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Former Oilman Makes Bid for Homegrown Alternative Energy

August 11, 2008 at 6:45 PM EST
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T. Boone Pickens, a Texan oil tycoon, has made it his mission to promote massive new investment toward alternative energy sources. Pickens discusses his plan and efforts to make energy independence a central issue in the fall campaign.
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RAY SUAREZ: A political conservative, a lifelong Republican, T. Boone Pickens first made his name and his fortune as an American oil man. His takeover bids during the 1980s earned him his reputation as a corporate raider to some, a shareholder activist to others.

Pickens became a billionaire and one of the wealthiest men in the world. In 2004, he financed the Swift Boat campaign against John Kerry’s presidential bid.

But in 2008, Pickens is capturing new attention for a very different cause in this election. He’s launched a major advertising campaign to pitch his plan to reduce America’s dependence on foreign oil.

Here’s a clip from one of his ads on the air in recent weeks.

T. BOONE PICKENS, Oil Executive: Did you know, back in 1970, we imported 24 percent of our oil and, by 1990, it was 42 percent? Today it’s almost 70 percent and climbing every minute.

Over $700 billion are leaving this country to foreign nations every year. That’s four times the cost of the Iraqi war, and it’s killing our economy. It’ll be the largest transfer of wealth in the history of mankind.

We don’t need any more talk. We need action, and we need a plan. And it’s got to be the top priority of the next president and the next Congress.

RAY SUAREZ: For more details about the plan and how T. Boone Pickens is hoping to change the political debate on energy, he joins us now. He’s in Dallas this evening.

Welcome, Mr. Pickens.

T. BOONE PICKENS: Thank you, Ray.

Using wind and solar energy

T. Boone Pickens
Oil Executive
I'd like to see the natural gas move out of power generation and that be replaced by wind and solar, and that natural gas moves in to the transportation fuel business, competing with foreign oil in gasoline and diesel.

RAY SUAREZ: Now, let's learn a little more about the basics of the plan, for those people who've just seen the spots. What are some of the details?

T. BOONE PICKENS: Well, details on the plan -- let me go into it this way. We're importing now almost 70 percent of all the oil we use every day in America. That, from a security standpoint, is totally unacceptable.

And when we look at the Russian-Georgian situation, it is related. And Russia has oil, and we don't. We have 3 percent of the oil in the world, and we're using 25 percent every day. So we only have 4 percent of the population.

The plan is that I want to use -- I want to bring in wind and solar. We have a beautiful wind corridor from Texas to Canada. And we have an equally beautiful solar corridor from Texas to California. Those can be brought in for power generation.

And we have plenty of natural gas in the United States. We have the equivalent of about 200 billion barrels of oil, which is equivalent of -- what the Saudis have in oil, we have in natural gas.

Well, natural gas is actually a better fuel than gasoline and diesel. It's cleaner; it's cheaper; it's abundant; and it's ours.

And I'd like to see the natural gas move out of power generation and that be replaced by wind and solar, and that natural gas moves in to the transportation fuel business, competing with foreign oil in gasoline and diesel.

That can be accomplished, and I think we could do it rather quickly. How much? I would say 30 percent -- we can take out 30 percent of our imports. And 38 percent of our oil comes from the Mideast and Africa, the unstable areas.

RAY SUAREZ: Well, let me jump in right there, because I understand that setting up those turbines to exploit that wind energy that's sweeping across the center of the United States would cost about a trillion dollars and modifying the grid to take up all that electricity that that wind would generate would cost about another $200 billion. Where are you going to get all that money?

T. BOONE PICKENS: All that will be done by the private sector. If you do a trillion dollars worth of turbines, you're going to actually generate 400,000 megawatts of power. And we presently use 987,000 megawatts in the United States. That's what our power is built out to is 987,000.

And it's overbuilt at that point, but you must have that when you have a real stress and surge on the system. But don't worry about the trillion dollars. That's not a government cost. That will be a private industry cost.

Pickens: Plan is easy sell

T. Boone Pickens
Oil Executive
We've done two town hall meetings, one in Topeka, Kansas. There was Lamar, Colorado. The house is filled an hour before I show up... Why are they there? They're there because they're concerned about energy.

RAY SUAREZ: Are you getting much response to the plan so far? And are you getting more of a response than you would have if oil was still $50 or $75 a barrel?

T. BOONE PICKENS: Well, I don't think you would if it was $50 or $75. You had to get it up higher for people to realize that we had a problem.

But what we've looked at -- we're pretty well convinced. We've done two town hall meetings, one in Topeka, Kansas. There was Lamar, Colorado. And it's over -- I mean, the house is filled an hour before I show up. And they have to turn away people for it.

Why are they there? They're there because they're concerned about energy. And they're starting to see that the $700 billion that we're paying for foreign oil, that money, a great part of it, could be kept in the United States, and create jobs, and make a profit here, and pay taxes, and make our economy go forward. But the $700 billion that we pay for foreign oil does nothing for our economy here.

RAY SUAREZ: A lot of the critiques that have appeared since you've begun to pitch your plan say, yes, wind energy, fantastic idea, let's go ahead and do it.

But the second phase of diverting the natural gas that we have here in the United States and putting it into transportation doesn't get that same kind of response. People point out that natural gas is a much more efficient generator of electricity than it is the fuel for a personal automobile.

T. BOONE PICKENS: Well, I don't agree with that, but we have plenty of natural gas to do both. And it would be a long time for you to move the natural gas out of power generation. It would take probably five years for it to come out.

And so -- but the only thing that you have in America -- you have only one resource that will reduce foreign oil, and that is natural gas. It's the only resource we have that will replace gasoline and diesel.

Transition plan is staggering

T. Boone Pickens
Oil Executive
I've had enough paydays, and that's fine to say that. But the wind, I feel like I'm a pioneer by committing to $10 billion wind project... So don't worry about what I make out of the deal.

RAY SUAREZ: But instead of building a national grid for distributing natural gas as a fuel to personal transportation, wouldn't it make more sense to keep making electricity with it and just have people plug in their cars?

T. BOONE PICKENS: Well, I love the plug-in. That's fine with me. But you can't get to any numbers that way.

The other day, somebody said, "We'll have a million cars on the plug-in hybrid in 10 years." We have 250 million cars in the United States, so you can't get to -- a million cars isn't going to do anything for us.

What I want to do is get the natural gas into the transportation fuel and then we take out the trucks, is where it needs to go, not the personal cars. And so the infrastructure to do that -- see, it costs -- about 30 percent of our transportation fuel goes to move goods every day in the United States, and those are the trucks that are moving the goods. So those are the ones that I want to get on natural gas.

RAY SUAREZ: Well, as someone who's heavily invested in both wind and natural gas, don't you stand to also see a pretty good payday if this plan is accepted?

T. BOONE PICKENS: Well, I've had enough paydays, and that's fine to say that. But the wind, I feel like I'm a pioneer by committing to $10 billion wind project.

And front seat means nothing in the wind business, because the wind corridor from Texas to Canada will accommodate any number of players in it. My project is 4,000 megawatts. I believe that corridor could easily handle 400,000 megawatts.

And so, you know, I've given in the last five years over $700 million, and my estate will go to charity. So don't worry about what I make out of the deal. When I'm -- you know, I'll create jobs. And if I make profits, I'll pay taxes.

But that doesn't have anything to do with this. This is a security for America. And that's what this is all about.

RAY SUAREZ: Mr. Pickens, thanks for joining us this evening.

T. BOONE PICKENS: Sure.