T. Boone Pickens - The First Billion Is the Hardest: Reflections on a Life of Comebacks and Americas Energy Future

Contents

CHAPTER 1
Blood, Guts, and Feathers

CHAPTER 2
A Big Deal Takes as Much Time as a Little Deal

CHAPTER 3
Starting Over

CHAPTER 4
The Bottom of the Canyon

CHAPTER 5
Loading the Boat

CHAPTER 6
Its All About the Team

CHAPTER 7
Learning to Live with Peak Oil

CHAPTER 8
Going Long and Scoring Big

CHAPTER 9
Stepping Up My Giving

CHAPTER 10
Roll Up the Maps!

CHAPTER 11
Mixing Oil and Water

CHAPTER 12
The Biggest Deal of My Career: Wind

CHAPTER 13
The Big Idea: An Energy Plan for America

To my father, Tom Pickens,
a courageous man who saved my life;
my mother, Grace Molonson Pickens,
who gave me life and love;
and my grandmother Nellie Molonson, who taught
me lessons Ive used all my life

There is no limit to what a man can do or where he can go, if he doesnt mind who gets the credit.

Ronald Reagan

Introduction

T HERES NOTHING BETTER than being the underdog. The more people count me out, the more I count myself in. I dont like to show all my cards too early, and that gives me two distinct advantages: my opponents often get the wrong read on me, and I push myself longer and harder. When it looks like you should pack it in but you still dig in anyway, you also pick up a lot of support. Everybody loves an underdog. Look at Seabiscuit. Throughout my career, being the guy who isnt favored to win has earned me a devoted following, a loyal core of supporters that ranges from shareholder activists to people who admire my grit. Its also spurred me to exceed everyones expectationson the athletic field, in the oil business, and in taking on Wall Street. Yet in 1996, when I faced my toughest challenges ever, my dauber was down, as the saying goes. I just wasnt carrying around that self-belief that usually has me doubling my focus when things look grim.

Id departed Mesa Petroleum, the company Id founded and led through four decades. My marriage was ending in divorce. My assets seemed to be dwindling daily. And no one was more surprised than I when a doctor diagnosed me as clinically depressed. At sixty-eight, I was well past the official age of retirement, and financially I was at a point where most people would be happy to call it quits. Not this cowboy, though. I had a clear goal for my new company, BP Capital: to become a leading commodities fund.

Let me fast-forward a decade. Last year Forbes pegged my net worth at $3 billion. My new bride has captivated me. And my health has never been better. Together, these have been my greatest comebacks. And believe me, my life has not lacked for comebacks.

I hope that with this book I can inspire the millions of Americans who, like me, are entering the fourth quarter. Specifically, I want them to know what Ive learned at eighty: the best part of the game truly lies ahead. Im playing this last period as hard as a walk-on freshman whos just gotten into his first game. Im also having more fun than Ive ever had. Ive entered a period of life where I not only value the importance of work but also have a renewed appreciation for my family and endeavor to build the best relationships I possibly can. The time I spend with my children and my grandchildren I enjoy more than ever.

Besides inspiring others whove been counted out for whatever reason, what else do I hope to accomplish with this book? Three things. First, I want to reveal the managerial and team-building techniques that have enabled meespecially recentlyto enjoy an unprecedented level of success. Second, I want to demonstrate that money can be overrated, but it can also be a precious gift when used unselfishly. If youre interested in hearing how one grateful Texan managed to give $700 million to the causes he loves, stick around. Third, and perhaps most important, I plan to dispel some of the many myths about the oil and gas industry. Ive been in this business for over half a century, and Ive heard more than my share of stupid ideas. These are the worst:

Myth No. 1: Drilling in the Arctic National Wildlife Refuge will make us energy independent.

Myth No. 2: Ethanol will save the day.

Myth No. 3: Big Oil is manipulating the price of gas at the pumps.

Myth No. 4: The lack of new refineries in the United States is a main contributor to high gasoline prices.

Myth No. 5: New technology will enable us to discover enormous untapped reservoirs of oil.

All these fallacies do is perpetuate misinformation and prevent us from developing an effective national energy plan. Our country is facing a crisis. I fear we have some very dark days ahead, and we must do something about it. I love this country too much to remain silent about the way Americas political leadership has failed to tackle what I believe is one of the greatest threats ever to face this nation: our crippling dependence on foreign oil.

In the final chapters of this book, I spell out what Im convinced is Americas increasingly dangerous addiction to imported oil and the economic perils that lie ahead if we dont act fast, particularly with respect to certain alternative technologies. Action, thats whats important. In this book, I dont just identify the problem; I offer answers. Our biggest problem is leadership. For decades, weve lacked the leadership at the federal level to address our growing dependence on foreign oil. Weve all heard the empty promises and seen the results of shallow policies.

Elect me president, and America will become energy independent! Every candidate says it, and once theyre elected not one does a thing about it. The cost of our failure to secure this vital life-line is staggering. By importing foreign oil to meet our ever-increasing demands, the United States is transferring close to $1 trillion a year (assuming a price of $150 per barrel) to foreign nations that, with few exceptions, dont really like us. Its the greatest transfer of wealth in human history, and it has to be stopped now. We need a plan to radically reduce our dependence on foreign oil, and we need leadership able to carry it out. Otherwise, we risk losing our status as a superpower.

Ill outline my national energy plan here. Is it perfect? No. Is it a realistic start? You bet, and its time to get serious and begin working on it. I believe our oil addiction is the greatest threat facing America in the twenty-first century. I also believe that, as with all crises our country has faced, determination and ingenuity can yield the solutions we seek. I hope you enjoy this book and take to heart its most important messages. Most crucially, I hope you get involved in the campaign to address the crisis of foreign oil imports.

Ive spent more than a year working on this book, and my goal was not just to create an interesting read. It was to issue a wake-up call to every American who cares as much about this country as I do.

T. Boone Pickens
Dallas, Texas
May 22, 2008

CHAPTER 1

Blood, Guts, and Feathers

Booneism #1: Dont rush the monkey, and youll see a better show.

R ISK HAS ALWAYS BEEN a part of my life. Im not sure whether Im drawn to it or its drawn to me, but at every point in my eighty years, Ive been faced with a challenge, and in just about every instance Ive taken it. Even my birth was a do-or-die proposition.

My mother went into labor on May 21, 1928. It was a long ordeal, and things werent going well. The doctor, George Wallace, took my father, Tom, into a small room and closed the door. He had a grave look on his face, and my father immediately spotted a large book on a table. He assumed it was a Bible.

Your wife has been in labor a long time, and she cant deliver. Im worried about her. You can save your wife or your baby, but not both, Dr. Wallace said.