T. Boone Pickens Speaks: Water Is The New Oil

Imagine an 80-year old Oklahoman-turned-Texas oilman starring in a movie, There Will Be Water.

Not too far fetched, actually.

T. Boone Pickens thinks water is the new oil. Here's the cover story from the 23 June 2008 issue of BusinessWeek. The artwork is from the magazine.

Pickens was a so-called "corporate raider" (he prefers the term "shareholder activist") in the 1970s and 1980s when he and his company, Mesa Petroleum, took on the "big boys" like Gulf Oil and Unocal.

He was one of the major financial backers of the Swift Boat Veterans for Truth group.

But oil is a thing of the past for Pickens; the article claims he is now the largest single individual owner of water rights in the USA. He owns a huge ranch in Roberts County, TX, and would like to pump ground water from the Ogallala aquifer beneath his ranch and sell it to thirsty Texas cities.

How much? Try 200,000 acre-feet per year. He can pump this much because of Texas' quaint ground water law, "the right of capture", aka "The Law of the Biggest Pump." If you own land, you can sink a well and pump virtually to your heart's content. Doesn't matter whether you own one acre or 68,000, the size of Pickens' ranch.

Pickens claims he is pumping in "self-defense"; if he doesn't, someone else will pump his water from underneath him. So he might as well sell the water.

But so far, none has taken him up on his offer. He thinks that the Dallas-Fort Worth area is a potential buyer - not now, but eventually. Before he can sell his water he needs to construct a 250-mile long pipeline. The article describes how how will accomplish this. Fascinating.

I remember when I was in New Mexico. Eastern New Mexico was rife with rumors that Pickens' people were running around trying to buy water rights.

I've heard Pickens speak twice, both at conferences: July 2002 in Traverse City, MI, and April 2005, at the inaugural Ground Water Summit in San Antonio. He was trying to peddle his water to San Antonio, but the city was not interested - at least not at the price he was asking.

I had actually invited him to keynote the San Antonio conference and it was fitting: our first Summit, in Texas, in a place reliant on ground water, during a time when Pickens was hawking his water.

Pickens is a cross between a "good ol' boy" - and I do not mean that as a pejorative term - and a shrewd businessman. He has been good to his alma mater, Oklahoma State University (see my post on his generosity and its down side). He's made and lost a couple of fortunes.

When I addressed him as "Mr. Pickens" he said, "Call me Boone, son." He gave a good talk in San Antonio, and although it was short on details, it was humorous, with an almost "Aw shucks, I'm just an Okie boy who's done well" attitude. I liked him; he was polite, and his "handlers", with whom I dealt, were equally so.

Anyway, read this article. It's very good and describes some of the legislative somersaults necessary to implement Pickens' plans. 

The article also notes that Royal Dutch Shell is buying up ground water rights in Colorado in anticipation of its oil-shale operation, which will require large amounts of water.

Maude Barlow, where are you now?

"Water is a commodity. Heck, isn't it like oil?" -- T. Boone Pickens

Comments

[Michael]

Dear Stephanie and Dorian,

Thank you both for commenting. Sorry it has taken me so long to respond.

I realize that what Pickens is doing is distasteful to you both, but he's doing nothing illegal. You may think it unethical and immoral, but it's within Texas law.

I find Texas' "rule of capture" an anachronism, and perhaps something like this may motivate change. The law encourages actions like Pickens', because someone else could pump out water from beneath you.

I was just talking to someone who works for the Texas government and he said a number of lawmakers are rethinking this rule.

And, if no one buys Pickens' water, then he can't sell it! So, if you don't like what he is doing and live in one of the cities Pickens is trying to sell water to, you might complain to your city leaders.

But I would ask you: what if Pickens wanted to use his water to grow a crop, or raise cattle, or build a housing development? Would you still find his use of water so repugnant?

[Dorian Roffe-Hammond]

I have to agree with Stephanie. How can Pickens get away with such an overt crime against humanity? Nobody should be allowed to gain this sort of immense control over a precious resource that is an inate right of all People. This country of ours is going to eventually suffer another kind of sucking sound (akin to NAFTA)as private enterprise continues to buy up water rights everywhere. T. Boone's strategy reminds me of J.G. Boswell's "King of California" fateful and successful scheme to drain Tulare Lake (six-hundred-square-mile basin, the largest body of fresh water west of the Mississippi to grow cotton and feed the US in the latter 20th C. I fear for Mankind.

[Stephanie]

I cannot understand why legislators and policy makers and standing by and allowing this to happen. Moreover, why water law is so lax as to allow the profiteering of a resource that is necessary for life is incomprehensible to me. Maybe this is idealistic, but water is a public good and basic human right. At least, some minimal amount should be. That he will profit from the depletion of a natural resource is ridiculous. We still don't know the full consequences of depleting groundwater. Perhaps paid government officials should spend a little more time and attention developing a logical, fair and consistent water rights regime so that ploys like this will not work in the future.