Archive for the ‘Pickens’ Category

More on Boone Pickens and power regulation in Texas: in which I test whether Rob Bradley/Master Resource is still blocking my posts

April 25th, 2009 No comments

Here`s Bradley`s post, A Texas-Sized Energy Problem: Republicans, Democrats, and ‘Baptists & Bootleggers’ Running Wild in the Lone Star State (Obama sends his thanks).  I left a short note wondering how Bradley could have made it through a generally observant post without referring to all of the sweet deals that Boone Pickens managed to buy from the thoroughly Republican Texas legislature; it`s also a puzzle why he didn`t call for public utility deregulation.

Rob banned me from his blog 6 weeks back; I`m checking to see if he`s reconsidered.

Here`s the comment I left:

TokyoTom { 04.25.09 at 1:43 pm }

Rob, why not go the extra step and identify Boone Pickens as the chief bootlegger, and the shameful way that the Republican legislature let him buy rights of eminent domain?

Steve Milloy has also written astutely on this.

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More on Pickens: FOX offers soapbox for Pickens mouthpiece; Milloy responds

September 26th, 2008 No comments

FOX offers soapbox for Pickens mouthpiece Warren Mitchell (former chairman of Southern California Gas Company and San Diego Gas & Electric, and director and head of the compensation committee of Pickens’ owned Clean Energy Fuels); Steven Milloy responds.

Keep up the good work, Steve!

Some of my own thoughts on Pickens’ actions are here and here.

Pickens, with "a mission" as a wind crusader, shakes John Kerry’s hand

September 2nd, 2008 No comments

More from the National Review‘s “Planet Gore” corner.

My reaction?  While we do need investments in power transmission infrastructuredo it with your own money, T. Boone.

While I, along with many others, could support a rebated carbon tax that would spur investments in energy efficiency and in GHG-lite technologies, we certainly don’t need the government to be picking and choosing technologies, a la synfuels, ethanol or “clean coal”.  But there probably is a role for the federal government in encouraging the states to deregulate local power generation and transmission (and to take other actions that encourage capital investments, such as allowing immediate depreciation).


More carbon tax advocacy, this time from Jerry Taylor/Cato, in a piece criticizing Pickens’ plan

July 30th, 2008 3 comments

Jerry Taylor, a senior fellow at the Cato Institute, published a pithy criticism in last week’s Financial Post of T. Boone Pickens’ plan to get wind subsidies and other favors from Congress;  said Taylor:  “Virtually every claim made by T. Boone Pickens to justify the lavish subsidies he is seeking for his wind energy investments is flat wrong.”

Jerry also had a few interesting things to say about about carbon taxes:

Fourth, if reducing our carbon footprint is the goal, then the most direct and efficient means of reducing that footprint is to impose a tax on carbon emissions and then leave it to the market to sort out how to most efficiently order affairs under those new prices. Maybe it will mean windmills and CNG [compressed natural gas], but maybe not. Perhaps it will mean more nuclear power, new hydrogen-powered fuel cells, “clean” coal, the emergence of cellulosic ethanol, battery-powered cars or hybrids — or a continuation of the existing energy base but less consumption as a consequence.

(emphasis added)

I agree with Jerry, but note that Jerry he has not explicitly accepted that reducing our carbon footprint SHOULD be a goal.  Rather, he has simply concluded that, should such a goal be adopted,  that carbon taxes are the best policy tool.  And that might be as much as we can expect, from the time being, from a long-time advocate of limited government such as Jerry.

Jerry Taylor joins Ron Bailey (Reason), George Will, AEI and a long list of others in favoring carbon taxes over any other AGW-directed policies.


Bootleggers and Baptists in Texas and DC: Texas sells Pickens eminent domain powers and wind power transmission rights for his personal 8-acre "water district", while Sierra Club helps to push wind subsidies

July 30th, 2008 2 comments

[Update:  David Zetland at his Aquanomics blog has linked to my piece, astutely noting that if one applies Bruce Yandle`s “Bootleggers and Baptists” metaphor to Pickens’ campaign for wind power and transmission subsidies, Pickens as Bootlegger now has the Sierra Club (as the Baptists) dancing to his tune.  I`ve updated my title accordingly.]

