The real Boone Pick­ens story

The Washington Times Weekly - - Commentary -

The real Boone Pick­ens story is not that he headed Mesa Petroleum and in its ex­pan­sion pro­gram dur­ing the 1980s re­formed the re­la­tion­ship be­tween share­hold­ers and cor­po­rate ex­ec­u­tives. No, it is that dur­ing his life Mr. Pick­ens has ex­pe­ri­enced ex­traor­di­nary set­backs and has al­ways come back.

Peo­ple who have the re­silience to over­come sig­nif­i­cant set­backs in their ca­reers de­serve spe­cial ad­mi­ra­tion and re­spect. Among po­lit­i­cal leaders, Abra­ham Lin­coln is per­haps the best ex­am­ple — over­com­ing elec­tion losses and per­sonal tragedies to be­come one of our most revered pres­i­dents.

Richard Nixon was elected and re-elected vice pres­i­dent, lost a pres­i­den­tial race by a smidgen, lost the Cal­i­for­nia gu­ber­na­to­rial race, re­bounded by be­ing elected and re-elected pres­i­dent, re­signed in dis­grace and then came back as a se­nior states­man and au­thor of im­por­tant books. Bill Clin­ton (the “come­back kid”) was elected gov­er­nor of Arkansas, lost a bid for re-elec­tion, won again, ad­dressed the Demo­cratic Con­ven­tion in 1988 and was al­most hooted off the stage, was elected and re-elected pres­i­dent, was im­peached, though not con- victed, and is now a pop­u­lar and re­spected or­a­cle.

John McCain flew jets off car­ri­ers, was shot down, im­pris­oned and tor­tured, then elected to the House and later the Se­nate, and is now the pre­sump­tive Repub­li­can nom­i­nee for pres­i­dent.

Boone Pick­ens has had a roller­coaster ride as well, judg­ing from his new semi-au­to­bi­o­graph­i­cal book, “The First Bil­lion is the Hard­est.” In can­did, of­ten earthy, lan­guage, Mr. Pick­ens de­scribes the ups and downs of his ca­reer, the rea­sons for his fail­ures as well as his suc­cesses, what he has learned about both, and why, at age 80, he is just find­ing his groove.

The only child of strong par­ents of mod­est means, young Boone lands a bas­ket­ball schol­ar­ship at Texas A&M, loses it af­ter his fresh­man year (“too short, too slow”), gets into what is now Ok­la­homa State Uni­ver­sity, grad­u­ates with a de­gree in ge­ol­ogy, takes a re­spectable, though dead-end, job at Phillips Petroleum, cashiers the job to be­come a con­sult­ing ge­ol­o­gist (liv­ing in his car while on the road), scrapes up a cou­ple thou­sand dol­lars and, with two friends hold­ing mi­nor­ity in­ter­ests, es­tab­lishes what would be­come Mesa Petroleum.

Mesa pros­pers and be­comes the largest in­de­pen­dent oil com­pany in the United States. But it is run­ning out of re­serves. See­ing lit­tle op­por­tu­nity to drill for more, Boone shops for re­serves on Wall Street, mak­ing of­fers for un­der­priced oil com­pa­nies. This leads to hos­tile takeover at­tempts for Cities Ser­vice, Gulf Oil, Phillips Petroleum and Uno­cal dur­ing the early 1980s. None re­sults in an ac­tual ac­qui­si­tion, but in each case Mesa walks away with sub­stan­tial gains on its hold­ings in the com­pa­nies.

Boone, of course, be­comes an in­stant celebrity as a “cor­po­rate raider” — and be­comes per­sona non grata among ex­ec­u­tives in the in­dus­try. Ran­kled by the ar­ro­gance of ex­ec­u­tives see­ing the com­pa­nies by whom they are em­ployed as “their” com­pa­nies in­stead of the stock­hold­ers’ com­pa­nies, Mr. Pick­ens es­tab­lishes United Share­holder As­so­ci­a­tion, which builds on the firestorm Boone has ig­nited and helps bring about sig­nif­i­cant re­forms that strengthen stock­holder rights.

By the mid-1990s, how­ever, Mesa falls on re­ally hard times. Boone in­vites a friend to in­ject eq­uity into the com­pany, the re­sult of which is that in 1996 Boone is mus­cled out as chair­man/CEO and qui­etly leaves the firm he had founded. Tak­ing his sev­er­ance, he es­tab­lishes BP Cap­i­tal, calls on his friends to in­vest funds, and sets up shop to trade in com­modi­ties — but only af­ter fail­ing the com­mod­ity pool op­er­a­tor twice! The re­sults are well nigh dis­as­trous. In the late 1990s, Boone goes short on nat­u­ral gas, ex­pect­ing price to fall; in­stead, it rises. Boone is mak­ing mis­takes. He is down, not only fi­nan­cially, but psy­cho­log­i­cally. For­tu­nately, friends get him help for un­di­ag­nosed de­pres­sion.

Boone comes back. In 2000, he bets long on nat­u­ral gas at a time when out­put is con­strained, and de­mand, be­cause of fore­casts of ex­tremely cold weather dur­ing the com­ing win­ter, rises dra­mat­i­cally. Boone rides price up and goes short just at the peak. The re­sult is an enor­mous gain for BP Cap­i­tal and a resur­gence of Boone Pick­ens.

In the years since, BP Cap­i­tal has thrived. So has other of his en­ter­prise ini­tia­tives, in­clud­ing Clean En­ergy Fu­els, the largest re­tailer of nat­u­ral gas for ve­hi­cles in Amer­ica.

Boone is on sev­eral mis­sions. He has worked him­self into the best phys­i­cal and men­tal shape of his ca­reer. He works out in­tensely al­most daily, and a re­cent ar­ti­cle in Forbes mag­a­zine — “In­side Boone’s brain” — con­cludes he has the brain of much younger man. He strives to be a highly suc­cess­ful “coach” of his team at BP Cap­i­tal. He is giv­ing most of his money away — in ex­cess of $300 mil­lion to the ath­letic pro­gram at Ok­la­homa State Uni­ver­sity, $100 mil­lion to the Uni­ver­sity of Texas Sys­tem, and $10 mil­lion to the Rea­gan Li­brary are the most well-known en­dow­ments, but there are many oth­ers.

Fi­nally, Boone is on a mis­sion to change U.S. en­ergy pol­icy. He de­cries spine­less politi­cians who talk about en­ergy in­de­pen­dence but do lit­tle about it. Boone says we should trans­fer to ve­hi­cles the nat­u­ral gas presently fu­el­ing 30 per­cent of elec­tric power gen­er­a­tion in the United States. Then, use wind and so­lar power to re­place the short­fall in power gen­er­a­tion. That’s just for starters. His other pro­pos­als can be found at Pick­en­s­ With his own money, he has un­der­taken a $58 mil­lion pro­mo­tion cam­paign to end our de­pen­dence on for­eign oil.

And when Boone Pick­ens sets his mind to some­thing, any­thing can hap­pen!

James C. Miller III, bud­get di­rec­tor for Pres­i­dent Rea­gan, serves with T. Boone Pick­ens on the board of Clean En­ergy Fu­els (CLNE).

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