T. Boone Pickens
T. Boone Pickens, Jr.
Born	May 22, 1928 (1928-05-22) (age 80) Holdenville, Oklahoma
Occupation	Financier; Chairman, BP Capital Management
Net worth	US$3.0 billion (2007)
Spouse(s)	Madeleine Pickens
Website www.boonepickens.com

Thomas Boone Pickens, Jr. (born May 22, 1928) is an American business man who chairs the hedge fund BP Capital Management. He was a well-known takeover operator during the 1980s. With an estimated current net worth of about $3 billion, he is ranked by Forbes as the 117th-richest person in America and ranked 369th in the world. Pickens has given more than $700 million away to charity.

Early life

Pickens was born in Holdenville, Oklahoma. His father worked as an oil and mineral landman (rights leaser). During World War II, his mother ran the Office of Price Administration, rationing gasoline and other goods in four counties.^[2] Pickens was the first child born via Caesarean section in the history of the Holdenville hospital.^[3]

Pickens delivered newspapers as an 11-year-old boy and quickly expanded his newspaper route from 28 papers to 156.^[4] Pickens later cited his boyhood job as an early introduction to "expanding quickly by acquisition," a business practice he favored later in life.^[4]

When the oil boom in Oklahoma ended in the late 1930s, Pickens' family moved to Amarillo, Texas.^[4] Pickens attended Texas A&M on a basketball scholarship but lost the scholarship^[4] and transferred to Oklahoma A&M (now Oklahoma State University), joining Sigma Alpha Epsilon fraternity. He graduated from Oklahoma A&M with a degree in geology in 1951. Following his graduation, Pickens was employed by Phillips Petroleum.^[4] He worked for Phillips until 1954.^[5] In 1956, following a period as a wildcatter, he founded the company that would later become Mesa Petroleum.^[5]

Career

Before reaching the age of 40, Pickens led Mesa's first big acquisition, the Hugoton Production Company, which was 30 times the size of Mesa.^[6]

By 1981, Mesa had grown into one of the largest independent oil companies in the world, and Pickens shifted his focus to acquiring other oil and gas companies. He spent much of the decade targeting undervalued companies, making solicited and unsolicited buyout bids and other merger and acquisition activity. This made Pickens a celebrity during the 'deal-making' 80s. His most publicized deals included attempted buyouts of Cities Service, Gulf Oil, Phillips Petroleum, and Unocal.^[7] During this period, Mesa did complete successful acquisitions of Pioneer Petroleum and the mid-continent assets of Tenneco.

These as well as other deals placed Pickens at the center of controversy during the 80s. His celebrity rose so quickly after the Gulf Oil takeover bid that he appeared on the cover of Time magazine^[8] and briefly considered running for president in the 1988 elections.^{[citation needed]} During this period, he was often characterized as a corporate raider and greenmailer, as many of his deals were not completed though Pickens and the shareholders he represented received substantial profits through the eventual sale of their stock. His later takeover targets included Newmont Mining, a New York-based firm, Diamond Shamrock, and Koito Mfg., Ltd., a Japanese auto-parts manufacturer, making substantial gains in the process.^[9] He was also involved in the creation of the United Shareholders Association (USA), which from 1986 - 1993 attempted to influence the governance of several large companies. After nearly two years of periodic hearing and debate, in July 1998 the Securities and Exchange Commission voted 4-1 to approve a one-share, one-vote rule, a primary USA objective.

On the local level, Pickens chaired the Board of Regents of West Texas State University in Canyon and in 1987-1988 contributed to the restoration of the administration building known as "Old Main". He was also active in the Republican Party in Potter County. Pickens organized a campaign in the mid-1980s against the Amarillo Globe-News newspaper, for what he claimed was inaccurate reporting about his deals and Mesa. Although the newspaper owner, Morris Communications, replaced its publisher twice during the conflict, Pickens' attempts to have the paper change its editorial policy failed. Shortly thereafter, in 1989, Pickens and Mesa moved to a suburb of Dallas.^[10]