I previously reported on T. Boone Pickens’ plan to suck down half of the water from that part of the Ogallala aquifer that underlies the Texas Panhandle, sell it to Dallas and put the money in his pocket – other users of the aquifer be damned.  Pickens’ has subsequently launched a publicity blitz to get the federal government to subsidize his wind farm power scheme.

It’s now becoming clear how Pickens’ water plan and wind plan are tied together, greased by corrupt Republican legislators in Texas and the apparent willingness of environmentalist leaders – anxious for “clean” energy, to turn a blind eye to Pickens’ water plan.

First, let me note that Pickens and the Republican-dominated Texas legislature have just put on a marvelous display of how government, in Texas at least, is by the rich and for the rich, who are allowed to ride roughshod over the “property rights” of others.  

Last year the Texas legislature, greased by $1.2 million in campaign contributions by Pickens over the previous election cycle, modified its laws who can create a “fresh water supply district” that has powers of eminent domain – powers to forcibly take land from others –  and authorized such water districts to use their rights of way to carry power transmission lines.  Such water districts are authorized to raise cheap money by issuing tax-exempt bonds.  By securing rule changes in his favor, a Pickens-controlled district covering eight acres in the Panhandle acquired the power to issue tax-exempt bonds and to condemn private land for a pipeline and power transmission lines all the way to Dallas.  In Texas, money talks and money rules – and “property rights” means nothing more than the right to collect reasonable value in compensation for what the rich want to take from you.  According to one report,

Going into the 2006 election that preceded this legislative fix, Pickens personally contributed $1.2 million to state candidates and political committees. Recipients of his largesse included each of the 16 senators who faced election in 2006 and one third of the 150-member House. Republicans received 94 percent of all the money that Pickens doled out to state candidates.

Promptly upon the changes in law, Pickens deeded eight acres in Roberts County to five of his employees – two of them the only residents/locally-registered voters within the parcel – to form a water district, which was then approved by Roberts County last November.  Before the change in law, as reported by Business Week, “a district’s five elected supervisors needed to be registered voters living within the boundaries of the district. Now, they only had to own land in the district; they could live and vote wherever.”   In the past, petitions to create a water district required the support of a majority of the registered voters within the proposed district’s borders; the recent changes allow a district to be formed with the backing of whoever owns the majority of the appraised land value within its proposed borders.

As further reported by Business Week,

On Nov. 6, Roberts County held an election to decide whether to form the new district. Only two people were qualified to take part: Alton and Lu Boone [the couple who manage the Pickens’ ranch from which the eight acres were sold]. The vote was unanimous. With that, Pickens won the right to issue tax-free bonds for his pipeline and electrical lines as well as the extraordinary power to claim land across swaths of the state.

The water district also approved “$101 million in revenue bonds to acquire the rights-of-way through up to 12 counties for delivering water and wind-generated electricity.”  Earlier this years, the new water district and Mesa Power (Pickens’ power company) together sent letters to about 1,100 landowners along part of the proposed 320-mile path through 11 Panhandle and Central Texas counties, telling them their “property may be affected” as the water district obtains rights of way for construction of the underground pipeline and aboveground electrical transmission lines, and hosted a number of public meetings telling landowners in Pickens’ way how “fair” Pickens wants to be with them as he lays pipe and power lines across 250 foot swathes of their land.

Construction of the pipeline and transmission lines is expected to begin in 2009, to the tune of roughly $2 billion each.  Pickens is set to spend $12 billion on the world’s largest wind farm in the Texas panhandle, while he expects his water investment in the area — around a $100 million so far – will earn him about $1 billion.

