T. Boone’s Boondoggle

T. Boone Pickens is clearly a man on a mission. The iconic billionaire—whose plan for energy independence aims to transform America’s transportation and utility infrastructures—will spend nearly $60 million promoting the Pickens Plan over the airwaves and through lobbying. But many are questioning whether his real mission is adding to his $3 billion dollar fortune.

For the past few years, Pickens has been investing heavily in natural gas and compressed natural gas (CNG) vehicle technology. He owns the largest provider of natural gas for transportation in the United States, Clean Energy Fuels, and is a partner in a $160 million project to develop a mass-market CNG powered car. Combine that with Pickens’ investments in wind energy companies and you can be sure that every dollar spent implementing this plan will mean more money in his pockets.

The first major test of the Pickens Plan will come in the form of a referendum on the California ballot this November. Proposition 10 would authorize $5 billion in bonds to be paid back over a 30-year period—at a total cost of nearly $10 billion. More than half of the money would be devoted to encouraging the spread of CNG cars and trucks in a state that has proven itself more than willing to consider alternative vehicles. Pickens sunk nearly $8 million into promoting the initiative.

Proposition 10′s Key Provisions:

  • $2.9 billion in incentives of up to $50,000 toward purchases of certain high fuel economy and alternative fuel vehicles.

  • $1 billion devoted to research, development and production of renewable energy technology (likely to be focused on wind and solar energy.)
  • $250 million in incentives towards the purchase of renewable energy technology.
  • $150 million in college grants aimed at training students in renewable energy
    and alternative fuel technologies.

“Billionaire Texas oilman T. Boone Pickens, listed by Forbes as the 131st richest American, really, really wants your money. So much so that his natural-gas fueling company has shelled out 3.2 million to further the reprehensible scam known as Proposition 10.”

Los Angeles Times Editorial

Most of the $2.9 billion in incentives are targeted toward CNG vehicle purchasers—both private and commercial—but a $2,000 rebate would also help to offset the cost of any vehicle that exceeds 45 mpg in fuel efficiency.

Although Prop 10 may seem like an environmentalist’s dream come true, there are several reasons why most of California’s most prominent environmental advocacy groups oppose the plan. The Sierra Club, League of Conservation Voters, and Union of Concerned Scientists are against its adoption, citing the huge profits its main sponsor stands to reap from its passage, and the fact that compressed natural gas is a non-renewable fossil fuel which contributes to global warming.

For Pickens and his supporters, the more important energy issues are energy security and the economy. Consumers have been severely impacted by rising gasoline prices. And the United States purchases most of its petroleum from regimes they see as hostile to America.

Edwin Black questions Honda’s interest in selling the Honda Civic GX, the only new CNG vehicle available to consumers today.

There’s also the question of where these CNG vehicles would come from and how long it would take them to get here. Right now the Honda Civic GX is the only CNG vehicle available to consumers in the US, but Honda has failed to step up production of the Civic GX despite the enthusiastic response the vehicle has received in the US. “Honda has not only put a quota on the Honda Civic GX of 90 units per month, they actually stopped producing them when they sold out the quota,” said Edwin Black, author of Internal Combustion, in an interview with HybridCars.com. “Honda redlines most cities in America and will not sell the Honda Civic GX.”

“ The attempt by California’s Prop 10 to legislate into existence a market for natural gas vehicles would unnecessarily add pressure to drill and is a poor investment in times of scarce public dollars. ”

Roland Hwang
vehicles policy director
Natural Resources Defense Council

Proposition 10 is also not the only green referendum on the ballot in California this year. Proposition 1 would invest $9.95 billion toward an ultra-fast, zero-emissions rail network that would run from Sacramento to San Diego. Proposition 7 focuses on reshaping the state’s electricity infrastructure around solar.

Californians have a record of being ahead of the curve on environmental issues. With so many ideas circulating for how to get the state off carbon-spewing technologies and on to renewable energy, it’s more of a question of “how” than “if.” There are many technology paths to cleaner transportation—hybrids, plug-in hybrids, electric cars, biofuels, mass transit, setting technology-agnostic standards, etc. Why support a plan that is lopsided toward CNG? Moreover, Proposition 10′s critics say that spending most of a $5 billion bond on what is fundamentally a non-renewable energy—and that would largely benefit the bill’s individual sponsor—is not the answer.


