Texas billionaire oilman T. Boone Pickens has made no secret of his desire to open up the market for natural gas-powered vehicles. The founder of a company that develops natural gas vehicles, Pickens believes he has a foothold in an emerging field of clean energy resources – just as soaring gas prices and carbon emissions are causing many to look for alternatives.
He’s gotten kudos from environmental leaders for mounting a national campaign to lead the country away from its reliance on foreign oil.
But, critics are howling at what they’re saying is Pickens’ brazen attempt to get California voters to foot the bill for a $5 billion bond measure, Proposition 10, that would expedite natural gas development – and line his already-gilded pockets.
Pickens wrote the ballot measure, and his company, Seal Beach-based Clean Energy Fuels Corp., solely bankrolled the $3.25 million drive to get the initiative on November’s ballot – and is expected to spend millions more to get it approved by voters.
“You’ve got one guy funding the whole thing to benefit his own company,” said Lenny Goldberg, lobbyist for The Utility Reform Network who wrote the opposition argument for the ballot. “This ballot measure comes to its own conclusions, all of which benefit Pickens’ company, which determines on its own what’s the appropriate social way to go. But, even if it wasn’t self-serving, it would be bad public policy. ”
Pickens isn’t the first deep-pocketed investor who’s tried to get the public to finance an idea that he could gain from, said Bob Stern, president of the Center for Governmental Studies. Atlanta-based Scientific Games has made out pretty nicely since investing $2.3 million in a bond measure voters approved in 1984 to create the California Lottery. It is a major contractor with the Lottery.
“There’s nothing unethical about it, but it is something voters should take into account,” Stern said. “The question is whether the issue is so important they’re not concerned that one company may benefit. Or they could say it’s unfair – that even though they like the idea, they don’t like the idea of one company benefitting.”
Under Proposition 10, the $5 billion bond would be used to generate new developments in clean energy fuels and technologies, and would be repaid over 30 years from the state’s general fund at $325 million a year for a total cost of $9.8 billion. About 58 percent of the bond money – $2.9 billion – would be handed out as rebates to individuals and companies that buy alternative fuel vehicles. The rebates range from $2,000 for high-fuel economy autos to $50,000 for new or repowered heavy duty trucks that run on either natural gas, electricity, hydrogen or bio-methane.
“People are fed up with $5-a-gallon gas,” said Marty Wilson, the campaign manager for Proposition 10, who also serves as chief fundraiser for Gov. Arnold Schwarzenegger. “The frustration is that we don’t have an alternative. If we had a car that ran on something other than conventional gas, they’d go for it.”
At the fuel economy standard required – 45 miles per gallon – only the Prius could be included among hybrids currently on the market eligible for $2,000 rebates. But compare that to $10,000 rebates for natural gas passenger vehicles. And although plug-in hybrid vehicles qualify for the rebates, experts say the market for them isn’t there yet – and won’t be within the five-year window the rebates are being offered.
That leaves the bulk of the rebates to already-operating natural gas-powered trucking fleets – Pickens’ customer base. Clean Energy Fuels boasts the largest network of natural gas refueling stations in the country.
The measure does not include public transportation systems.
Environmental groups such as the Sierra Club, Environmental Defense Fund, Natural Resources Democratic Council and the Energy Foundation have yet to take a position on the ballot measure.
Still, environmentalists might have a tough time passing up the opportunity to develop a clean energy solution. Local governments are already pushing for cleaner trucks that pull cargo from ships to deal with pollution emanating from ports in Oakland and Los Angeles. In Los Angeles, some diesel trucks are being replaced by natural gas-powered rigs.
Wilson said it’s only natural to cultivate a technology that is ready to go.
“Natural gas is the most viable solution in the big-rig market in terms of a replacement fuel,” Wilson said. “In that there’s an increased demand for more natural gas as a transportation fuel, (Pickens’ company) will benefit. But it doesn’t all go to one company.”
Still, the rebated vehicles would long be obsolete by the time the bonds were paid for, which goes against the rationale for bonds, said Tony Rubenstein, a consultant on sustainable energy developments who helped write Proposition 87, a failed 2006 measure that would have taxed oil companies to develop alternative fuel technologies.
Pickens is best known as a money man for conservative causes, giving $3 million to the Swift Boat Veterans for Truth, which savaged Democratic presidential nominee John Kerry in the 2004 election.
He and his company are also top contributors to President Bush and Schwarzenegger, having donated more than $1 million to the governor, including $100,000 to Schwarzenegger’s redistricting initiative, California Voters First. Schwarzenegger has yet to take a position on Proposition 10. Last week, Pickens embarked on a separate national campaign to convince Americans of the need to end their addiction to foreign oil – and hop on board the natural gas and wind energy bandwagon. He wants to build a great corridor of wind turbines from Texas through the Great Plains to generate enough electricity so that natural gas now used to fuel power plants can be diverted as a fuel for cars and trucks – and reduce the nation’s reliance on oil by one-third within 10 years.
He’ll be asking for help from Congress, too.
By Steven Harmon
Contra Costa Times Sacramento Bureau
20 July 2008
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