Posted by: JohnnyRook | August 30, 2008

T. Boone Pickens Loves You and Wants to Use Your Debit Card

Let me state my prejudices up front: I don’t think that T. Boone Pickens is an American hero and I don’t trust him any more than I trusted Daniel Plainview in There Will Be Blood.

“What?” you say. “Isn’t Pickens the Ayn-Randian size hero come to the rescue of the inspiring but ineffective Al Gore? Will we not have cheap wind power everywhere now that a real Texas, pull-himself-up-by-his-bootstraps he-man has taken up the green cause and is investing his hard-earned billions in saving us from Middle Eastern Sheiks and Hugo Chavez? Isn’t Pickens being embraced by progressives and environmentalist activists as a man of vision and courage?”

If you want to read about how Pickens is a changed man you can click here.

If you’re interested in a less credulous point of view, see below.

A closer look at Pickens reveals a number of reasons to doubt. A. Siegel, Joe Romm, Josh Nelson and others have explained some of the contradictions that Pickens represents. Among them:

Pickens is an unrepentant financial and spiritual supporter of the Swift Boat Campaign against John Kerry.

He is an active financial supporter of James Inhofe, the gas and coal company, Climaticide denialist, stooge who also happen to be a embarrassment Senator from Oklahoma.

Pickens talks about sustainable energy but finances Republican, not Democratic candidates.

But the biggest reason to stay away from Pickens is that, in reality he is only secondarily interested in wind power. What Pickens really wants to do in Texas is sell a public resource, water, to the public, with public help.

T. Boone Pickens thinks that if he sells us wind power, we won’t notice or care that he plans to make a fortune by contributing to the destruction of the Ogallala aquifer, the most important aquifer in the United States. For the most part, so far, he’s been right.

Like many other smart (but less wealthy) people, Pickens realized quite a while ago that the era of fossil fuels was nearing it’s end, but reaching this conclusion led him to focus not on alternative energy but on water. Why? Because Pickens is driven not by a desire to create or to solve problems but by the corporate con artist’s compulsion to pull off a a clever scam, to make money out of nothing, to get rich by leveraging other peoples assets.

Despite his patriotic protestations concerning energy independence there is no evidence that Pickens is motivated by anything other than a desire to make the big deal. Pickens’s new awareness did not lead him to ask: “Now that the fossil fuel age is ending, how can we power human civilization while avoiding the consequences of Climaticide (he almost never mentions global warming)? but rather: “Now that petroleum is coming to the end of its run, what other resource can I buy up cheap and make a killing on?”

Water is a commodity,” he says. “Heck, isn’t it like oil? You have to come back to who owns the water. The groundwater is owned by the landowner. That’s it.” When it comes to potential buyers, Pickens cares about only one thing: how much they’re willing to pay. “Do I care what Dallas does with the water? Hell no.”

It is very foolish to forget that Pickens made his fortune as a corporate raider who profited not by creating anything himself, but by identifying other people’s undervalued assets and buying them up piecemeal in attempts to seize control of them all.

With his wind farm proposals and high profile advertising campaign, T. Boone Pickens has been winning the hearts and minds of people who should know better, including the Sierra Club’s Carl Pope and the Center for American Progress’s John Podesta.

The enthusiasm on the part of many environmentalists for Pickens’ wind proposals and the negligible attention that Pickens machinations have attracted as he has maneuvered to sell off a large chunk of the Ogallala aquifer, to which he could only lay claim because of the utter stupidity of Texas water law, is understandable only if one sees them for what they are: one of those great romantic con jobs where the poor, unsuspecting victim, more accustomed to being spurned than courted, is swept off her feet by a smooth-talking seducer to whom she hands over her heart, her debit card and her virtue because, at last, she believes, she has found someone who truly loves her. To see American progressive leaders as giddy as the victims of Nigerian con men is an embarrassing and pitiful spectacle.

In 1971 Pickens bought the Mesa Vista ranch in Roberts County in the West Texas Panhandle. Like Daniel Day Lewis’s character in There Will Be Blood, the ostensible reason was to have a place to hunt quail. Pickens’s 68,000 acres make him the largest landowner in the county and his 150,000 to 200,000 acres of water rights, make him the largest private owner of water in the United States.

Pickens’s attention was first drawn to water in 1996 when a local utility, the Canadian River Municipal Water Authority (CRMWA) bought some 43,000 acres of water rights in the country. In true Texas fashion, water use in the Lone Star state is governed by the rule of the biggest gun pump. The more you can pump the more you can take even if it drains your neighbors dry.