In 1997 Pickens founded BP Capital Management (then called BP Energy Fund). He holds a 46% interest in the company which runs two hedge funds, Capital Commodity and Capital Equity, both of which invest primarily in oil and natural gas. In 2006, Pickens earned $990 million from his equity in the two funds and $120 million from his share of the 20% fees applied to fund profits.^[11] In 2007, Pickens earned $2.7 billion, as BP Capital Equity Fund grew by 24% after fees, and the then $590 million Capital Commodity fund grew 40%, thanks to, among others, large positions in the stocks of Suncor Energy, ExxonMobil and Occidental Petroleum.^[12]

Pickens has recently begun buying up subsurface water rights in Texas. CBS News reported in 2006 that Pickens' company, Mesa Water, bought ground water rights for 200,000 acres (800 km²) in Roberts County, Texas for $75 million, estimating the investment will be worth $1 billion. "'I know what people say — water's a lot like air. Do you charge for air? 'Course not; you shouldn't charge for water,' says Pickens. 'Well, OK, watch what happens. You won't have any water.'" ^[13]

  Natural gas

Pickens has begun speaking out on the issue of peak oil, claiming that world oil production is about to enter a period of irrevocable decline. He has called for the construction of more nuclear power plants, the use of natural gas to power the country's transportation systems, and the promotion of alternative energy. Pickens' involvement with the natural gas fueling campaign is long-running. He formed Pickens Fuel Corp. in 1997 and began touting natural gas as the best vehicular fuel alternative because it's a domestic resource that, among many advantages, is clean (Natural Gas Vehicles or NGVs emit up to 30% less pollution than gasoline or diesel vehicles) and reduces foreign oil consumption. Reincorporated as Clean Energy in 2001, the company now owns and operates natural gas fueling stations from British Columbia to the Mexican border.

  Activism

  Political interests and contributions

Since 1980, Pickens has made over $5 million in political donations.^[14] He was a financial supporter of President George W. Bush and contributed heavily to both his Texas and national political campaigns. In 2004, Pickens contributed to 527 Republican groups, including a $3 million contribution to the Swift Vets and POWs for Truth attacking Bush's rival, John Kerry, and $2.5 million to the Progress for America advocacy group. In 2005, Pickens was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.^[15][16][17]

On July 16, 2007, Pickens wrote an article for the National Review supporting Rudy Giuliani for President. "In Rudy Giuliani, a gracious and committed public servant I’ve known for many years, we see that rare blend of big-picture vision and proven track record of achieving the “impossible.” We see a forward-looking, accomplished executive eager to tackle the challenges of today’s America and ensure that tomorrow we wake up stronger, freer, and more united than ever before."^[18] Pickens was an executive-committee member of the Rudy Giuliani presidential committee.

Pickens chaired the celebration of the 40th anniversary of the American Spectator, a conservative U.S. monthly magazine covering news and politics.^[19]

Pickens "said he has stopped giving to political campaigns and renounced his previous Republican affiliation in his drive to focus the nation's attention on the need for immediate, drastic action on energy" such as solar and wind. The Washington Post says that "perhaps the strangest role" Pickens "has fashioned for himself is his current one: the billionaire speculator as energy wise man, an oil-and-gas magnate as champion of wind power, and a lifetime Republican who has become a fellow traveler among environmentally minded Democrats -- even though he helped finance the 'Swift boat' ads that savaged" Sen. John F. Kerry's presidential campaign. In an editorial, the New York Times reports Pickens "has decided that drilling for more oil is not the answer to the nation's energy problems. [5]

  Swift Boat challenge

Main article: Swift Boat challenge

On November 6, 2007, Pickens reportedly offered a million dollars to anyone able to dispute any claims made by the Swift Vets and POWs for Truth (SVPT), a group he had supported during the 2004 presidential election.^[20] John Kerry, whose military record and anti-war activism during Vietnam was the target of the group's book and media campaign, sent Pickens a letter on November 16, 2007, accepting the challenge, requesting that Pickens donate the money to the Paralyzed Veterans of America should he succeed in disproving any of the SVPT claims.^[20] In response to Kerry's acceptance of the challenge, Pickens issued a letter the same day, narrowing the original challenge to the SVPT ads, and requiring Kerry to provide his Vietnam journal, all of his military records, specifically those covering the years after his active duty service, and copies of all movies and tapes made during his service. Pickens' letter also challenged Kerry to agree to donate $1 million to the Congressional Medal of Honor Foundation, if Kerry "cannot prove anything in the Swift Boat ads to be untrue."^[21] Kerry later accused Pickens of "parsing and backtracking" on his initial offer and wrote that "I am prepared to prove the lie and marshal all the evidence, the question is whether you are prepared to fulfill your obligation."^[22]