  • Eric

    I don’t care if he profits as long as it is a good idea for our environment, and energy independence. That said, I think building up a CNG infrastructure and all new vehicles will just slow down the ultimate goal of building up renewable energy and electric vehicles. Instead lets increase make a serious “moonshot” type effort for renewable energy which will create jobs, help the environment, and allow us to give the finger to OPEC!

  • Samie

    Don’t really care if Pickens makes a buck last I checked I live in the U.S so I’m surprise to see that as the main focus of opposition. So again as I said maybe a month ago you need to look at the big picture. Why promote replacing a fuel with another that is for everyday cars and small SUV’s. Market for CNG just like oil needs to be diverse so if we change infrastructure to support this we will see more imported CNG. Why b/c if someone else in the world can produce natural gas cheaper it will be added to the domestic supply. Also domestic companies may be limited in large producers w/c may lead to higher natural gas prices due to little comp. Therefore foreign supplies enter the market. This is not the whole picture but overtime this ends up just like our oil markets. I’m ok with large vehicles like buses or delivery trucks on CNG but as I said why move cars to it, that it is a short-term idea but would last will beyond its purpose for small vehicles.

    I focused on CNG b/c most money is allocated towards this w/c seems a little silly especially over a 30 yr period. This does not seem like a balanced solution that everyone likes to talk about.

  • Jim Jones

    If this scum wouldn’t of came out with all those swift boat ads against Kerry, we probably would already of been way ahead of the game in renewables. That is why myself and others do not trust this jerk. You only get one chance with me and he blew it !!

  • RKRB

    One generally decent feature of capitalism is that if someone improves their income, and at the same time improves your income or quality of life, this is not a bad thing. The opposition’s beggar-your-neighbor approach may be politically correct, but it is mean-spirited and socially unethical .

    At any rate his proposal seems realistic, valuable, and worth studying.

    Our local caucus sponsored an initiative mandating all government cars (except when used for defense or civil protection) be powered by alternative fuels, with an average fuel economy well above current levels. It seemed like a good idea.

  • Ross Nicholson

    Americans have sunk trillions of dollars ‘protecting’ (buying) environmentalist sponsored ‘fragile’ lands with little or no economic value, for little or no economic return. Only Russia, Cuba, and Red China own a higher percentage of nationalized land. Similarly, Americans have subsidized and aggrandized oil and coal infrastructure at much more than 10 times the cost of environmentalist-recommended land purchases. It looks like to me that we Americans can change our minds a little about where our money goes when it is clearly in the best interest of our country. Mr. Pickens is rich. Mr. Pickens is ugly, too. He talks funny. His plan would make him a little richer. Who would take that mug and put it on TV? Maybe his voice is the voice of a leader?

    Sure, the obvious answer is that T. Boone Pickens is an American hero, standing up for what he believes, putting his money where his funny, ugly mouth is. Environmentalists (cough OIL COMPANIES cough) like things the way they are.
    Does it matter if Pickens makes a little jack on the side? Perhaps Mr. Pickens’ financial bravery should be rewarded? His courage is proven by his willingness to risk his fortune in the service of his country. You can bet what’s left of your republican stock and land portfolio that T Boone’s investment funds were withdrawn from oil stocks that would have done extremely well during the recent oil price run up. The man has lost a fortune and frightened millions of children. Pickens has thrown away a sure-thing proven investment for a comparatively low-return scheme that will clean our air dramatically (if imperfectly) and punish our enemies economically. We can survive an early Pickens Halloween. Lets begin to change the direction of our society now. Lets go with the Pickens Plan. He’s ugly and he talks funny, but he isn’t Iranian. True environmentalists know that stopgap measures that will pass might be all we ever really get. Yes 30% cleaner air is still 70% dirty, but we will save money buying American gas instead of the same old usual Iranian crude. 700 billion dollars a year going to Americans for natural gas instead of to Iranians for Iranian crude will mean our neighbors and landlords will stay American a little bit longer.
    We have a way of life here. We have a culture. We live with a small measure of personal and social freedom. These things are good. These things have value. So do pretty rocks, spotted owls and snail-darters. We must preserve it all. The T. Boone Pickens plan will extend the life expectancy of those good things and our stewardship of them for just a little while longer. Don’t we owe that to our children and grandchildren? Don’t we owe it to them to do whatever we can to protect their legacy? Their ENTIRE legacy? So get behind Proposition 10, vote for it, twist arms for it. Come on California! Lead this nation where it needs to go. The rest of us are counting on you.

