T. Boone Pickens: New Kind of Prairie Rustler
By Tom DeWeese (10/02/08)
Over the summer he was all the rage - a Texas oil billionaire ready to make a difference and get the U.S. off of foreign oil dependency. Pickens certainly advocates drilling more American oil, but also came up with a reasonable-sounding plan to make wind power a reality. "We're the Saudi Arabia of Wind," he said. Then he spent $58 million to sell the idea to the American people and to force pro-wind legislation through Congress.
People quickly responded to support his efforts. Environmentalists praised him. Pro- free market advocates have flocked to him, invited him to address their conferences and hailed him as a hero. That's the Public Relations story. It's not the whole story.
I've written many times of the dangers of Public/Private Partnerships (PPPs). This is corporations and governments joining forces in an unholy alliance to use government power and private money to take over such public entities as highways and water systems using eminent domain, non-compete clauses and profit guarantees. It's not free enterprise and it's not limited government. It's corporate fascism that creates government-sanctioned monopolies.
Pickens has developed a creative twist to the PPP model and now he plans to get rich with other people's water. Water? But most Americans thought his plan was about wind. It appears that the wind idea is a clever smokescreen to the real moneymaker.
Roberts County, Texas sits on top of the Ogallala Aquifer, a huge underground reservoir that stretches all the way to South Dakota. It so happens that T. Boone Pickens has a ranch in Roberts County and he set aside eight acres of that land for drilling into the aquifer.
Here comes the interesting part. Pickens turned those eight acres into a "town." To pull off that feat, Pickens needed a special change in Texas law to allow it. It's interesting to note that he made $1.2 million in contributions in 2006, apparently to the right legislators. Can't say for sure, but he did get his special privilege and a town was born on eight acres of the Pickens ranch, complete with two whole voters - both of whom happen to work for T. Boone Pickens. Then there was an election in the new town and the two voters agreed at the polls to make this eight-acre municipality a special fresh-water district.
Now Pickens' little town has all the power of any community. He can issue tax-free bonds (meaning he can borrow at a largely discounted rate), and he has the power of eminent domain, if he needs it. Why is that important? Pickens plans to run a pipeline for his water to the Dallas area where he will sell it. He also plans to use the same route for his wind power transmission lines.
To construct the pipeline he will have to cross a lot of private land. Those landowners will receive (if they haven't already) a letter from T. Boone Pickens explaining that he wants to buy some of their land. If they refuse he will simply use the power of eminent domain to take it.
Welcome to business in the 2000s. Just don't call it free enterprise, and don't call its perpetrators heroes. Judge Roy Bean would have strung Pickens up in the nearest tree. He knew a rustler when he saw one.
Tom DeWeese
(Printer friendly version) Email: Tom DeWeese