On 22 June 2008, a group of Vietnam veterans who previously served with and now work with Mr. Kerry accepted the challenge and sent a 12-page letter — with a 42-page attachment of military records to support their case — with which they claimed to rebut several of the accusations of the Swift boat group.^[23] Boone Pickens has responded with a message stating "In reviewing your material, none of the information you provide speaks specifically to the issues contained in the ads,” he wrote, “and, as a result, does not qualify for the $1 million."^[24]

  Lobbying efforts to stop horse slaughter

Pickens lobbied for the American Horse Slaughter Prevention Act (HR 503) which would prohibit the slaughter for human consumption and the trade and transport of horseflesh and live horses intended for human consumption.^[25]

  Philanthropy

  Donations to Oklahoma State University

Pickens has been a major financial contributor to his alma mater, the Stillwater campus of Oklahoma State University (OSU). Through his contributions, Pickens has spearheaded an effort to create an athletic village just north of the existing campus. In order to do so, hundreds of homes were purchased by the OSU administration using Pickens' contributions. Pickens' gift remains the largest donation to a university's athletic program in collegiate history. His total contributions to OSU come to over $400 million dollars. Over $265 million, or 66%, of his donations have been towards athletics. Pickens also has made substantial academic gifts to Oklahoma State University, particularly to the School of Geology, which is named for him.

On December 30, 2005, Pickens made a $165 million gift to Oklahoma State University. The New York Times reported that "the money spent less than an hour on December 30 in the account of the university's charity, O.S.U. Cowboy Golf Inc., before it was invested in a hedge fund controlled by Mr. Pickens, BP Capital Management."^[26] Pickens, who is on the board of the O.S.U. Cowboy Golf, waived any management fees for the OSU monies, however, and all profits of the fund go to growing the OSU gift. The gift is intended to help fund an upgrade of the football stadium and construction of an athletic village, but sparked controversy because OSU planned to use eminent domain to acquire residential property for the projects.^[27] The donation comes after a $70 million gift from Pickens to OSU in 2003, which was similarly structured using O.S.U. Cowboy Golf, Inc.^[28]

On July 28, 2007 the Board of Regents of Oklahoma State University approved a resolution to move $28 million from the OSU Foundation into Pickens' BP Capital Management company in Dallas. Oklahoma State has previously invested $277 million in the fund. Pickens has been waiving fees for the university's investments with his fund.^[29]

On May 21, 2008 Pickens donated $100 million dollars to academics at Oklahoma State University. The gift will be matched by the state of Oklahoma.^[30]

  Humanitarian contributions

Pickens and employees of his BP Capital LLC donated $7 million to the Hurricane Katrina relief effort. The Chronicle of Philanthropy lists Pickens as among its largest charitable givers 2005 and 2006. He has donated nearly a half a billion dollars to philanthropic causes during his career.

On May 16, 2007, Pickens donated $100 million to two University of Texas health care institutions. The gifts were donated to the UT Southwestern Medical Center at Dallas and The University of Texas M.D. Anderson Cancer Center in Houston. The donations are required to grow to $1 billion within twenty-five years before they can be disbursed by the recipient institutions.

On August 23, 2007, Bizjournals.com reported that Pickens is donating $2.5 million to Happy Hill Farm Academy/Home, a residential school for at-risk children and teenagers, to build a training center and guest lodge. Pickens donated $1 million to Happy Hill Farm for the construction of a new academic campus at the residential school in February 2007.^[31]

On December 5, 2007 the Dallas Business Journal reported that Pickens had donated $6 million to Jubilee Park located at S. Carroll Avenue and Lindsley/Parry Avenue in Dallas and would man a bulldozer to begin demolition of an abandoned building across the street from a kindergarten Head Start program in Jubilee Park.^[32]