Pickens initial actions were defensive. Seeing that his own water was threatened, he tried to sell it to the utility, but his asking price was more than CRMWA could afford. (In Texas landowners can sell their water rights separately from the land itself.)

Pickens then went on the offensive, buying up his neighbors’ water rights as part of a large scale plan to resell them to Texas’s thirsty, growing and inefficient urban centers. After CRMWA turned him down, Pickens attempted to see water to Austin, but that city with whom he has often feuded also spurned his advances, preferring to buy up water rights in Roberts County on its own.

Business Week’s Susan Berfield describes what happened next:

In 2002, Pickens began approaching several of Texas’ sprawling cities, all of which share one defining feature: Their populations are growing so quickly that they are constantly in need of new supplies of water. But with water, as with so much else, location is critical. And Pickens’ water is far, far away from anyplace that might buy it. Pickens knew he’d have to build a pipeline, and to do so at anything resembling a reasonable cost, he’d need the power of eminent domain—the right of a government entity to force the sale of private property for the public good. Water utilities have that right. If Dallas agreed to buy Pickens’ water, it could extend such authority to him. But Dallas deemed Pickens’ price too high and declined to do a deal. So Pickens and his executives tried to create a Fresh Water Supply District—a government entity that would have that power. But they couldn’t get it through.

Over the next several years, Pickens continued accumulating water rights and began to lease other land, this time with the idea of creating the world’s biggest wind farm. “One of the great wind areas is right up where we are,” says Robert L. Stillwell, Pickens’ general counsel. “You can set it right on top of where the water is.” And since, one day anyway, Dallas may well buy both, Mesa could use a single right-of-way for the water pipeline and the electric lines. In Roberts County there would be real economic benefits from the wind farm. “The wind is meant to sweeten the deal,” says Representative Chisum. “The big money for Pickens is in the water.

Texas Counties edited

In 2007 Pickens found a way to get the eminent domain he needed:

A political shopping spree may have accelerated the efforts of Dallas billionaire T. Boone Pickens to hijack sweeping government powers of eminent domain. The tycoon wants these extraordinary powers to benefit his private utility companies: Mesa Water and Mesa Power. The $1.8 million that Pickens spent on Texas’ last two elections made him the state’s number 5 individual donor – up from number 12 in 2002. Pickens wants condemnation powers to lay 320 miles of utility lines from suburban Dallas to the Texas Panhandle – with or without the approval of the owners of the private land that he would excavate.

Such a power grab by a single entrepreneur would be stunning in a conservative state. As recently as 2005 Texas’ Republican leaders appointed an interim legislative committee to study the abuse of eminent domain to promote economic development. When appointed co-chair of this committee, Representative Beverly Woolley, R-Texas, issued a stern warning in a House media release. “I believe it is important that private property be protected,” Woolley said in the statement. “Eminent domain should be used in limited circumstances for necessary, traditional, public uses.”

In their very next session, however, lawmakers enacted legislation that helped put these expansive powers in Pickens’ hands. With Pickens spending up to another $1 million on state lobbyists in 2007, not a single lawmaker of either party voted against the legislation, which now is Texas law.

Two changes in the law benefited Pickens. The first allowed a water supply district to run alternative energy transmission lines through a water supply corridor (pipeline route). The second changed the rules on the formation of water supply districts.

Previously, a district’s five elected supervisors needed to be registered voters living within the boundaries of the district. Now, they only had to own land in the district; they could live and vote wherever

Pickens quickly took advantage of the new opportunity. He sold 8 acres to 5 of his employees only 2 of whom lived on the property (his ranch managers). The new landowners announced their intention to form a water district whereupon the county organized an election in which the only two people eligible to vote were Pickens employees, the ranch manager and his wife. The vote was a unanimous 2-0 and so Roberts County Fresh Water Supply District Number 1 was created.

The new district gave Pickens two important advantages: the first was the right to issue tax-free bonds and the second, what he had been looking for all along: the power of eminent domain. In short order, Mesa was contacting landowners along Pickens’s proposed pipeline route to Dallas to inform them that he was interested in buying a 250 foot wide swath of land through their properties, while also pointing out that those who did not sell could face condemnation under Fresh Water Supply District Number 1′s right of eminent domain. Nevertheless, Mesa found very few takers.

