If the United States doesn’t find itself going to war on the Saudi peninsula this week, we owe one man a posthumous thanks: T.Boone Pickens, who passed away at age 91 on September 11.
Fifteen years ago—or even ten years ago—the drone strike this weekend on the Saudi oil fields would have triggered an international catastrophe. Oil prices would have soared into the stratosphere; world economies would have been shaken to their foundations; and the U.S. would have been forced to go to war to shore up a crumbling global order.
The fact that this hasn’t happened, is due to the fact that the U.S., not Saudi Arabia, is now the world’s number one oil as well as natural gas producer. Our energy dominance has gone a long way not only to reduce oil and gas prices in the U.S. and around the world. It also gives a major producer like the Saudi kingdom the buffer it needs to recover and resume oil exports, without major disruptions in the global energy market—and obviates the need to put boots on the ground to protect the Saudis from another catastrophic attack.
That energy dominance in turn has been due to the fracking revolution, which revolutionized America’s energy map and revived an American natural gas industry that a couple decades ago was written off as moribund. And if any single person can take responsibility for understanding that revolution, and what it meant, it was energy tycoon T. Boone Pickens.
The media liked to portray Pickens as a ruthless corporate raider and outsized personality unafraid to lecture presidents about how to run America’s economy, as well as its energy patch. The truth is, Pickens saw America’s bright energy future more clearly than anyone else in the industry, and its key ingredient: abundant supplies of natural gas.
I was lucky enough to work with T. Boone Pickens toward the end of his life on an event here at the Hudson Institute in Washington, and to do a podcast with him on America’s energy future. I came to understand how Pickens embodied not only America’s entrepreneurial spirit, but also the drive and discipline that still animates today’s energy industry.
He was born in 1928 deep in the heart of the Oklahoma oil patch, in Hughes County. His father was a landman, someone who acquired leases for oil companies. When his father went to work for Phillips Petroleum Company in Amarillo, Texas, Pickens (having studied geology in college) did, as well. But he came to hate Philips’s Big Oil bureaucratic way of doing things, and decided he preferred the Pickens Way instead. In 1954 he struck out on his own, driving around the state looking for drilling deals, using phone booths as his office and shaving in the restrooms of local gas stations, while putting together crews on a shoestring in hopes of hitting the big strike.
By 1964 Pickens had put together enough deals to create Mesa Petroleum, a leading independent oil company. By the 1980’s he sensed that the American energy industry was ready for a major shakeup. Although domestic production was declining, company executives were living high on the hog. Their balance sheets failed to reflect their true asset value—let alone their value to shareholders, including investors like Pickens.
Pickens transformed himself from independent oil man to corporate raider. Along with his friend Carl Icahn, he became the undisputed master of energy sector mergers and acquisitions—and the most feared.
By 1985 he had forced all the majors to pare down their operations, recast their balance sheets, and buy up their vulnerable competitors or face being bought out themselves. His aggressive strategy earned him hostility in the media, not to mention in corporate board rooms. But it saved the American oil and gas industry by making it leaner and meaner—and ready for the volatility of oil and gas prices that would sweep the world in the 2000’s and 2010’s.
By then Pickens was ready for his third transformation, this time into an advocate of a national energy plan based on the transition from oil to natural gas. He testified before Congress, warning that America’s foreign oil addiction — in 2008 the country was spending $700 billion a year importing oil — amounted to the greatest transfer of wealth in the history of mankind. He launched a $58 million TV advertising blitz to rally public support for his proposal, dubbed the Pickens Plan, to shift America’s economy to a domestic natural gas power base.
One day Pickens said to me, “My father once told me, ‘Son, a fool with a plan can beat a genius with no plan.’” First unveiled in 2008, the Pickens Plan was an unprecedented effort to focus the American public on how to decouple their economy from Middle East oil by tapping into America’s abundant sources of natural gas, including in shale deposits scattered across the country.
Pickens’s emphasis on relying on shale natural gas to power America’s energy map was prescient. “Oil from the Middle East is no longer just an economic issue,” he told TIME magazine in 2015. “It has become a national security issue. As long as we keep buying oil from the Middle East, our enemies can continue to fund terrorism,” including organizations like Al Qaeda and ISIS—as well as the rogue nation of Iran.
As a percentage, the US today imports less foreign oil than at any time since 1958, when Pickens was just getting started in the oil business. liked to compare the global energy market to a poker game. The shale revolution has given America the royal flush it needed to trump the cards held by the OPEC countries, including Saudi Arabia, who had maintained their mastery over the world’s economics since the 1970’s. Our winnings now include avoiding a major conflict on the Saudi peninsula, and the ability to isolate Iran even more without seriously disrupting world energy supplies, thanks to US oil and natural gas exports.
Boone Pickens hated losing, as much as he hated bureaucracy and waste. America is now winning the energy game. Pickens showed us how to win. He will be missed. But his legacy lives on.