  • Anonymous

    Here we go again. I just hate to read this type of article and see the little attached quotes lingering on the side. Who cares if Pickens makes a fortune. Henry Ford made a fortune getting us off a horses back. NAT Gas is just a bridge, how many times do you have to be told that. 100 years max. Think we can do something in the next 100 years . Not great, but much better than oil, in numerous respects. Its people like this author, that have the authority to publish this nonsense in powerful places that keep the reins pulled back on aggressive accomplishment in energy R&D in this country. Mr. author, what do you want ? Lets see, I’m 60 years old now, and have been talking about the need to get rid of the internal combustion engine since I was 18. Every presidential election that I have ever voted in has had both candidates talking about the need for changes in our energy policy. I repeat, every last one. Check it out yourself. Do you honestly believe that the technology needed to totally eliminate the use of the internal combustion engine for transportation of the masses in this country, on the ground anyway, has not all ready been found and refined many hundreds of times. You might spend a little bit more of your time digging real real deep in really hard to get to places, and I’ll bet you that one day, God willing, you may get to write something worth reading. Governing powers far beyond your comprehension have an all ready established agenda, and the internal combustion engine will go away, when they want it to, and only when they want it to. Until then, all the wonderful secrets will be paid for and kept tightly locked up. Your job should now be to dig them out, and then you will feel wonderful about writing again. Do you believe in dis-information ? Those incomprehensible powers running this country are just absolutely great at it. Oh, by the way, I write these all the time to a lot of you authors, so that one day, maybe some of you will really start looking hard, to uncover the truth.

  • Dan L

    Get rich quick schemes are the bane of the green movement. Sincere activists lay the groundwork for social change by raising public awareness. When there is enough awareness, business people who are only interested in making a buck use that awareness to get a government handout. They get rich. They don’t deliver. The public’s goodwill for environmental change is converted to anger and mistrust at being scammed.
    It has happened before. Witness corn based Ethanol as a bio-fuel. Corn farmers are all for corn based bio-fuel. They don’t care that there is no environmental case for it. It is good for corn prices.
    I’m delighted when business people make a profit. But unquestioning support for any “environmental” initiative is a recipe for disaster.

    CNG is at best a stopgap. There isn’t any more natural gas than there is oil, and we are already using it extensively for home heating, etc.

    Government funding should go toward solving the root problem, fossil fuel dependency.

  • Anon Imus

    T. Boone P. proves that great wealth does not equal great wisdom. So what does extreme wealth tell you about someone? It tells you that he’s greedy, a wealth addict, and no matter what agenda he’s promoting, it’s merely a means to an end, and that end never changes: get richer. This dude reminds me of the Mr. Potter character from “It’s a Wonderful Life.” I’ll listen to the windmill ideas because they’re entertaining, but CNG powered cars are not the best answer to our problem.

  • ECD4ME

    CNG could be done more quickly and relatively cheaply than battery EV or plug in hybrid. these “battery or nothing” zealots dont seem to realize that the technology is still under development and may or may not be available within the next few years. And at what price? 10-15K for the battery?! Get real! electric powered transport is way cheap and clean, once the batteries are available and practical. There is no danger that improving on already existing tech will endanger that. Let him make money. That’s why people (like me) invest isn’t it.
    And yes he is a turd and a right wing extremist IMO too. dramatically reducing oil consumption and the cost of driving benefits us all so let him be one.

