Texas Oil Tycoon Tackles Renewable Energy

Transmission is a major challenge for most wind projects -- getting the electricity to where the people are.
That's right. The hardest part is having rights-of-way and buyers someplace.

You've been planning a $3 billion water pipeline from the Texas panhandle to Dallas. Would the wind and water be transported along the same corridor?
Yes, if it goes to Dallas. We bought $45 million worth of water rights in Roberts County. We'll transport 200,000 acre-feet of water a year. And we set up a water district that gives us the power of eminent domain for the transmission corridor. We can issue tax-free bonds. It has all the favorable characteristics of a city government.

You put $1.2 million into the last Texas elections, didn't you?
I don't know. I don't keep track.

The advocacy group Texans for Public Justice alleged that you used that money to get a bill passed that allowed you to create and control the water district without local voters' approval.
That's not true. I never asked any elected official for that. It's bullshit.

Did that law help you with your wind and water projects?
The bill lets us use the right-of-way from the water district for both water and wind. But I didn't even know anything about the bill until it was over with.

How important is wind to America's future energy needs?
The United States today runs on 987,000 megawatts, and the demand is going to increase 150,000 megawatts in the next 10 years -- 15%. We could supply most of that with wind from the Great Plains, from Texas to North Dakota, but we've got to set up corridors to the West Coast and to the East Coast.

So you're an oil man who's turning his back on oil?
Foreign oil is costing us $500 billion a year. In 10 years, $5 trillion goes out of the country. It's nuts. It's the greatest transfer of wealth from one area to another in the history of the world.

You argue in your new book, The First Billion Is the Hardest (out in September from Crown), that global oil supply is slowing.
If I'm right, world oil supply has peaked. Existing fields are going to start declining at 5% to 8% per year, and it's like a treadmill: As your production declines, it gets harder to keep up. Look at the biggest oil field in the world, Ghawar in Saudi Arabia; for every barrel of oil, they're lifting six of water. That means the field has matured. It peaked at 5.7 million barrels a day; now it's 4 million.

What will happen in the next five years?
Demand will go up, and price will go up.

Take a stab at what we'll be paying at the pump in five years.
Oh hell, that's so far out. Maybe $6 to $8 a gallon.

You've advocated a higher gasoline tax. What do you think the tax ought to be?
I don't have a formula. I've just said, if it were up to me, I'd raise the tax to kill demand. And the people who are going to be most hurt by it, give them a break on payroll taxes or something else.

Is ethanol part of the solution?
Ethanol is political. That's what Bob Dole told me in 1989. He called me up and said, "Quit talking down ethanol. You need to understand something: There are 21 farm states, and that's 42 senators. Those senators want ethanol." He said, "Are you getting the picture?" And I said, "Yeah, it's coming through pretty clear." [Dole confirms that Pickens's account is "probably accurate."]

Not exactly an inspiring vision of Congress.
The leadership is absolutely, totally pissy in Congress -- a real conglomeration of fruitcakes. I mean pitiful people.

So would you cut the ethanol subsidy?
No. Hell, I'd rather subsidize ethanol or cream soda than have the money going out of the country buying oil. If you subsidize ethanol, the technology will ultimately get better. Corn will not be the primary ethanol fuel. They'll go to something cellulosic. People who are against it say, "It costs so much to buy ethanol." It costs more to buy oil from the Middle East. You're better off circulating money in the United States. Create jobs here.

Are you supporting any of the current presidential candidates?
I always support the Republicans. I had a tough choice between McCain and Hillary... . That's a joke. I think she's basically not an honest person.

You were a major funder of the Swift Boat Veterans for Truth campaign in 2004. Senator John Kerry says you rolled back your million-dollar challenge to anyone who found anything false in the campaign, after he challenged it.
He said that? He's a fucking liar. I didn't roll back anything. He never showed me one thing that was not factual. I said, "I'll give anyone a million dollars if they can show anything that was not factual in the ads." Those ads were perfect.