By JEFFREY A. TRACHTENBERG
The Wall Street Journal
August 15, 2008
In his upcoming book, "The First Billion is the Hardest," oilman T. Boone Pickens provides a series of chatty vignettes that he believes reflects key turning points in his business career -- defeats as well as triumphs.
Mr. Pickens, who today is the chief executive of BP Capital, a Dallas-based hedge fund, also has a serious message about energy and the U.S.'s increasing reliance on foreign oil. He wants the U.S. to cut back on imports and to aggressively invest in renewable energy resources, particularly wind power. In May, his Mesa Power LLP placed a $2 billion order for wind turbines.
But Mr. Pickens also likes a good story. While explaining to an audience why he once made a bid for a much larger company, Mr. Pickens told the following joke to illustrate his point that money changes everything: A man walks into a bar with a talking dog. The barman is amazed, and eventually gives the pooch a dollar to buy him a newspaper down the block. When he doesn't return, the owner finds his dog canoodling with a poodle. After the owner expresses dismay, the dog replies: "This is the first time I've had money."
It's easy to forget that Mr. Pickens started out as a geologist at Phillips Petroleum. Before he quit in 1954, he was supporting his wife and two kids on $500 a month, which he describes "as a pretty good salary" at the time. At the age of 26, he bought a station wagon and went into business as a consultant. Two years later, he and several investors formed an oil company that evolved into Mesa Petroleum, which eventually became one of the largest independent oil companies in the U.S. Mr. Pickens, 80 years old, was interviewed by the Wall Street Journal's Jeffrey A. Trachtenberg.
The Wall Street Journal: What prompted this book?
T. Boone Pickens: I felt like a lot had happened to me. I left Mesa [Petroleum] in 1996 and the 12 years that followed were the most productive years of my life. Also, I came from a small town in eastern Oklahoma, and I think that I can still reach a young audience who want to know that average intelligence and a good work ethic is all you need.
WSJ: You were in effect fired as CEO of Mesa Petroleum by Richard Rainwater and his wife Darla Moore in 1996. In this book, you settle scores with them, adding the occasional shot to the ribs. What about forgetting and forgiving?
Mr. Pickens: If somebody I don't like gets in the crosshairs, I pull the trigger. But I don't hunt for them. The reason for paying them back is that they couldn't make a professional transition. You want your departure after 40 years to be pleasant, not unpleasant. They did things that were totally unnecessary, so that's why I said what I said.
WSJ: BP Capital has done well in the commodity markets. Do speculators play a constructive role?
Mr. Pickens: When you look at a commodities market you need hedgers and speculators. If you don't have one, you don't have a market. That's how it works. I don't think speculators are destructive. They are an infinitesimal part of the market. Fundamentals make the market. I'm amused when Congress tries to place the blame on somebody but never themselves. I've never heard any of them ever say, "I've made a mistake." I do. I say I called it wrong. But they just try to find somebody to blame. Now they are blaming speculators. Surely they have more to do than that. We don't focus on the problem in Washington.
WSJ: You often stop in your book to remind readers that you came from a modest background, with a grandmother who cut a smart deal with you to mow lawns for only a dime. Was she really that tough?
Mr. Pickens: Oh yes. She said at one point, "I'm going to help you out on a bad deal," and I thought she was going to raise the price. Instead she offered to have the mower sharpened. She taught me lessons I've never forgotten. She said that the next time I made a contract, I would spend more time figuring out the costs. And it was absolutely true.
WSJ: You've become a representative for renewable energy, which seems odd for an oilman. Did you have a conversion?
Mr. Pickens: It's not a conversion. It's a necessity to save the country. The hydrocarbon era is shutting down in the U.S. We peaked at 10 million barrels produced in 1970; today it's 5 million barrels. We are fading. If you are going out of business you don't go down with the ship, you get another ship. For us it's natural gas. We never felt our back was against the wall. We didn't know it because our leadership didn't tell us. And we didn't feel it because we had cheap oil. It was: Send it to us, never mind the price. Then one day it went vertical and people began screaming. Now we're placing blame. But what we should have done is closed the door and said, how do we get out of this trap? Oil is in decline, coal is dirty, and down the list you go. Circle the ones that will reduce what we're paying for foreign oil. Natural gas, do we have enough? Yes. Why not use it? No leadership.
WSJ: What are your views on lifting the federal moratorium on offshore drilling for oil and gas?
