Boone Pickens
The 77-year-old iconic Dallas bidnessman on oil and water, making tons of money late in life, and sticking up for the little guy.
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What do you do in a case like that?
Stir it up. Stir it up for our side. Let everyone know what’s happening. The scariest thing for any oilman who goes out to buy a lease is finding out that the landowners are in communication and informed about what’s going on. That’s why we put out a Roberts County letter; we get it out at least once a month. We don’t try to influence them one way or another. We just give them the facts.
What about your plans for selling the water?
We have export permits. We can move it anyplace we want to, and we’ve offered it to West Texas. We’ll build a line from Roberts County down—we’ll lay in the right-of-way of the CRMWA [Canadian River Municipal Water Authority] line. See, CRMWA has a line that extends from up here to Lake Meredith to Lamesa, which is 322 miles. It was built in 1968, which people here don’t know or have forgotten about or whatever. So this line we’re going to build is 322 miles long.
Anyone making noise about that?
Well, there are locals who say, “Oh, he’s stealing our water,” or some bullshit like that. There are people who believe that water is like air, that it belongs to everybody. But that’s not so. The groundwater belongs to the surface. Anyway, if you are going to make any money for these landowners, then you have to sell some water.
How do you get the line built?
We’ve come up with a plan. I got up in front of a Senate natural-resources committee meeting in Amarillo recently. The room was crowded. We said, “This is a proposed line—engineered, ready to go.” Could I get somebody to talk to me about it? Could I get somebody to explore the idea with me? I never got one damn call, and the locals just sit there complaining like hell. Why didn’t they just call and say, “Hey, let’s talk about how this can be accomplished”? Nothing. Zero.
And the reason is…?
Oh, I don’t know. I think more than anything it’s that they don’t really know for sure what you’re talking about, and they don’t want to dig into it. I think they’re just lethargic. Nothing happens up there.
Does the state’s water policy figure in this at all? Do you think the current laws on the books are fair?
We are in good shape in terms of what the state law says. Unfortunately, there are 89 groundwater districts scattered around the state, and they do not all administer water the same. Some of them have adopted rules that make it impossible to export water as opposed to using it locally. In some other cases, even if they permit the exporting of water, they permit it only for use by farmers or big landowners. So there hasn’t been equal treatment. We’re working the Legislature right now to firm up the statutory underpinnings for all owners of groundwater to be treated equally. Let me tell you, where you will always see us is on the side of everybody getting treated the same. I’m not asking for anything more than what’s already been given to the city of Amarillo or to CRMWA. I want the same thing, and I want to see the rest of the landowners get the same thing.
I’m sitting here wondering how we got to this point—where water is such a commodity. Or maybe I should be asking why it took so long for somebody like you to figure out how to put a price on it.
You know, Texas hasn’t had the problem that California and Colorado and places out west have had; they’ve been dealing with this for the last twenty years. It hasn’t been an issue here until now. Certainly nobody thought about water having any value.
Can we switch over from your current obsession to your previous one? What do you think the price of oil is going to be this time next year?
On April 29, 2003, I said it would be at $30 by the end of the year. It closed at $25.24 that day, and about six weeks later it crossed $30. Then in May of last year, I said it would be $50 before $30—it would get up to $50 before it went back down to $30. That was a piece of cake. Then right at the end of last year, I said $60 before $40. When it dropped down to $40.50, I got a call from the New York Times. And I said, “I may be like the guy who fell off the ten-story building and then, when he went by the fifth floor, said, ‘Well, I’m not dead yet.’” It went down to $40.40, but it came back up. And I got a call this morning at six-thirty from a trader who said that on access trading they finally hit $60.
Amazing.
So you want to know about this time next year? If I get pinned down, I’m gonna say $70 before $50. [Editor’s note: The price of oil fell below $50 on April 29.]
Why do you think oil is going up like this? Is it inevitable, the times we live in, or will it come back down to a normal place? Or maybe this is the new normal.
This is the new normal. You’ll never see oil below $45 unless it’s a very brief spike down.
What about drilling in Alaska? Is that going to solve the problem by reducing our reliance on foreign oil?
I don’t care what you do in Alaska. From Alaska south you have a pipeline that holds 2 million barrels a day. Think about that for a minute. We import more than 11 million barrels a day. You think Alaska’s gonna fix that? All you have is a capacity of 2 million barrels in that line. So when people say, “Why don’t we just open up Alaska and fix all our problems?” I’m like, “What are you talking about?”
Are you saying you’re against drilling in Alaska?
I think the people of Alaska should be allowed to do what they want. As far as destroying the Arctic coastal plains, drilling isn’t about to do that. I’m an environmentalist. I’ve been over ANWR [the Arctic National Wildlife Refuge] in a helicopter; I was there for the caribou migration. You’re not gonna mess up anything up there. The damage will be minimal. But my point is, it isn’t gonna fix anything.
Is there anything we can do, leaving Alaska aside?
Well, what you could do is go ahead and start to take natural gas to a higher use. It can compete with gasoline and diesel. It’s domestic. It’s clean. In California, natural gas will put you in the HOV lane with single occupancy! If we had that here, I’d get a natural-gas-powered car. You could also start to develop the oil shale on the western slope of Colorado. No question, there is a tremendous amount of oil in the shale out there.
Let me ask a few questions about you. The most interesting thing I’ve read about you is that you’ve made more money since you turned seventy than you made in all the years before. And those were some years before.
And that’s making it. It isn’t like I liquidated some big stock position. What my tax man said when I paid my taxes in April 2004 was that I’ve paid 75 percent of all the taxes I’ve ever paid since I turned seventy. And I wasn’t a dog taxpayer before that.
Pretty amazing.
It is amazing. Somebody said, “Do you feel like it’s bragging?” and I said, “At my age? I don’t think so.”
Is it true that you made the Forbes 400 this year for the first time?
For the first time. Not bad.
An overnight success in your mid-seventies.
All the time people tell me, “I’m as smart as you. Why’d you get to make this money?” One thing was, I stayed current.
What do you mean?
Well, they played a lot more golf than I did, and gin rummy in the afternoon. I mean that they slowed down and I didn’t. My God, I’ve been in the business since 1951.
If you can’t do it by now…Right?
Right. There’s a place in there where you peak, but when does that peak occur? Is it when you’re fifty, sixty, seventy, eighty? I don’t know. But I don’t think I’ve reached my peak yet.
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