Pickens “has pulled a shenanigan,” said Phillip Smith, a rancher who serves on a local water-conservation board. “He’s obtained the right of eminent domain like he was a big city. It’s supposed to be for the public good, not a private company.”

Pickens isn’t bothered that by his invoking the right of eminent domain, Mesa has inflamed landowners up and down the route. “It always does,” he says.

Pickens believes that if he pumps and sells all the water that he can, he could make $165 million dollars a year. But aside from the costs to other individual landowners and the taxpayers of Texas what will be the costs to the aquifer which has been overdrawn for decades now?

According to Timothy Egan:

Only a handful of family farmers still work the homesteads of No Man’s Land and the Texas Panhandle. To keep agribusiness going, a vast infrastructure of pumps and pipes reaches deep into the Ogallala Aquifer, the nations biggest source of underground freshwater, drawing the water down eight times faster than nature can refill it. The aquifer is a sponge stretching from South Dakota to Texas, which filled up with glaciers melted about 15,000 years ago. It provides almost 30 percent of the irrigation water in the United States. With this water, farmers in Texas were able to dramatically increase production of cotton, which no longer has an American market. So cotton growers, siphoning from the Ogallala, get three billion dollars a year in taxpayer money for fiber that is shipped to China, where it is used to make cheap clothing sold back to American chain retail stores like Wal-Mart. The aquifer is declining at a rate of 1.1 million acre feet a day–that is a a million acres, filled to a depth of one foot with water. At present rates of use, it will dry up, perhaps within a hundred years. In parts of the Texas panhandle, hydrologists say, the water will be gone in 2010. [Worst Hard Times pp. 310-311]

Meanwhile:

In Roberts County, people hold on to the hope that pumping from the Ogallala can be controlled. In 1998, as Pickens and local water utilities began buying up water rights, the groundwater conservation district placed some restrictions on the rule of capture that it calls the 50-50 rule: Anyone who receives a new permit to pump can draw down the aquifer by only 50% over the next 50 years. Later, an additional limit of 1.2% per year was set. These essentially manage the depletion of the Ogallala under Roberts County; there, it is replenished at a rate of only 0.1% a year. Williams, who put the rules into place, says: “It’s like taking dollar bills out of your bank account and putting nickels back in. Even with a big bank account, there’s an end. That’s pretty much what’s happening in the Ogallala.”

Pickens, not surprisingly, is more concerned about transmission corridors than environmental fallout

stressed that transmission issues are still the biggest problem facing America’s energy supply. He also said he wants to see the equivalent of the Eisenhower highway system for power distribution.

Of course, he does, because an infrastructure investment on the scale of the Interstate Highway System, would give Pickens the corridor he wants to sell both wind power and, most importantly, water at no cost to him. But, who needs Pickens?

Both Al Gore and James Hansen have proposed building a national grid to integrate solar, wind and geothermal into a nationwide system within ten years. Such a system would move us a long way not only to energy independence, but also toward reducing greenhouse gas emissions enough to avoid the most catastrophic climate tipping points. And their proposals have no destructive water schemes associated with them.

We should build precisely such a nationwide grid. What we should not do is reward and subsidize a Texas system that is the result of vote buying in the Texas State Legislature, in effect grants the right of eminent domain to a private citizen so that he can seize his fellow citizens’ land, and all for the purpose of allowing Pickens to make billions of dollars selling off part of the commons while doing devastating damage to the nation’s largest and already crippled aquifer.
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But Pickens doesn’t want you to worry about the aquifer:

“When you hear that Boone Pickens is going to turn Roberts County into a dust bowl, that’s crazy,” Pickens says. “That’s not going to happen. We’re never going to be without water. There will always be water.”

Gee, Boone, I thought you used to be an oil man. Isn’t that what they used to say about oil?

But, that’s right you’re a green, wind power guy now aren’t you, so, of course, I can trust you. Still, I have this nagging doubt… when did you say we were getting married?

Coming up next: California’s Proposition 10 and T. Boone Pickens’s PR campaign to extract billions in natural gas subsidies for his business interests from California taxpayers.

Crossposted at Daily Kos


Responses

  1. [...] T. Boone Pickens Loves You and Wants to Use Your Credit Card, 8/30, JohnnyRook [...]

  2. [...] T. Boone Pickens Loves You and Wants to Use Your Credit Card, 8/30, JohnnyRook [...]


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