Mr. Pickens: I'm for drilling every place. And I'm for nuclear, and I'm for ethanol, because it means another one million barrels we don't have to import. I'm for anything American. I'm opposed to only one thing: foreign oil. Heck yes, drill. There is nothing wrong with drilling. We haven't had an oil spill in 20 years. If you don't like the appearance of rigs don't look.
WSJ: How can the U.S. lower the amount of gasoline, and therefore imported oil, it uses?
Mr. Pickens: Only one way quickly. You have to change the fuel. If you don't have the oil, what can you use to reduce imports? The answer is natural gas. We are so fortunate to have an abundance of natural gas. It's cleaner, cheaper, and it's ours. How could we ever have imported so much oil when we have so much natural gas? The answer is we didn't have leadership. We have 142,000 natural-gas-powered vehicles, mostly trucks. We sit here like dumb-dumbs. We have plenty of natural gas.
WSJ: You argue that coal is the immediate answer to our energy needs. Won't more coal-fired power mean more global-warming gases?
Mr. Pickens: No question about it. But you can clean it up. The coal is ours. That's a resource we have available. We can't keep importing oil. I'd rather use our finite resources than somebody else's. And natural gas will be a bridge to the next generation of transportation fuel. Right now we have nothing.
WSJ: You're promoting the Pickens Plan, a blueprint for a dramatic change in the U.S. energy landscape. Do you see any politicians or companies embracing new energy policies that make sense?
Mr. Pickens: There's no policy. We have 250 million vehicles in America. We have got to make some changes. The government must come out and say all government vehicles in the future will use natural gas. You can revitalize our economy, our transportation system, and create an energy system in 10 years that would be the best in the world. Instead, we're importing oil that will be $300 a barrel in 10 years.
Sunday, August 17, 2008
Thursday, August 14, 2008
We Are All Georgians
By John McCain
The Wall Street Journal
August 14, 2008
For anyone who thought that stark international aggression was a thing of the past, the last week must have come as a startling wake-up call. After clashes in the Georgian region of South Ossetia, Russia invaded its neighbor, launching attacks that threaten its very existence. Some Americans may wonder why events in this part of the world are any concern of ours. After all, Georgia is a small, remote and obscure place. But history is often made in remote, obscure places.
As Russian tanks and troops moved through the Roki Tunnel and across the internationally recognized border into Georgia, the Russian government stated that it was acting only to protect Ossetians. Yet regime change in Georgia appears to be the true Russian objective.
Two years ago, I traveled to South Ossetia. As soon as we arrived at its self-proclaimed capital -- now occupied by Russian troops -- I saw an enormous billboard that read, "Vladimir Putin, Our President." This was on sovereign Georgian territory.
Russian claims of humanitarian motives were further belied by a bombing campaign that encompassed the whole of Georgia, destroying military bases, apartment buildings and other infrastructure, and leaving innocent civilians wounded and killed. As the Russian Black Sea Fleet began concentrating off of the Georgian coast and Russian troops advanced on one city after another, there could be no doubt about the nature of their aggression.
Despite a French-brokered cease-fire -- which worryingly does not refer to Georgia's territorial integrity -- Russian attacks have continued. There are credible reports of civilian killings and even ethnic cleansing as Russian troops move deeper into Georgian territory.
Moscow's foreign minister revealed at least part of his government's aim when he stated that "Mr. Saakashvili" -- the democratically elected president of Georgia -- "can no longer be our partner. It would be better if he went." Russia thereby demonstrated why its neighbors so ardently seek NATO membership.
In the wake of this crisis, there are the stirrings of a new trans-Atlantic consensus about the way we should approach Russia and its neighbors. The leaders of Poland, Estonia, Lithuania, Ukraine and Latvia flew to Tbilisi to demonstrate their support for Georgia, and to condemn Russian aggression. The French president traveled to Moscow in an attempt to end the fighting. The British foreign minister hinted of a G-8 without Russia, and the British opposition leader explicitly called for Russia to be suspended from the grouping.
The world has learned at great cost the price of allowing aggression against free nations to go unchecked. A cease-fire that holds is a vital first step, but only one. With our allies, we now must stand in united purpose to persuade the Russian government to end violence permanently and withdraw its troops from Georgia. International monitors must gain immediate access to war-torn areas in order to avert an even greater humanitarian disaster, and we should ensure that emergency aid lifted by air and sea is delivered.
We should work toward the establishment of an independent, international peacekeeping force in the separatist regions, and stand ready to help our Georgian partners put their country back together. This will entail reviewing anew our relations with both Georgia and Russia. As the NATO secretary general has said, Georgia remains in line for alliance membership, and I hope NATO will move ahead with a membership track for both Georgia and Ukraine.