On June 20, 2008 Pickens donated $25 million to the University of Calgary, Faculty of Medicine during a visit with Calgary Flames owner, Harley Hotchkiss. ^[33]

  Alternative energy

On September 19, 2007, Pickens told CNBC that the price of oil could rise to $100. "Demand is up and supply is flat, so it's got to go on up," said Pickens, whose company is betting on natural gas for vehicles. "I can give you an Oklahoma guarantee that natural gas will never sell above diesel and gasoline prices" as fuel for vehicles, Pickens added.^[34] On January 2, 2008, the first contract for $100 bbl oil was sold on the NYMEX exchange.^[35]

  Wind power

In June 2007, Pickens announced the intention to build the world's largest wind farm by installing large wind turbines in parts of four Texas Panhandle counties. The project would produce up to four gigawatts of electricity. Pickens' Mesa Power LP will undertake the construction. If completed, the farm would generate more than five times the 735 megawatts produced at the present largest such farm near Abilene, according to Susan Williams Sloan, spokesman for the American Wind Energy Association.^[36]

On August 16, 2007, Pickens' Mesa Power announced that it had filed documents with the state of Texas to add four gigawatts of electricity to the state grid. The filing with the Electric Reliability Council of Texas (ERCOT) projected that the project would be completed in 2011 and would include up to 2,700 turbines on up to 200,000 acres (810 km²) in Roberts and adjacent counties in the Texas Panhandle. "We are now meeting with Panhandle landowners and negotiating wind lease and easement agreements," said Pickens. "We are excited at how quickly the pieces are falling into place."^[37]

On January 30, 2008, The Oklahoman reported that Pickens was ready to start buying wind turbines for the project within a month, that he planned to buy between 1,700 and 2,000 turbines, and that they will cost from $200 million to $300 million.^[38] Pickens added that he has been approached by twenty potential partners on the project but has not yet made a final decision.^[38] "We have not picked any banker and we have not picked any partner," Pickens said.^[38] "It is kind of nice ... I have decided I can get pretty far down the track before having to make those choices."^[38] Pickens predicted that similar wind farm projects could be built in the Texas Panhandle and the US-Canadian border in the future.^[38]

On May 15, 2008, Pickens' Mesa Power announced that it had placed a first order for 667 1.5-megawatt turbines from General Electric.^[39] The turbines will be delivered in 2010 and 2011.

  The Pickens Plan

Main article: Pickens Plan

On July 8, 2008, Pickens announced a major energy policy proposal, called the Pickens Plan.^[40] The plan promotes "alternatives" to oil, including natural gas, wind, and solar.^[41] A major feature of the plan is replacing the 22% of its electricity that the United States gets from natural gas with wind energy, which would then allow that natural gas to provide 38% of the nation's fuel for transportation and reduce its dependence on foreign oil. The Pickens Plan calls for the United States to utilize its wind corridor in the middle of the country stretching from Texas through the Great Plains to the Canadian border.

Pickens plans to spend $58 million on his multi-media effort to promote the Pickens Plan. Pickens multi-media campaign includes old media, such as newspaper and TV, and new media, such as YouTube and Facebook.^[42]

As part of this effort, Pickens has appeared on ABC's Good Morning America and Nightline, the CBS Evening News, CNN's Lou Dobbs Tonight, CNBC's Squawk Box and Fox News.^[43]

Carl Pope, executive director of the Sierra Club, has expressed support for the Pickens Plan.^[44]

On July 7, 2008, the Independent Green Party of Virginia became America's first state political party to endorse and join the Pickens Plan.^[45]

The Pickens Plan is a major energy policy proposal announced July 8, 2008 by American businessman T. Boone Pickens to reduce the United States dependency on foreign oil imports by investing approximately 1 trillion USD ( 8-4-08  TBP says this Trillion is easily private money)  to build vast wind turbine farms for power generation, and then by shifting the natural gas used for power generation to fuel automobiles.

