The T. Boone Pickens Water Swindle
August 27th, 2008I meant to post this a couple of months ago, but it got lost in the shuffle. Now that it’s on Reddit again, in a different story, here’s the original.
Via: Business Week:
Roberts County is a neat square in a remote corner of the Texas Panhandle, a land of rolling hills, tall grass, oak trees, mesquite, and cattle. It has a desolate beauty, a striking sparseness. The county encompasses 924 square miles and is home to fewer than 900 people. One of them is T. Boone Pickens, the oilman and corporate raider, who first bought some property here in 1971 to hunt quail. He’s now the largest landowner in the county: His Mesa Vista ranch sprawls across some 68,000 acres. Pickens has also bought up the rights to a considerable amount of water that lies below this part of the High Plains in a vast aquifer that came into existence millions of years ago.
If water is the new oil, T. Boone Pickens is a modern-day John D. Rockefeller. Pickens owns more water than any other individual in the U.S. and is looking to control even more. He hopes to sell the water he already has, some 65 billion gallons a year, to Dallas, transporting it over 250 miles, 11 counties, and about 650 tracts of private property. The electricity generated by an enormous wind farm he is setting up in the Panhandle would also flow along that corridor. As far as Pickens is concerned, he could be selling wind, water, natural gas, or uranium; it’s all a matter of supply and demand. “There are people who will buy the water when they need it. And the people who have the water want to sell it. That’s the blood, guts, and feathers of the thing,” he says.
In the coming decades, as growing numbers of people live in urban areas and climate change makes some regions much more prone to drought, water—or what many are calling “blue gold”—will become an increasingly scarce resource. By 2030 nearly half of the world’s population will inhabit areas with severe water stress, according to the Organization for Economic Cooperation & Development. Pickens understands that. And while Texas is unusually lax in its laws about pumping groundwater, the rush to control water resources is gathering speed around the planet. In Australia, now in the sixth year of a drought, brokers in urban areas are buying up water rights from farmers. Rural residents around the U.S. are trying to sell their land (and water) to multi- national water bottlers like Nestlé (BW—Apr. 14). Companies that use large quantities of the precious resource to run their businesses are seeking to lock up water supplies. One is Royal Dutch Shell, which is buying groundwater rights in Colorado as it prepares to drill for oil in the shale deposits there.
Into this environment comes Pickens, who made a good living for a long time extracting oil and gas and now, at 80, believes the era of fossil fuel is over. So far he has spent $100 million and eight years on his project and still has not found any city in Texas willing to buy his water. But like many others, Pickens believes there’s a fortune to be made in slaking the thirst of a rapidly growing population. If he pumps as much as he can, he could sell about $165 million worth of water to Dallas each year. “The idea that water can be sold for private gain is still considered unconscionable by many,” says James M. Olson, one of America’s preeminent attorneys specializing in water- and land-use law. “But the scarcity of water and the extraordinary profits that can be made may overwhelm ordinary public sensibilities.”
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Over the next several years, Pickens continued accumulating water rights and began to lease other land, this time with the idea of creating the world’s biggest wind farm. “One of the great wind areas is right up where we are,” says Robert L. Stillwell, Pickens’ general counsel. “You can set it right on top of where the water is.” And since, one day anyway, Dallas may well buy both, Mesa could use a single right-of-way for the water pipeline and the electric lines. In Roberts County there would be real economic benefits from the wind farm. “The wind is meant to sweeten the deal,” says Representative Chisum. “The big money for Pickens is in the water.”
Research Credit: BW
Something tells me people are not going to settle for “buying” water. They might at first, but eventually the frustration will mount and armed conflict will develop. Frustration over water availability may become the trigger that starts the worldwide slide into chaos. People’s gut instincts tell them that land, air, and water are inalienable because they are necessary for survival. No one who doesn’t want an immediate fight on their hands tries to deprive another of air. Anyone who deprives someone of water essentially murders them. Regarding land, most of the wars and laws of history are about access to and occupation of land. If water becomes “real property” like land, it is safe to say that we are in for generations of awful wars. Heck, the warring is still going on over land, only not quite as awful as the ceaseless wars of archaic and medieval times. I think it is safe to say that they’ll be pickin’ T. Boone’s bones soon if he tries to privatize basic water supply.
@Peregrino:
The Iran-Iraq War of the 1980’s was essentially about control of a river known as the Shatal al-Arab. Water conflicts are not unusual in places such as the Middle East where fresh water is more scarce. Let’s hope that doesn’t become true of the whole globe!