At the same time, we must make clear to Russia's leaders that the benefits they enjoy from being part of the civilized world require their respect for the values, stability and peace of that world. The U.S. has cancelled a planned joint military exercise with Russia, an important step in this direction.
The Georgian people have suffered before, and they suffer today. We must help them through this tragedy, and they should know that the thoughts, prayers and support of the American people are with them. This small democracy, far away from our shores, is an inspiration to all those who cherish our deepest ideals. As I told President Saakashvili on the day the cease-fire was declared, today we are all Georgians. We mustn't forget it.
The Wall Street Journal
August 14, 2008
For anyone who thought that stark international aggression was a thing of the past, the last week must have come as a startling wake-up call. After clashes in the Georgian region of South Ossetia, Russia invaded its neighbor, launching attacks that threaten its very existence. Some Americans may wonder why events in this part of the world are any concern of ours. After all, Georgia is a small, remote and obscure place. But history is often made in remote, obscure places.
As Russian tanks and troops moved through the Roki Tunnel and across the internationally recognized border into Georgia, the Russian government stated that it was acting only to protect Ossetians. Yet regime change in Georgia appears to be the true Russian objective.
Two years ago, I traveled to South Ossetia. As soon as we arrived at its self-proclaimed capital -- now occupied by Russian troops -- I saw an enormous billboard that read, "Vladimir Putin, Our President." This was on sovereign Georgian territory.
Russian claims of humanitarian motives were further belied by a bombing campaign that encompassed the whole of Georgia, destroying military bases, apartment buildings and other infrastructure, and leaving innocent civilians wounded and killed. As the Russian Black Sea Fleet began concentrating off of the Georgian coast and Russian troops advanced on one city after another, there could be no doubt about the nature of their aggression.
Despite a French-brokered cease-fire -- which worryingly does not refer to Georgia's territorial integrity -- Russian attacks have continued. There are credible reports of civilian killings and even ethnic cleansing as Russian troops move deeper into Georgian territory.
Moscow's foreign minister revealed at least part of his government's aim when he stated that "Mr. Saakashvili" -- the democratically elected president of Georgia -- "can no longer be our partner. It would be better if he went." Russia thereby demonstrated why its neighbors so ardently seek NATO membership.
In the wake of this crisis, there are the stirrings of a new trans-Atlantic consensus about the way we should approach Russia and its neighbors. The leaders of Poland, Estonia, Lithuania, Ukraine and Latvia flew to Tbilisi to demonstrate their support for Georgia, and to condemn Russian aggression. The French president traveled to Moscow in an attempt to end the fighting. The British foreign minister hinted of a G-8 without Russia, and the British opposition leader explicitly called for Russia to be suspended from the grouping.
The world has learned at great cost the price of allowing aggression against free nations to go unchecked. A cease-fire that holds is a vital first step, but only one. With our allies, we now must stand in united purpose to persuade the Russian government to end violence permanently and withdraw its troops from Georgia. International monitors must gain immediate access to war-torn areas in order to avert an even greater humanitarian disaster, and we should ensure that emergency aid lifted by air and sea is delivered.
We should work toward the establishment of an independent, international peacekeeping force in the separatist regions, and stand ready to help our Georgian partners put their country back together. This will entail reviewing anew our relations with both Georgia and Russia. As the NATO secretary general has said, Georgia remains in line for alliance membership, and I hope NATO will move ahead with a membership track for both Georgia and Ukraine.
At the same time, we must make clear to Russia's leaders that the benefits they enjoy from being part of the civilized world require their respect for the values, stability and peace of that world. The U.S. has cancelled a planned joint military exercise with Russia, an important step in this direction.
The Georgian people have suffered before, and they suffer today. We must help them through this tragedy, and they should know that the thoughts, prayers and support of the American people are with them. This small democracy, far away from our shores, is an inspiration to all those who cherish our deepest ideals. As I told President Saakashvili on the day the cease-fire was declared, today we are all Georgians. We mustn't forget it.
I See Four Key Battleground States
By Karl Rove
The Wall Street Journal
August 14, 2008
Presidential campaigns ultimately come down to who can win 270 Electoral College votes. With most states favoring one candidate or the other, this year's contest could come down to a few battleground states.
Based on visits this past week with party leaders and old pros, it's clear that Barack Obama will focus on Colorado and Virginia. Both have large concentrations of white, college-educated voters with whom Mr. Obama is popular. And both have seen Democrats surge recently.