  Proposal

Pickens said the plan could cut the amount the country spends annually on foreign oil from $700 billion to $400 billion. ^[1] He proposed the following steps:^[2]

1. Using the United States' wind corridor, private industry will fund the installation of thousands of wind turbines in the wind belt, generating enough power to provide 20 percent or more of the country's electricity supply.
2. Again funded by the private sector, electric power transmission lines will be built, connecting these wind power generating sites with the power grid, providing energy to the population centers in the Midwest, South and Western regions of the country.
3. With the energy from wind now available to serve the large population centers in key areas of the country, the natural gas that was historically used to fuel natural gas-fired power plants can be redirected and used as a fuel for private cars and thousands of vehicles in the transportation system. This reduces the need for imported gasoline and diesel fuels.

According to Ray Bradley of the Institute for Energy Research, who has analyzed the plan, the Pickens plan relies on special government mandates and large subsidies.^[3]

  Effects on the environment

The Pickens Plan significantly reduces carbon dioxide emmisions because it shifts a percentage of electricity production from combustion to carbon neutral wind power. Automobiles would still produce carbon dioxide whether combusting natural gas or gasoline, but combustion of gasoline produces much larger amounts of nitrogen oxides than combustion of natural gas. Nitrogen oxides are a major air pollutant and cause brownish atmospheric smog.

  Multi-media campaign

Pickens plans to spend $58 million on his multi-media effort to promote the Pickens Plan. Pickens's multi-media campaign includes old media, such as newspaper and TV, and new media, YouTube, Facebook, MySpace, and Twitter.^[4] Pickens Plan has created its own social network on its website powered by Ning.^[5]

As part of this effort, Pickens has appeared on ABC's Good Morning America, the CBS Evening News, CNN, and Fox News.^[6]

Pickens' efforts are supported by his spokesperson Jay Rosser and political ad firm Joe Slade White & Co.^[7]

  Grassroots organizing

Pickens plans to organize supporters by Congressional districts.^[8]

  Endorsements

• Carl Pope, executive director of the Sierra Club, has expressed support of the Pickens Plan.^[9]

• The New York Herald in an editorial endorsed the Pickens plan.^[10]

• On July 7, 2008 the Independent Green Party of Virginia became America's first state political party to join, and endorse The Pickens Plan.^[11]

  Criticism

 

  Concerning government subsidies and protectionism

• According to Rob Bradley of the Institute for Energy Research, who has analyzed the plan, "The Pickens plan relies on special government mandates and subsidies to pick the pockets of American taxpayers and ratepayers," Bradley said. "Wind power is inefficient, unreliable, expensive, and a burden to the electricity grid. Natural gas vehicles are a niche product at best. As such, this plan is Robin Hood in reverse: taking from average Americans to subsidize wealthy political entrepreneurs. Finally, the Pickens Plan misdirects the public and policymakers from real solutions: less government for more abundant and affordable energy.".^[12]

• Jerry Taylor, in his article "T. Boone Hard-Wired for Subsidies," says instead of allowing the market to work, Pickens wants government to limit imports of foreign oil along with installing the wind plants so that he can become richer at the expense of consumers. He also says if wind power were a sensible economic investment, then it would not require the "lavish federal and state subsidies already in place or the additional largesse sought after by Mr. Pickens." He says if energy production would be left to the free market, then "Mr. Pickens would be out a lot of money, which is probably why Mr. Pickens wants to hard-wire the market to consume the things he's investing in and have the government lavish him with subsidies in the course of doing so. I wish Mr. Pickens well in the course of his wind energy business, but I see no reason why taxpayers, ratepayers, or consumers ought to be forced to sacrifice in order to fatten his already ample bank account."^[13]

  Other

• Dan Becker, director of the Safe Campaign and former head of the Sierra Club's global warming program. "These are big question mark. . . (t)here are a lot of things out of Mr. Pickens' control."^[14] He said the plan could cut the amount the country spends annually on foreign oil from $700 billion to $400 billion."^[15]

• Ed Wallace, a syndicated journalist, points out that Pickens proposes spending 1 trillion USD on wind generators that are estimated to be fully efficient less than 10% of the time by the Electric Reliability Council of Texas. Wallace states that this doesn't make financial sense when traditional power plants are required to provide the rest of the power. He also points out that the estimated trillion dollar investment doesn't pay for building the power infrastructure to move the power from the "wind belt" in the plains states to the coastal portions of the country, for refitting automobile refueling stations nationwide, nor the costs of refitting existing vehicles or purchasing natural gas-powered automobiles.^[