T. Boone Pickens Explains His Plan

This is a dude... about as “man” as you can get in my opinion. His ideas seem to work and if anything, if we did go to wind/solar/natural gas power, we would be off of foreign oil and the Muslim nations will be back to camel ridding.

By Timothy P. Carney
Examiner Columnist | 8/21/08 7:10 PM

Texas oil billionaire T. Boone Pickens is about to make a killing by selling water he doesn't own. As he does it, it will be praised as a planet-friendly wind project. After he pulls it off, the media will deride it as craven capitalism. In truth, it is one the most audacious examples of politics for profit, showing how big government helps the biggest business steal from the rest of us. The plotline behind Pickens' water-and-wind scheme is almost too rich to believe. If it were a movie script, reviewers would dismiss it as over-the-top.

The basic story amounts to this: Pickens, thanks to favors from state lawmakers whose campaigns he funded, has created a new government whose only voters are two of his employers; this has empowered Pickens to more cheaply pump water from an aquifer and, by use of eminent domain, seize land across 11 counties in order to pipe the water to Dallas. To win environmentalist approval of this hardly "sustainable" practice, he has piggybacked this water project onto a windmill project pitched as an alternative to oil.

Pickens' scheme is a perfect demonstration of why it's worth asking cui bono — who benefits — from regulatory and environmental initiatives. Last week, this column pointed out that Pickens, before his current lobbying blitz for increased federal support of wind power, built the largest wind farm in the world.

I received dozens of responses from environmentalists and Pickens fans objecting to my implication that Pickens' profit from expanding wind subsidies ought to cast suspicion on his call for more wind subsidies. "Why should I care if someone's getting rich?" was the general gist, "windmills are good, and we need more of them."

This objection is grounded in a good instinct: The profit motive, far from being evil, is the driving force behind most of our society's advances. But, especially when it comes to government plans involving your tax dollars, asking cui bono helps us unearth less desirable aspects of the scheme.

Amid all the hype Pickens' windmill plan has gotten, the interesting part — the water part — has been mostly ignored, except for an excellent Business Week story by Susan Berfield and a column by Steve Milloy.

Roberts County, Texas, sits atop the Ogallala Aquifer, a huge underground reservoir that stretches all the way to South Dakota. It's in Roberts County that T. Boone Pickens set aside eight acres from his ranch for drilling deep into the aquifer.

Then he turned this parcel into a town, basically, with only two eligible voters — both of whom were his employees. (This required a change in Texas law in 2007 — a change facilitated no doubt by his $1.2 million in campaign contributions to Texas legislators in 2006).
Then there was an election in this district, in which both voters voted to make this 8-acre municipality a special fresh-water district.

Pickens' wholly owned government entity now can issue tax-free bonds (meaning he can borrow at a serious discount) and use the power of eminent domain to pressure landowners to sell — or to take their land if they hold out. The eminent domain power is key to building the pipeline that will run this water down to the Dallas area, where Pickens hopes to sell the water. If your land lies in the path of his proposed pipeline, you got a letter explaining that T. Boone wants to buy a stretch of your land — and explaining that he can use eminent domain if you resist. If this begins to sound too cutthroat to the public, Pickens just reminds journalists and politicians that following this water pipeline will be the transmission cables for Pickens' mammoth wind farm.

Are you really going to side with some greedy holdout ranchers over the future of green power? Sure enough, the Sierra Club is now rallying behind this whole scheme.

Nobody owns the aquifer — that would be too capitalist, of course — but in Texas, whoever has the water beneath his land can pump as much as he wants. The limits on this are usually pumping capacity (which requires money) and ability to sell it (which requires, among other things, pipelines). Pickens has cleared those hurdles, and now he can drain the aquifer faster than anyone ever before, future generations and other water users be damned.

This is why, when presented with some big government program, it's worthwhile to ask who's getting rich — because you may find something interesting when you look below the surface.

Examiner Columnist Timothy P. Carney is editor of the Evans-Novak Political Report. His Examiner Column appears on Fridays.