Of the two, Mr. Obama is best positioned to pick up Colorado's nine electoral votes. Denver hosts the Democratic convention at the end of this month. And a quartet of local millionaires (mini-George Soroses) have spent lavishly to boost Democrats. They have succeeded at shrinking the Republican advantage among registered voters. The GOP now has just 68,507 more voters on the rolls in Colorado than Democrats, down from a 176,572 edge four years ago.
Democrats win the state when they hold down GOP margins in rural districts, and appeal to swing women voters in Larimer County and the Denver suburbs. Mr. Obama lacks rural credentials, but he might make inroads in the suburbs.
Sen. McCain's independence will help him in Colorado. Also, there will be two anti-union initiatives on the ballot this fall that could energize conservatives. But he needs to run up votes in the GOP strongholds of El Paso (Colorado Springs), Douglas (south of Denver), Weld (Eastern Plains) and Mesa (Western Slope) counties, while appealing to Democratic and independent Hispanics and Catholics.
The last time Virginia (13 electoral votes) went for a Democratic presidential candidate was 1964. In 2004, the GOP's margin was eight points. That makes Virginia an uphill climb for Mr. Obama, but not out of reach. He's focused on increasing African-American voters in Hampton Roads (in the southeastern corner of the state), Richmond and Petersburg, and on deepening his strength in Northern Virginia, where Fairfax was one of only 60 counties in America to flip from Republican in '00 to Democrat in '04.
But Mr. McCain's maverick image allows him to compete in Northern Virginia, where he's buying expensive D.C. TV ads. He also needs to do well in rural Virginia and the Richmond suburbs. Hampton Roads is home to nearly twice as many veterans as the national average, so Mr. McCain should be able to do well there.
If Mr. McCain lost Colorado and Virginia, he would likely have 264 electoral votes (assuming he carried the other states President Bush won in 2004). To win, he would have to pick up a state Democrats are counting on winning, such as Michigan.
With 17 electoral votes, Michigan is an attractive target. But it is also a complicated state. The Democratic machine is in near meltdown in Detroit, where the city's mayor is fighting felony charges stemming from an alleged cover-up of a sex scandal (he recently spent a night in jail). The party is also hurt by adverse reactions to Democratic Gov. Jennifer Granholm's $1.5 billion tax increase last year, which dampened economic growth.
Mr. McCain needs Reagan Democrats and independents in eastern Michigan. These working class, culturally conservative, mostly Catholic voters are how the GOP elected an attorney general, a secretary of state and a state Senate majority. These voters care about jobs and know manufacturing runs on affordable energy. They will respond to Mr. McCain's call for domestic drilling and expanded nuclear power.
Mr. McCain also needs to focus on "soft" Republicans, particularly in the Detroit suburbs. His renegade reputation will help him with socially liberal independents and Republicans. But Mr. Obama's change message will help him in western Michigan where the socially conscious, historically Republican Dutch voters have antiwar tendencies.
Then there is Ohio. Ground zero in '04, its 20 electoral votes will be hotly contested again this year. No Republican has won the White House without winning the Buckeye State.
How can Mr. McCain take Ohio? He can appeal to swing voters in the northeastern part of the state. Cuyahoga, Summit and Lucas counties and the Mahoning Valley are full of culturally conservative, working-class voters. In addition, Mr. Obama was wiped out in the primary among the blue-collar Reagan Democrats of southeastern Ohio. Outside of the university town of Athens, he won less than 30% of the vote in southeastern Ohio. This Appalachian region remains bad turf for him.
Mr. McCain will need to do well with suburban independents in the counties surrounding Columbus to balance heavy African-American turnout. He will also need to run strong in the Cincinnati suburbs in the southwest, and in rural and small-town counties.
Other states will see serious competition, including Florida, Pennsylvania, Nevada, New Hampshire, Missouri and Wisconsin. But Colorado, Virginia, Michigan and Ohio are likely to be the center of the action. To win, Mr. Obama needs to pick up 18 electoral votes more than John Kerry received, meaning Mr. Obama must carry Colorado or Virginia and add another small state to his column. If Mr. McCain carries Michigan as well as Ohio, it would make Mr. Obama's Electoral College math very difficult. And if Mr. McCain can limit GOP losses to one or two small states from those won by the GOP in 2004, he'll be America's 44th president.
Mr. Rove is a former senior adviser and deputy chief of staff to President George W. Bush.
The Wall Street Journal
August 14, 2008
Presidential campaigns ultimately come down to who can win 270 Electoral College votes. With most states favoring one candidate or the other, this year's contest could come down to a few battleground states.
