Pickens Gives New Meaning to 'Self-Government'

Pickens Gives New Meaning to 'Self-Government'

July 31, 2008

The more you learn about T. Boone Pickens’ plan to switch America to
wind power, the more you realize that he seems willing to say and do
just about anything to make another billion or two.

This column previously discussed the plan’s technical and economic shortcomings and marketing ruses. Today, we’ll look into the diabolical machinations behind it.

Simply put, Pickens’ pitch is “embrace wind power to help break our
‘addiction’ to foreign oil.” There is, however, another intriguing
component to Pickens’ plan that goes unmentioned in his TV commercials,
media interviews and web site -- water rights, which he owns more of
than any other American.

Pickens hopes that his recent $100 million investment in 200,000
acres worth of groundwater rights in Roberts County, Texas, located
over the Ogallala Aquifer, will earn him $1 billion. But there’s more
to earning such a profit than simply acquiring the water. Rights-of-way
must be purchased to install pipelines, and opposition from
anti-development environmental groups must be overcome. Here’s where it
gets interesting, according to information compiled by the Water
Research Group, a small grassroots group focusing on local water issues
in Texas.

Purchasing rights-of-way is often expensive and time-consuming --
and what if landowners won’t sell? While private entities may be
frustrated, governments can exercise eminent domain to compel sales.
This is Pickens’ route of choice. But wait, you say, Pickens is not a
government entity. How can he use eminent domain? Are you sitting down?

At Pickens’ behest, the Texas legislature changed state law to allow
the two residents of an 8-acre parcel of land in Roberts County to vote
to create a municipal water district, a government agency with eminent
domain powers. Who were the voters? They were Pickens’ wife and the
manager of Pickens’ nearby ranch. And who sits on the board of
directors of this water district? They are the parcel’s three other
non-resident landowners, all Pickens’ employees.

A member of a local water conservation board told Bloomberg News
that, “[Pickens has] obtained the right of eminent domain like he was a
big city. It’s supposed to be for the public good, not a private
company.”

What’s this got to do with Pickens’ wind-power plan? Just as he
needs pipelines to sell his water, he also needs transmission lines to
sell his wind-generated power. Rights of way for transmission lines are
also acquired through eminent domain -- and, once again, the Texas
legislature has come to Pickens’ aid.

Earlier this year, Texas changed its law to allow renewable energy
projects (like Pickens’ wind farm) to obtain rights-of-way by
piggybacking on a water district’s eminent domain power. So Pickens can
now use his water district’s authority to also condemn land for his
future wind farm’s transmission lines.

Who will pay for the rights-of-way and the transmission lines and
pipelines? Thanks to another gift from Texas politicians, Pickens’
water district can sell tax-free, taxpayer-guaranteed municipal bonds
to finance the $2.2 billion cost of the water pipeline. And then
earlier this month, the Texas legislature voted to spend $4.93 billion
for wind farm transmission lines. While Pickens has denied that this
money is earmarked for him, he nevertheless is building the largest
wind farm in the world.

Despite this legislative largesse, a fly in the ointment remains.

Although Pickens hopes to sell as much as $165 million worth of
water annually to Dallas alone, no city in Texas has signed up yet --
partly because they don’t yet need the water and partly because of
resentment against water profiteering.

Enter the Sierra Club.

While Green groups support wind power, “the privatization of water
is an entirely different thing,” says the Sierra Club. Moreover, the
activist group has long opposed further exploitation of the very
groundwater Pickens wants to use -- the Ogallala Aquifer.

“The source of drinking water and irrigation for Plains residents
from Nebraska to Texas, the Ogallala Aquifer is one of the world's
largest -- as well as one of the most rapidly dissipating… If current
irrigation practices continue, agribusiness will deplete the Ogallala
Aquifer in the next century,” says the Sierra Club.

In March 2002, the Sierra Club opposed the construction of a
slaughterhouse in Pampa, Texas, because it would require a mere 275
million gallons per year from the Ogallala Aquifer. Yet Pickens wants
to sell 65 billion gallons of water per year -- to Dallas alone. In a
2004 lamentation about local government facilitation of Pickens’ plan
for the Ogallala, the Sierra Club slammed Pickens as a “junk bond
dealer” who wanted to make “Blue Gold” from the Ogallala.

But while the Sierra Club can’t seem to do anything about Pickens’
influence with state legislators, they do have enough influence to make
his water politically unpotable. This opposition may soon abate,
however, now that Pickens has buddied up with Sierra Club president
Carl Pope.

As noted last week, Pope now flies in Pickens’ private jet and
publicly lauds him. The two are newly-minted “friends,” since Pope
needs the famous Republican oilman to lend propaganda value to the
Sierra Club’s anti-oil agenda and Pickens needs Pope to ease up on the
Ogallala water opposition.

This alliance isn’t sitting well with everyone on the Left.

A TreeHugger.com writer recently observed, “… I am left asking
myself why the green media have neglected [the water] aspect of
Pickens’ wind-farm plans? Have we been so distracted by the prospect of
Texas’ renewable energy portfolio growing by 4000 megawatts that we are
willing to overlook some potentially dodgy aspects to the project?”

It shouldn’t sit well with the rest of us either. Pickens has gamed
Texas for his own ends, and now he’s trying to game the rest of us,
too. Worse, his gamesmanship includes lending his billionaire
resources, prominent stature and feudal powers bestowed upon him by the
Texas legislature to help the Greens gain control over the U.S. energy
supply.

Steven Milloy publishes JunkScience.com and DemandDebate.com. He is a junk science expert, and advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.