Wednesday, July 09, 2008

T. Boone Pickens, Blowin’ in the Wind

“Wind power is ... clean, it's renewable. It's everything you want. And it's a stable supply of energy,” Pickens told CNN in May. “It's unbelievable that we have not done more with wind.”

—T. Boone Pickens, quoted by CNBC, July 8, 2008

He’s back.

T. Boone Pickens is back and on a TV set near you, touting “The Pickens Plan” to get America off its “dangerous reliance on foreign oil.”

His solution? Boone wants us to use less oil and gas, and more renewable stuff, like wind.

Grey-hairs like us still remember Boone as the man who shook up the oil industry during a fertile and, for many investors, highly profitable stretch in the early-to-mid 1980s, by putting what seemed like every company incorporated in Texas in play and then letting some other company actually buy them.

His own particular company, Mesa Petroleum, ended badly, the victim of collapsing oil prices and a habit of paying most of his profits—and then some—out in dividends. Boone eventually lost control of Mesa, although his dividend-paying habit outlived his tenure. It was, unfortunately, copied by many other companies that are now mightily regretting it.

(For an excellent look back on Pickens in his prime, as well as many other topics worth remembering, pick up ace New York Times columnist Joe Nocera’s recently published “Good Guys and Bad Guys.”)

After losing Mesa, Boone picked himself up, dusted himself off, and started a hedge fund that made billions out of good old fashioned oil and gas speculation. Give him all the credit he deserves: he bought very low, sold very high, and made his fortune back...and more.

But it's still worth remembering that, like all speculators, Boone doesn’t hesitate to ‘talk his book.’ It wasn’t too long ago, after all, that the same T. Boone Pickens who is now talking up wind power was talking it down.

And thanks to a sharp-eyed reader, we will quote the man himself:

“I was in wind energy for a minute…. I hate it. And when I got to looking at those damn things I said, I don't want to be a part of putting that on the horizon. I think it's homely and I don't like it. We took a loss and got out of it and I'm glad I did.”

—T. Boone Pickens, Bloomberg, February 17, 2005

T. Boone is back. What a $100 a barrel move in crude won't do.

Jeff Matthews
I Am Not Making This Up

© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.


Nicolas said...


Up here in Quebec we are restricting wind power to less than 10% of overall energy supply, because its too variable... don't get me wrong wind is great, but it ebbs and flows. We can afford 10% because 90% of our electricity is generated by Hydro, the most versatile source of electricity (it can be shut down and started up within minutes -- not the case for Coal, NG or Nuclear power). I heard that in Europe it is even lower (4-6%).

We also have one of the most modern power distribution system in North America, whereas in the US your power distribution system is... in need of upgrade.

Mr. Pickens is self serving and over simplifying the problem. By the way, my guess is that $4/5 dollar gas will do wonder to the US energy distribution/conservation system.

By the way, wind today contributes less than 1% of total electricity in Quebec, and we are hoping that it will grow to 4% by 2015 -- our wind farms are having a hard time getting turbines, there's a shortage

Jeff Matthews said...

Thank you, Nicolas. An excellent review of the situation.

Also, it was very polite of you to restrain your review of the U.S. power distribution infrastructure. Our infrastructure is, in truth, appalling. Credit the same political system that is now blaming high oil prices on speculators, as opposed to craven politicians who squashed conservation measures when oil prices were low, rejected nuclear power out of hand after Three Mile Island, and invested in roads rather than rail.


P.S. Apologies for the weird way in which Google is displaying the blog. This happened once before. No idea why, or how it gets fixed.

Khyron said...


I get the argument here, but isn't what Boone has done (in this case) one of the signs of a person who has the ability to be successful?

Not disagreeing with you at all, just making a comment.

Nevi said...

Sir, I tried contacting Mr Pickens via BP,and Clean Energy - zero response.

With the current energy crisis escalating, I've come up with a flexible concept to sustain the cyclic generation of power on a continual, daily basis, that will systematically reduce dependance on gas, and is only limited by the ability of the implementation to store and distribute the generated power. Technically, as installations increase so does the power generation. The flexibility of it is, with differing models based on the same concept , it becomes applicable in numerous generation points , and if all generated power is cumulatively channeled , then the spinoffs become tremendous.

It creates new jobs, new developments, and new possibilities in the forms of electrical topup stations as opposed to gas stations etc. Full longterm implementation can reduce gas( petrol) use by approx 30- 70% over time, and in strategic places, up to 90% fact if I think about it, in certain places gas may not even be necessary. It will however still be important for lubricants etc..but not to the extent of having to fill up a tank every few days in the domestic vehicles. Short term, simple models provide immediate and everyday renewable power . It also provides for high level refinement of the concept in technology departments. It will significantly reduce the need for biofuels, which also affect the food crisis

If reducing your $700 billion oil imports concerns you, then let me know.

If someone can get Mr Pickens to actually check correspondences, will be great:)