Based on visits this past week with party leaders and old pros, it's clear that Barack Obama will focus on Colorado and Virginia. Both have large concentrations of white, college-educated voters with whom Mr. Obama is popular. And both have seen Democrats surge recently.
Of the two, Mr. Obama is best positioned to pick up Colorado's nine electoral votes. Denver hosts the Democratic convention at the end of this month. And a quartet of local millionaires (mini-George Soroses) have spent lavishly to boost Democrats. They have succeeded at shrinking the Republican advantage among registered voters. The GOP now has just 68,507 more voters on the rolls in Colorado than Democrats, down from a 176,572 edge four years ago.
Democrats win the state when they hold down GOP margins in rural districts, and appeal to swing women voters in Larimer County and the Denver suburbs. Mr. Obama lacks rural credentials, but he might make inroads in the suburbs.
Sen. McCain's independence will help him in Colorado. Also, there will be two anti-union initiatives on the ballot this fall that could energize conservatives. But he needs to run up votes in the GOP strongholds of El Paso (Colorado Springs), Douglas (south of Denver), Weld (Eastern Plains) and Mesa (Western Slope) counties, while appealing to Democratic and independent Hispanics and Catholics.
The last time Virginia (13 electoral votes) went for a Democratic presidential candidate was 1964. In 2004, the GOP's margin was eight points. That makes Virginia an uphill climb for Mr. Obama, but not out of reach. He's focused on increasing African-American voters in Hampton Roads (in the southeastern corner of the state), Richmond and Petersburg, and on deepening his strength in Northern Virginia, where Fairfax was one of only 60 counties in America to flip from Republican in '00 to Democrat in '04.
But Mr. McCain's maverick image allows him to compete in Northern Virginia, where he's buying expensive D.C. TV ads. He also needs to do well in rural Virginia and the Richmond suburbs. Hampton Roads is home to nearly twice as many veterans as the national average, so Mr. McCain should be able to do well there.
If Mr. McCain lost Colorado and Virginia, he would likely have 264 electoral votes (assuming he carried the other states President Bush won in 2004). To win, he would have to pick up a state Democrats are counting on winning, such as Michigan.
With 17 electoral votes, Michigan is an attractive target. But it is also a complicated state. The Democratic machine is in near meltdown in Detroit, where the city's mayor is fighting felony charges stemming from an alleged cover-up of a sex scandal (he recently spent a night in jail). The party is also hurt by adverse reactions to Democratic Gov. Jennifer Granholm's $1.5 billion tax increase last year, which dampened economic growth.
Mr. McCain needs Reagan Democrats and independents in eastern Michigan. These working class, culturally conservative, mostly Catholic voters are how the GOP elected an attorney general, a secretary of state and a state Senate majority. These voters care about jobs and know manufacturing runs on affordable energy. They will respond to Mr. McCain's call for domestic drilling and expanded nuclear power.
Mr. McCain also needs to focus on "soft" Republicans, particularly in the Detroit suburbs. His renegade reputation will help him with socially liberal independents and Republicans. But Mr. Obama's change message will help him in western Michigan where the socially conscious, historically Republican Dutch voters have antiwar tendencies.
Then there is Ohio. Ground zero in '04, its 20 electoral votes will be hotly contested again this year. No Republican has won the White House without winning the Buckeye State.
How can Mr. McCain take Ohio? He can appeal to swing voters in the northeastern part of the state. Cuyahoga, Summit and Lucas counties and the Mahoning Valley are full of culturally conservative, working-class voters. In addition, Mr. Obama was wiped out in the primary among the blue-collar Reagan Democrats of southeastern Ohio. Outside of the university town of Athens, he won less than 30% of the vote in southeastern Ohio. This Appalachian region remains bad turf for him.
Mr. McCain will need to do well with suburban independents in the counties surrounding Columbus to balance heavy African-American turnout. He will also need to run strong in the Cincinnati suburbs in the southwest, and in rural and small-town counties.
Other states will see serious competition, including Florida, Pennsylvania, Nevada, New Hampshire, Missouri and Wisconsin. But Colorado, Virginia, Michigan and Ohio are likely to be the center of the action. To win, Mr. Obama needs to pick up 18 electoral votes more than John Kerry received, meaning Mr. Obama must carry Colorado or Virginia and add another small state to his column. If Mr. McCain carries Michigan as well as Ohio, it would make Mr. Obama's Electoral College math very difficult. And if Mr. McCain can limit GOP losses to one or two small states from those won by the GOP in 2004, he'll be America's 44th president.
Mr. Rove is a former senior adviser and deputy chief of staff to President George W. Bush.
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