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Pickens blames Koch brothers for natural gas vehicle plan's demise

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Pickens blames Koch brothers for natural gas vehicle plan's demise

The famed Oklahoma oil and gas man T. Boone Pickens on April6 blamed the Koch brothers for the failure of natural gas to get a larger footholdas a transportation fuel in the U.S. market.

Pickens said opposition by the Koch Industries Inc. family of companies helped doom a 2010legislative effort to provide a subsidy for building natural gas refueling stationsaimed at the tractor-trailer market, which could have been a key to solving thechicken-and-egg problem of natural gas suppliers and vehicle manufacturers. Thebipartisan bill fell short of the 60 votes needed to survive a cloture motion inthe Senate.

"Who beat us? We would have won that natural gas act andwe would have been well on the way today to going to natural gas for a serious transportationfuel. But it was Koch brothers that beat us," the BP Capital Management LP founder and chairman said duringa Hudson Institute event in Washington, D.C. Brothers Charles and David Koch heada vast network of mostly industrial companies and are leading donors to libertarianand conservative causes.

Over the course of a long, winding and folksy talk, Pickens saidhe still believes natural gas is the most advantageous fuel for the U.S. becauseit is clean, cheap and domestically produced. At the same time, he cheerfully confessedto making multiple errors predicting the future, such as believing U.S. oil productionpeaked in 1985 and not seeing the possibilities of horizontal drilling.

"Natural gas — you've got to have a sponsor, a champion,somebody that buys into it," Pickens said. "If you wanted to criticizesomebody, you could say, "Well, Boone, you haven't been much of a salesman."

"OK, I don't think I have either. I haven't been that gooda salesman," Pickens said. "It's a premier fuel. I can't believe it: It'sbetter than what you're using, and it's cheaper and it's cleaner."

Pickens said converting the U.S. trucking fleet to natural gaswould reduce oil imports by 3 million barrels per day.

"Why were [the Koch brothers] against it? Because they sellfertilizer, they sell plastics, they import 63,000 barrels of oil from the Mideast,and they take the ethanol subsidy," Pickens said. "So what does that mean?All of those I'm against, and all of them they're for."

"They envisioned that if you got demand for natural gas,the price would go up, and they — like all the rest of us — didn't know how muchnatural gas we had," Pickens said. "And they were enjoying the greatestmargins they'd ever had in their business. They did not want natural gas to getin as a transportation fuel."

On the other hand, many observers have accused the Pickens planof being a gussied-up version of Pickens' own trading book: heavy at the time withwind and natural gas holdings.

Dave Dziok, a spokesman for the Koch organization, took exceptionto Pickens' charge. "We oppose all forms of corporate welfare — including allforms of subsidies, such as cash payments, loan guarantees, anti-competitive regulations,restrictions on trade, mandates, import tariffs and tax breaks — even if they currentlybenefit us."

The Pickens plan, rolled out in 2008 with TV campaign commercialspaid for by Pickens, called for growing supplies of shale gas to shoulder the transportationburden and for the construction of huge power lines to connect wind in the Midcontinentto load centers along the coasts, cutting consumption of imported crude oil whilereducing the burning of coal for power. The plan, developed when prices for naturalgas and oil were over $10/Mcf and $130/bbl, lost its immediacy when prices plummetedin 2009.