  • Dan L

    ECD4ME, perhaps CNG could be done quickly and cheaply. But to what purpose?

    Price relief for the consumer? No. As soon as CNG vehicles become common supply and demand will drive the price up to match oil. Your transportation costs will stay the same and your home heating costs will go up.

    Reduce Global Warming? Nope. Still burning fossil fuels.

    Sustainable Energy? Nah. There’s about 980 billion barrels of oil left and the natural gas equivalent of about 1280 billion barrels of oil.

    Breaking our dependence on foreign oil? Nyet. The U.S. has less than 5% of the world’s natural gas.

    If Mr. Pickens can make money on CNG, then good for him. But he should not receive a huge public subsidy for a technology that won’t solve any problems at all.

  • Rick C

    Pathetic article hybridCars.com. CNG is a bridge technology that we need to get to energy independence. We especially need it for long haul vehicles where there is no renewable solution right now. I am very happy that companies like Walmart and UPS are considering ramping up their use of natural gas for their vehicles. Every long haul vehicle should be on natural gas in 10 years. This would kill 30% of our needs for gasoline and greatly reduce pollution.

    Picken’s making money is not a bad thing. I think he has proven through his gifts to universities that he is concerned with the next generation and our ability to solve our energy problems. He’s motives are only put into questions because he is typically seen as a conservative.

    And I don’t know how you guys can question his investment in wind farms.

    Come on HybridCars.com. You can do better reporting than this article.

  • ECD4ME

    I think you’re confused about supply and demand. We have lots of natural gas and big new fields to explore like the Marcellus shale in the northeast. increasing demand wont run up the price if supplies are adequate. Ramping up wind power can replace power generated by nat gas.
    Cars running on nat gas right now are running for about a dollar a gallon less than gasoline. And CNG burns cleanly. My point is that this can start making a difference right away. Fleets are already using CNG because they return every day to the depot and dont require “CNG stations”. Do you think its better to do as we are doing now and wait for several more years to see if battery electrics will become available and affordable? GM’s Volt is planned for 2010. How do you think they’ll sell that year or the year after? They’re still wrestling with the cost of the battery set. And the batteries arent yet projected to last 100,000 miles. Its and admirable goal and we’ll get there sooner or later, but we need to begin cutting oil consumption asap to help the atmosphere and most important the economy.

  • Anonymous

    I agree that the “he will make money” premise of the article is wrong, however.

    “CNG is a bridge technology that we need to get to energy independence.”

    I fail to see why it needs such substantial government help. If it’s so good, cheap, and ready to be implemented then it should already be competitive with relatively little effort. Many people are very skeptical of controversial energy plans with heavy government backing, such as the ethanol corn debacle. Read some of the posts above yours.

    “And I don’t know how you guys can question his investment in wind farms.”

    His wind farms are a cover for a water rights access and a land grab so he can build water pipelines.

    http://www.popularmechanics.com/science/earth/4275059.html

    “I think he has proven through his gifts to universities that he is concerned with the next generation and our ability to solve our energy problems.”

    When you are about to steal their water it helps PR greatly if you make big donations, less people question your actions. People like T. Boone use donations for political leverage, he could not care less about the next generation. T. Boone is a PR master, he was instrumental in the swift boating of John Kerry. Propaganda is his main tool and it looks like you fell for it hook line and sinker.

  • RKRB

    After examining the proposition articles, I fail to see how Prop 10 is a “Boondoggle” for Pickens, as the author of the article clearly states. Most money seems targeted for alternative energy, and would be allocated by the state agencies with proper authority, with oversight by the state and the voters.

    Are the self-proclaimed environmentalists now objecting to wind power simply because one person has heavy investments in it?? Then as a matter of integrity, they need to clearly state this, and as a matter of consistency they need to oppose all wind power (unless, somehow, Pickens could not profit from it). With the variety of wind power manufacturers available, I find it hard to believe that a single person could “control” wind power, as the article seems to imply.

    I have been a life member of the Sierra Club for over a decade, but this kind of activity is not supported by all members of the Club. The Sierra Club Board speaks for the Board, not directly for its members, and this should be clearly understood.

