hedge fund (aren't they all?) that has extensive connections to the
magnate's hated "foreign oil" interests. The most glaring example from its
investment portfolio is Halliburton, which was once run by U.S. Vice President
Dick Cheney, is currently headquartered not in America but Dubai, and whose main
business segments and subsidiaries involve oil exploration, construction,
production and refining. And that's not mentioning its resume on rampant fraud
and corruption, especially in Iraq but also elsewhere, which has so far cost
American taxpayers billions.

But Halliburton isn't the only BP Cap holding that stinks. Pickens is also
heavily invested in Schlumberger, the world's largest oil services corporation;
nuclear and conventional energy powerhouse Shaw Group; the embattled
ex-Halliburton subsidiary Kellog Brown and Root and so on. For a very rich man
who decries the influence foreign oil has on American life, Pickens sure hasn't
put his money where his mouth is. He's put his money where the oil is.

"Even under the Pickens Plan," explains Treehugger's Matthew McDermott, "the
U.S. will be importing a significant amount of oil. It's a step toward energy
independence in that it expands renewable energy production, but I think framing
this debate in terms of energy independence isn't the way to go. If you want to
take a populist angle on this, pushing the very real benefits that wind power
and renewables in general can have in local economies stands on much more solid ground."

If Pickens were a populist, that might be true. But he's not; he's a stone-cold
capitalist whose taste for profit outweighs his desire for the common good.

Pickens may have spent $3 billion on wind farms to generate enough electricity
to take the load off natural gas, which is currently used to heat homes and
more, but only so that it can be used for cars and trucks.

Those are the shells being moved around in this particular game. But shuffling
responsibilities and resources will do nothing to forestall our dystopian
environmental future, unless those resources burn clean. And what the Pickens
Plan does not mention is that the oil tycoon has been deeply invested in natural
gas for decades. If the entire American fleet were to switch over to natural
gas, the air would possibly (but not probably) be around 30 percent cleaner in a
decade, but Pickens would be richer in much higher percentages. And while the
air would only stay cleaner for a short while, Pickens would stay loaded beyond
the grave.

"Pickens has stated on numerous occasions that, of course, he's going to make
money off the Pickens Plan," adds McDermott. "That's the nature of what he does
and has done. But natural gas is probably better used to generate electricity
than as a fuel source in cars. A better solution is electrically powered
vehicles. While there are still technical issues, if our transportation fleet
was all-electric, you could power it from whatever is the most regionally
appropriate way of generating electricity cleanly and cheaply. As our ability to
generate clean power improves, there would be theoretically no need to change
the transportation fleet."

It's much simpler than that, argues Food and Water Watch's Wenonah Hauter. "Gas
is not the solution for the future, no matter how the gas industry tries to portray it."

The biggest stain on the Pickens Plan is its architect's distasteful history of
water privatization. According to Hauter, it is probably the biggest reason,
more than all the aforementioned, not to trust him.

"With the water crisis looming in the future and his track record on selling
water regardless of the environmental cost," she asserts, "Pickens will be
viewed in the future as irresponsible. His background on promoting renewable
energy can't erase his current disregard for the sustainable use of water.

He recently supplemented his property holdings in Texas with 200,000 acres of land
atop the Ogallala Aquifer. Under Texas law, this purchase entitles Mesa Water,
Pickens' new company, to take more than 320,000 acre-feet of water, equivalent
to more than 104 million gallons, from the property. The Ogallala is already
severely depleted, and it's outrageous that he can stick a pipe in the ground
and suck this water out without any environmental impact assessment."

Pickens has used all manner of stratagems to obtain rights to what is not a
recreational, but an essential, resource for supporting life on the planet. He
has spent more than $100 million to acquire water from outlying areas in Texas
to sell to its metropolitan hubs, and although he hasn't yet found a buyer, it's
only a matter of time. Blue gold is the new black gold, and it won't be long
until the world is thirsty from one end to the other. Using his wind investment
to fuel his water privatization has only made things worse.

"Pickens used the enormous wind farm erected on his property as a means to lobby
for the right to pipe the Ogallala water to a major metropolitan center," Hauter
adds. "He successfully passed a bill through the Texas Legislature to allow a
water-supply district to transport alternative energy and water in a single
corridor. Pickens also successfully loosened the legal definitions of a water
district, allowing him to invoke the right of eminent domain so that he could
build the pipeline through the property of several neighboring landowners.

We should be concerned with these types of underhanded business dealings."

We should be concerned everywhere they occur, one might add, not just in Texas.

That means putting aside the media buzz and fawning articles and seeing the
Pickens Plan for what it is: a resource power grab for a post-oil oil tycoon.

Natural gas will not save us from environmental catastrophe, nor will it wean us
off foreign oil. Wind farms are a great start, but they deserve to be more than
leadoff pitchers for natural gas, whose implementation into our fleet will do
nothing to kick-start the massive emissions reductions we are going to need.

Everything from oceanic dead zones and bizarre storms to desertification and
societal collapse are on the burner. And we need to cool it down, rather than
heat it up.

In the end, the Pickens Plan will not make that happen, no matter what kind of
deathbed conversion T. Boone Pickens is experiencing.


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