A second, and interesting, aspect of Pickens’ development plans is that Pickens has seemed to have found a way to buy off environmental opposition to his unsustainable, get-rich-quick-at-the-expense-of-others water mining scheme by combining it with an aggressive development of wind power – also turning environmentalists into a foil for his bid for public subsidies for wind power.  Carl Pope, executive for the Sierra Club – which has for the past few years prominently opposed Pickens’ Ogallala reservoir development plans – now jets about with Pickens and lauds him as his new “friend”; Pickens, says Pope, “is out to save America.”  It’s just that Pickens is going to need the help of government and taxpayers: “How to recruit the necessary public support? This would take, it seems to me, a government mandate to get the distribution network in place. … Pickens says he has a game plan, and will announce it next week.”

We obviously need big ideas and big investments, both to deal with water shortages and to replace dirty and GHG emitting energy usage; Pickens’ plans may offer us a way forward.  But we definitely don’t need developers like Pickens using government to force these projects down our throats (and misusing government authority to take property from unconsenting landowners) or to get public subsidies.  Let his plans stand on their own two feet, and let him (and the Sierra Club) keep his hands off of my wallet.  I am also not in favor of water plans that accelerate a race to draw down shared but unowned resources – has the Sierra Club really changed it’s stance on this?

Pickens, the Republicans in Texas and the Sierra Club should all be ashamed of their behavior.

h/t Steven Milloy (it is a bit interesting that FOX, which was a big fan of Pickens when he funded the Swift Boaters, seems to be turning aginst him now.)

T. Boone Pickens accelerates the tragedy of the Western water commons – by connecting thirsty markets to unowned, common-pool resources

June 16th, 2008 No comments

The latest Business Week magazine sports the headline, “Is Water the New Oil?” and a caricature of T. Boone Pickens.  The cover story -“There Will Be Water: T. Boone Pickens thinks water is the new oil—and he’s betting $100 million that he’s right” – describes Pickens’ plans to ship water to eager consumers in Dallas from his ranch and other water rights holdings in the Texas Panhandle region. 

While I’m all for water markets, there’s one small problem that deserves attention:  essentially Pickens will simply be sticking a huge straw into the unowned Ogallala Aquifer and pumping for all he’s worth.  Pickens will have to cover only his own costs (pumping and transportation), but he has no ownership stake in, or incentive to invest in maintaining or sustainably using, water resource itself.  As he draws down the water table, his neighbors will have to shell out more to dig and pump from deeper wells to maintain their own current draws, and if any of them wants to follow Pickens in shipping water to urban markets, then the race to drain the water commons in the Panhandle and other parts of the Ogallala will ratchet up further (it’s already been underway for many years in other parts of Texas and other states in which the Ogallala Aquifer lies).

Pickens may not be planning to replicate the history of the wasteful, competitive pumping of the East Texas common pool oil resources (also seen in the elimination of the passenger pigeon, the Plains bison, the great whales, and the crashing of ocean fisheries), but his own rational self interest is surely leading in that direction.  I hope Pickens can see where this is headed and take a positive role in heading off a destructive tragedy of the commons, which may be in the cards, but is not inevitable.   As Bruce Yandle has noted:

People can build institutions that take the edge off frantic commons behavior. People have unwritten and written constitutions that help to establish social order. People can and do accumulate wealth. People communicate, invent lines of kinship, and develop customs, traditions, and rules of law that limit anti-social behavior. People define, enforce, and trade property rights. People can and do avoid the tragedy of the commons. Indeed, instead of living with tragedies, people triumph over the commons. But the triumphs are never perfect or complete. There is always another commons to manage. …

At very low levels of income, what might be called stage one, human beings cannot afford to do much about property-rights enforcement and the commons. They live in a world where custom and tradition sustain them. As incomes rise and losses from the commons expand, stage two is entered. Fences go up, and rules are set for protecting the commons. Finally, in stage three, markets evolve along with rules of law that define spheres of private and public action. Private rights replace public control, and the triumph replaces the tragedy of the commons.

Life for mankind began on a commons where tragedies were commonplace and the incentive to improve was powerful. Out of the struggle to survive and accumulate wealth evolved markets, property rights, and the rule of law—a triumph on the commons. …

Human beings can and do avoid the tragedy of the commons. But doing so requires property rights and markets, which must be defended if the triumph is to continue.

Easy pickins?  Easy, Pickens.

h/t David Zetland