  • Samie

    Prop10
    “$2.9 billion in incentives of up to $50,000 toward purchases of certain high fuel economy and alternative fuel vehicles.”

    “Most of the $2.9 billion in incentives are targeted toward CNG vehicle purchasers—both private and commercial—but a $2,000 rebate would also help to offset the cost of any vehicle that exceeds 45 mpg in fuel efficiency.”

    I thought I would bring the facts into this. CNG is one of the major components to this legislation. I also don’t understand why cars that get 46mpgs should get a rebate. My question is why 46mpg??? If we can’t get beyond CNG (that is using it in small vehicles) and cars that get 46mpg as long term ideas we failed and those who love shiny things will get what they asked for.

    There are two issues:

    1. How do we power vehicles that need more torque and power. Right now we could look at CNG and biodiesel to help with this solution until something else like hydrogen or better electric systems come along.

    2. How do we power cars and small SUV’s? These vehicles don’t need to be replaced by another fuel though clean diesel is out there.
    Please when looking at both issues consider long-term implications

    I think reading the comments I would say that Dan L’s comments are right on. “The public’s goodwill for environmental change is converted to anger and mistrust at being scammed.
    It has happened before. Witness corn based Ethanol as a bio-fuel.”
    So true…

    You could even look at cellulose ethanol as a scam, if… we use waste stock great but if you grow crops for stock we get into all those problems with land resources and food issues. Sounds great but again look at the long-term problems of using fuel to replace fuel.

  • Samie

    Prop10
    “$2.9 billion in incentives of up to $50,000 toward purchases of certain high fuel economy and alternative fuel vehicles.”

    “Most of the $2.9 billion in incentives are targeted toward CNG vehicle purchasers—both private and commercial—but a $2,000 rebate would also help to offset the cost of any vehicle that exceeds 45 mpg in fuel efficiency.”

    I thought I would bring the facts into this. CNG is one of the major components to this legislation. I also don’t understand why cars that get 46mpgs should get a rebate. My question is why 46mpg??? If we can’t get beyond CNG (that is using it in small vehicles) and cars that get 46mpg as long term ideas we failed and those who love shiny things will get what they asked for.

    There are two issues:

    1. How do we power vehicles that need more torque and power. Right now we could look at CNG and biodiesel to help with this solution until something else like hydrogen or better electric systems come along.

    2. How do we power cars and small SUV’s? These vehicles don’t need to be replaced by another fuel though clean diesel is out there.
    Please when looking at both issues consider long-term implications

    I think reading the comments I would say that Dan L’s comments are right on. “The public’s goodwill for environmental change is converted to anger and mistrust at being scammed.
    It has happened before. Witness corn based Ethanol as a bio-fuel.”
    So true…

    You could even look at cellulose ethanol as a scam, if… we use waste stock great but if you grow crops for stock we get into all those problems with land resources and food issues. Sounds great but again look at the long-term problems of using fuel to replace fuel.

  • Samie

    Sorry about that!

  • Gerald Shields

    Heck it, I’m for anything that decreases our dependence on foreign oil. Besides, there’s plenty of options among CNG, Electric, and Hybrid technologies coming around. We should care less if Boone Pickens makes money and long as our use of Wind Power is increased.

  • Rick C

    To Anonymous:

    I generally agree that government subsidies are wrong, but there are times when an investment can jump start a much need initiative. Anything that we can do to lessen our burden of foreign oil we should do immediately. It would appear to me that Prop 10 gives the incentive to the car buyer not Pickens. Pickens will only (as he should) make money if they use his fueling stations. I assume these are not cheap to erect and he needs some momentum behind CNG cars before he can build them. If individuals don’t want to buy their CNG from the stations they can always buy the Phil device for their garage.

    Pickens and the other ranchers that Mesa Water represent own the rights to that land, they are not stealing the water. I know that you probably have a problem with people owning vast amount of land, but that is the reality. The other reality is that Dallas will have a serious water shortage in the future if the city continues to grow at the current pace. I don’t believe Mesa Water has found any buyers (North Texas cities) for their water and Mesa has postponed the right of way for the water pipeline so they can move forward on the power line transmission for the wind farm. Besides, many US cities pull water from aquifers today.

