Remember T. Boone Pickens? In September, I wrote a flattering cover story (“ There Will Be Boone”) on the Dallas billionaire and his plan to break America’s dependence off foreign oil. Basically, I gushed—and gushed.
Actually, back then, just about everyone in the media was gushing over Boone. With his newly published memoir and his $65 million advertising campaign to promote wind energy and natural-gas fueled automobiles, he was a genuine media sensation. On top of that, his energy-oriented hedge fund was raking in hundreds of millions of dollars in profits, leading some Wall Street experts to call him a financial genius. At the age of eighty, he was on top of his game.
Uh-oh. Since my article was published, Boone has been taking a shellacking. To begin with, he has taken a huge financial hit as the price of oil has collapsed. Since its peak in June, Pickens’s hedge fund has lost $2 billion, about sixty percent of its value, leading half of the funds’ investors to withdraw their money.
In fairness to Boone, he did voluntarily change his fund’s rules so that investors could make the withdrawals whenever they wanted, knowing they were in a financial crunch. Still, the fund only has an estimated $400 million to $500 million left—a paltry number by Pickens standards. And some of the Wall Street experts who once praised Boone as a wizard now say Boone has lost his credibility because he foolishly remained too bullish on oil, even as the market continued to slide.
But that’s not all. When I first wrote about the Pickens Plan, as it now known, he was putting his money where his mouth was, declaring that he was going to build a giant 2,700-turbine wind farm in West Texas costing upward of $10 billion. The nation’s credit crunch has gutted the wind project’s financing, putting the whole project temporarily on hold. (Boone insists he’s not giving up on it.) He’s also delayed work on a state permit to build 170 miles of transmission lines from West Texas that would carry enough wind energy to power 300,000 homes. “For now,” Boone told one reporter, “the wind stuff is deader than hell.”
In fact, the whole Pickens Plan has lost some of its initial traction. In November, California voters resoundingly defeated a ballot measure he supported to put $5 billion in bond money into promoting natural-gas vehicles in the Golden State. (Pickens’s own company, Clean Energy Fuels Corp., the country’s largest owner of natural-gas filling stations, sponsored the plan and put up $19 million to back it.) What’s more, automakers have simply refused to embrace the idea of natural gas-powered cars. They are focused on building cars that run on electric power. Meanwhile, more skeptics have emerged to blast away at Pickens’ wind energy proposal. They insist, for instance, that the cost of transmitting electricity from Boone’s proposed windmill farms in the Midwest to the current power grid would be ridiculously prohibitive.
What has taken most of the steam out of the Pickens Plan, of course, is the simple fact that a lot of people have stopped caring. When Boone launched the Pickens Plan in July, crude oil was at $136 a barrel and rising. Now, with crude at or below $40 a barrel,