In 2010, T. Boone Pickens will receive his first order of wind turbines, a step he hopes will set a new era of energy efficiency into motion. Pickens, the iconic founder and chairman of BP Capital Management and the star of his own commercials touting the “Pickens Plan” and the benefits of wind energy, is hoping to ride the winds of change to a more sustainable future for America.
Pickens is advocating for a commitment to wind energy production on a large scale through tax subsidies and other measures. This will interject more renewable energy into localized power grids, and Pickens estimates that 2,000 jobs will be created initially — and grow to 138,000 over time. He says committing to wind energy will get the U.S. out of the current economic downturn and will increase security while reducing costs. Although Pickens has made his fortune in oil, he says decreasing foreign oil dependency by creating a renewable energy network will place U.S. businesses in a better financial position. Smart Business spoke with Pickens about sustainability and how all businesses can profit from investing in it.
Q. How can a business improve its bottom line by investing in sustainable energy?
I don’t know that they can immediately. It’s going to take several years to get renewable energy into the system to a level that will make a difference. It will eventually lower the price of your power. It’s just going to take some time for that to happen. Other sustainable practices will suffice until then.
Q. Will the businesses that haven’t invested in sustainability now lose future benefits?
The hope is that a business won’t be able to say, ‘I’m on renewable, and my competitor isn’t.’ Hopefully, a more efficient power grid will be implemented and all energy sources will be incorporated. But you have to be planning ahead, and if you haven’t already, you have to start that plan today. To quote my father, ‘A fool with a plan can outsmart a genius with no plan any day of the week.’
Q. How can CEOs bettereducate themselves on sustainability in ways that will help their industries in the future?
They need to know we have to do something about our own energy and [that] there are several components to the plan for it to be successful. Sustainability isn’t just wind or solar. You’re going to have to get off the foreign oil, but wind and solar do not replace the foreign oil. Foreign oil isn’t used for power generation, so we’re going to have to put it together and use all of them to have a more sustainable business. Replacing foreign oil with natural gas will be step one. This should be something in businesses’ plans to work their way into understanding what the future holds. Using natural gas for transportation fuel will reduce the need for foreign oil.
Q. What will it take for the majority of businesses to operate at a sustainable level?
The government is going to have to show that they’re ready to go with different opportunities in energy. With that, they’re going to have to put a production tax credit in, which would show the world that we are behind wind and solar. When they do that and put a 10-year tax credit in, that will bring the manufacturers into the area to use the forms of energy and help better develop the process. But if things work according to plan, you’ll be getting your energy from a source that pulls from all energy sources and businesses won’t be able to pick and choose what they use. This source will include renewable, coal, natural gas and nuclear. This will come with upgrading to a national grid. You wouldn’t be able to identify which one’s which — it would be a single energy source that it is pulled from. A national grid upgrade could make energy efficiency 20 percent better than what it is now.
Q. Is the issue less pressing for businesses that were pushing for sustainable energy now that gas prices have decreased?
That way of thinking won’t work because we’re importing almost 70 percent of our crude oil now, regardless of what price we pay for it. If you’re paying $70 a barrel, it’s half the cost it was, but the percentage of imports remains the same, and I perceive that to be the most critical problem that the country has from a security standpoint. We’re relying on half of the oil we import coming from the Mideast and Africa, the two most unstable places in the world.
Q. Why should businesses care about U.S.dependency onforeign oil? How does the dependency directly affect them?
The price of oil will continue to go up, and businesses won’t have any choice but to pay the price. By using sustainable energy from the U.S., there won’t be a price hike. There’s been a yo-yo effect over the last 40 years that started in the ’70s. When the price of gas runs up, they over-supply the market, drop the price and any idea about using renewable is stopped. You can look back and the pattern is the same except the price never goes down as low as it was before. So now you’re working off a price that was up to $140 a barrel, which is now down to $60 or $50, but do you like paying $50 a barrel knowing the price is going to go back to at least $140 at some point? You don’t have any control over your destiny using foreign oil. As a businessperson who sees a fuel that runs cleaner, is domestic and creates more jobs in America, I would say that certainly beats buying foreign oil. With foreign oil, the money’s gone, no jobs came with it, no taxes were paid, and it didn’t help the economy. It’s just a drain on us.
Q. Why should businesses care about the Pickens Plan?
Businesses should see the Pickens Plan as a great opportunity to take advantage of cheap gas and oil. This is a once in a lifetime deal for us. Cheap oil has caused us to be addicted. Every time we talked about renewables, every time we started up new U.S. drilling, the Mideast oversup-plied us and drops the prices. If we don’t do anything more than what we’ve done in the last 40 years, then in 10 years forward, we’ll be paying $200 or $300 a barrel and we’ll be importing 75 percent of our oil. And then we’ll be broke. You can’t think the future is foreign oil. The future is sustainables. Businesses also need to consider plans that aren’t just for their business, but a way to improve America. That’s part of good business practices.
HOW TO REACH: T. Boone Pickens, www.pickensplan.com