    I’m not trying to be an apologist for Pickens but I find it hard to recognize the PR in his many of his philanthropy efforts. See http://www.bizjournals.com/dallas/stories/2008/02/18/story6.html and http://www.dallasnews.com/sharedcontent/dws/news/localnews/stories/DN-ymca_21met.ART.State.Edition1.4ae2975.html just to name a few.

    If people make money on CNG so be it. Better for an American to make the money than some rich middle eastern country. PR is a tool that all entities use to advance their cause or business. Obviously you have been drinking the liberal cool aid for so long you hate anyone making money even when they are trying to solve a real problem.

  • Dan L

    CNG is NOT a solution to our foreign energy dependency. Even without this boondoggle, we in the US don’t have enough natural gas to support ourselves domestically for ten years.

    Perhaps some references will help clarify this point:

    The US has 3.4% of the world’s proven natural gas reserves. (BP)
    http://www.bp.com/sectiongenericarticle.do?categoryId=9023779&contentId=7044843

    The US is already consuming gas equal to 11% of our own proven reserves annually. (BP)
    http://www.bp.com/sectiongenericarticle.do?categoryId=9023781&contentId=7044478

    hubbertpeak.com is also a good source: http://www.hubbertpeak.com/gas/

  • Jacrom

    I tried to purchase a CNG vehicle in NJ and found the following:

    1. Not a single CNG station within the state of NJ, a state which prides itself on being environmentally progresssive,,, NJ does not have a single E85 station either… this is outrageous ! Natural gas lines exist all over the state IF someone ever intended on seriously opening a PUBLIC station for fueling (all are state owned or private). oquivej

    2. The PHIL unit was another $ 5,000.000 on top of the prove of the car… with little or no subsidies from the state or Feds, the cost would have been $55,000 ! Again, this is outragerous. IF Honda and others saw a market for these cars, prices would drop, and more would be sold… but not until the fueling issue is addressed. Why not take some of those profits from Exxon and create a fund to subsidize alt fuel purchases and fueling infrastructure ?

    3. When I wrote state officials asking then why no alternative fuel stations in NJ… my response was silence.

    THEREFORE:

    Mr Pickens has the right idea… we HAVE the natural gas, and there are many many like myself who would love to take advantage of it it it were made available. Clearly what is lacking is the political will to make widespread use of E85 or CNG a reality… if it takes individuals like Mr Pickens to make that a reality… so be it. If only NY/NJ politicians has some balls to to propose same…

  • Anonymous

    What is really interesting is to read all the comments about Mr Pickens. What’s the point? One commentary several days ago stated that Ford exploited the market, got people off horses and into cars AND he made a lot of money as a result. So? Yes, Pickens will probably make a lot of money but folks, he is 80 and as the old saying goes, “you can’t take it with you.” Is is so hard to believe that someone can actually be altruistic? That someone cannot actually be interested in the future of this country when they are gone? Another complaint that I read and heard on the 60 minute report is that he spent millions on the anti Kerry campaign. You guys say that as if it were a bad thing! Kerry, on camera, turned his back on this country and nothing he does will ever make up for that unless he moves to Vietnam.
    This country is fast going downhill thanks to all the entitlement programs out there first started by FDR, then LBJ and the likes of Barnie Frank lately. Why should we not reward someone who has a) the money and b) the wherewithall to put his money where his mouth is. One thing I do agree with is that this is a stop gap answer to foreign dependency. Govererment mandate costs? Eisenhower did that in the 50′s for the interstate highway system and yes it was designed to help defend the US.
    I spent two weeks in the bay area seeing customers and I did not see people using 880, 680 or 580 only for getting to or from a state line. A mandate will help transition this system into being. Personally, I would like to see hydrogen promoted.
    Edwin Black does not warrant any commentary. Liberal bias in California is causing enormous problems in that state due to its demand for entitlement programs for the poor, oppressed or illegal aliens. Someone down there should study Roman history!