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Timothy P. Carney: Congress gives your money to T. Boone Pickens

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T. Boone Pickens, like any good businessman, can read changing economic conditions. While he spent the 1980s as a “corporate raider” and oilman, in this age of Barack Obama and Henry Waxman, he has shifted his focus to lobbyists, feel-good green messages, and technology that depends on government subsidies.

The result: Taxpayers will now be subsidizing T. Boone Pickens, a billionaire—and Republicans and Democrats in Congress tell you it’s for your own good.
 
This week, three senators proposed special tax credits that will subsidize Pickens’ latest business venture, which he calls “the Pickens Plan.” Like his previous undertakings, Pickens has launched his plan as a way to get richer. Unlike his previous undertakings, the Pickens Plan is completely dependent on government subsidies—and this has ingratiated him to politicians and media.
 
The Pickens Plan, in short, in this: We should get more electricity from windmills and power our cars with natural gas. Pickens happens to be a major investor in windmills and natural-gas cars. Both of these energy sources are heavily subsidized, but not enough for Pickens to profit from them, apparently.
 
This week, Senators Robert Menendez, D-N.J., Orrin Hatch, R-Utah, and Harry Reid, D-Nev., at Pickens’ urging, sponsored a bill to double the huge subsidies natural gas cars already receive, and to provide a $100,000 tax credit for the construction of a natural-gas filling station.
 
Menendez, Hatch, and Reid introduced this bill eight days after the largest natural gas truck fueling station in the world was opened. The builder: Clean Energy Fuels Corp., founded and partly owned by Pickens. Pickens’ company is the leading builder of natural gas fueling stations, and thus the leading beneficiary of this subsidy.
 
The House version of the bill included $30 million per year to fund research into natural-gas cars—even more of your money that could line Pickens’ pockets.
 
So while our government is running a trillion-dollar deficit, which will lead to tax hikes and inflation that make us and our children poorer, Congress is thinking of creating subsidies and a private tax cut to a man on Forbes magazine’s list of the world’s richest people.
 
Pickens’ Clean Energy Fuels is also a leader in transporting natural gas. Plus, he has invested in the V-Vehicle Company, building a natural-gas-powered car.
 
And it’s not as if natural-gas powered cars aren’t already subsidized. The 2005 energy bill created special tax credits for natural-gas powered cars. There is also already a $30,000 tax credit for the construction of natural-gas fueling stations—a credit Menendez and Hatch would more than triple.
 
Why are natural-gas cars so subsidized? Because they are so unprofitable. Honda’s methane-powered Civic costs nearly $10,000 more than a regular Civic (unless you go to a dealer who’s stuck with these cars after betting on gasoline prices to continue to rise), and doesn’t come close topaying for itself in fuel savings.
 
If natural gas stays inexpensive, and oil climbs again, the market could drive business to natural gas cars. In fear that might not happen soon enough, though, Pickens was on Capitol Hill this week lobbying for subsidies.
 
Pickens has long nurtured ties with government (he began lobbying for natural gas subsidies back in 1992), but his Pickens Plan differs starkly from the way he did business back in the 1980s. He used to make money through commerce and the power of the market. Now he makes money through subsidy and the power of the government—and for this he was abused.
 
Perversely, his recent shift—from selling stuff (such as oil) that people want to buy, to selling stuff (like gas cars and wind power) that people buy only when it’s subsidized or mandated—has elevated Pickens’ reputation from greedy capitalist to world-saver.
 
Pickens was one of the bad guys in a 1992 book Den of Thieves where he was derided as a “corporate raider” and named by one reviewer as oneof “the main players behind why the 1980’s were characterized as the ‘decade of greed.’ ” The offense back then—in addition to selling oil—was his penchant for “hostile takeovers.”
 
“Hostile takeovers” is an inaccurate term for what Pickens used to do. The management didn’t like them, sure, but the transactions in question consisted of shareholders voluntarily giving their stock to Pickens in exchange for Pickens’ money.
 
Pickens’ new bid actually is hostile. I don’t want to fund his windmills or methane cars. But if I refuse, the IRS will come after me. But instead of“greed” it’s dubbed as “green.”
 
Timothy P. Carney is The Washington Examiner's Lobbying Editor. His K Street column appears on Wednesdays. 
 
 

 

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