Exclusive Interview With T. Boone Pickens

T. Boone Pickens has had a hand in American energy since the early 1950's, and at 86 years of age, he's yet to slow down. Motley Fool contributor Jason Hall recently sat down with Pickens and talked about everything from American energy independence, to environmentalism, to Pickens' philanthropic efforts. Watch the video below for the full, in-depth interview with one of the most influential names in American Energy. If you prefer, read the full transcript, below the video. 

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Interview Transcript

Jason Hall: Hey Fools out there, it's Jason Hall here, and the gentleman to my left doesn't need that much introduction. It's T. Boone Pickens. Boone, thank you so much for agreeing to sit down with us today.

T. Boone Pickens: You bet, Jason.

Hall: It's a rare opportunity to tap into your mind, when it comes to somebody that has the legacy and experience, and really the vision that you've had, in terms of energy.

Pickens: I've been there for the whole show.

Hall: Yes, just about.

One of the things that I think is really interesting if you look at your history, you've typically nailed it when it comes to knowing how things are going to play out, with not just oil and gas, but over the past decade with your proponence of alternatives like wind, and that sort of thing.

I'd love to hear your thoughts a little bit on that, going back to when you first got into the oil business, going on through the more recent times.

Pickens: Well, when I first got into the oil business, I was 16 when I roughnecked on Earl Evans' rotary rig in Hughes County, Oklahoma. That was my first introduction. I worked as a swamper the next summer, then went to Oklahoma State, got my geology degree, went forward from there, and I've been in the business ever since.

I got out of school in '51; that's over 60 years. I saw my first frack job, 35 miles west of where we're sitting, in 1952.

Hall: The new technology, hydraulic fracturing.

Pickens: Yes. It's interesting, because the President of the United States, I've heard him say that fracking was developed by the Department of Energy, their research, 30 years ago. Okay, well it was 62 years ago I saw that first frack job. I don't know where in the hell everybody else was, but I know where I was! It's funny.

Hall: I think the biggest thing that's happened in recent times is they've just been able to refine that technology, but it's nothing that's really specifically brand-new.

Pickens: No. You were doing exactly the same thing. You were getting your pump pressure up, and your injection volumes, you were trying to raise those.

I saw where we got 50 barrels a minute into the formation which, that was a huge deal -- lots of power and everything. Well, what are you doing now? You're doing the same thing, only you're getting more fluid in per minute, and more sand.

Hall: A lot of that is just because of the technical capabilities with newer equipment, newer capabilities, right?

Pickens: It is, and I'm amused that somebody says this could cause earthquakes. Get out of here!

Hall: Yes. Now, there are also concerns that people have with groundwater and that sort of thing. From my understanding, typically when you're talking about these well depths, versus the water table ... do you want to talk a little bit about that?

Pickens: Sure. Right here where we're sitting (Texas Panhandle), the water table is about 15 feet down. Then you have about 300-400 feet of saturated water sand. That's the aquifer, which is a part of the biggest aquifer in North America.

Hall: The Ogallala?

Pickens: Ogallala. It extends from Midland, Texas, to the South Dakota border, across eight states. There have been a million wells fractured in -- well, below -- the Ogallala, but over that area of the eight states, where you have the aquifer, and I don't know of any damage to the aquifer.

You're fracking from one and a half to two miles below the aquifer. How in the hell you're going to frack back into the aquifer, I don't know.

Hall: Well, there's no oil or gas there, so they're not really interested in going horizontal at 500 feet underground, anyway. They're going to get a mile or two miles down, before they do any horizontal drilling and start doing the fracking, right?

Pickens: That's right, yes.

Hall: Let's shift gears and talk a little bit about wind energy. You and I spoke earlier about how Berkshire Hathaway's MidAmerican Energy has invested a tremendous amount over the past couple of years, in adding to their wind.

You were really an early proponent of wind energy in the United States. Do you want to share a little bit more about your vision for wind, and how you see that continuing to play out?

Pickens: Wind will work. But it's priced off the margin, the power generated from wind turbines. The margin is natural gas. Natural gas at $6, you can do wind. But natural gas at $4, it's very, very hard to do. You're going to have to then subsidize to make it happen. If you want to do that, so be it.

The Germans have more coverage of wind turbines, and their country has more, than any other country. Why? Because it's a national security issue with them. We don't have that same issue. They subsidize to get wind power because they don't want to be so dependent on Russia for natural gas. They have a history with Russia that goes back to World War II. They just don't trust the Russians, so they pay, subsidize, and have wind energy.

Does it work? Of course it works. But it's expensive. Here, we do not have the same dynamics.

Hall: Because of the resources that we have.

Pickens: We've got the best wind in the world, from Sweetwater, Texas to the Canadian border. That corridor, you can put all the wind in there you want to put in there.

Hall: I've heard it referred to as the "Saudi Arabia of wind energy" before.

Pickens: Yes, that's exactly what you have. It's a huge resource, and you can't wear it out. It's there continually, it doesn't decline. But we also know the wind doesn't blow every day, so for power generation you have to baseload with either coal, natural gas, or nuclear.

All of that works, and we should use all of our resources in America.

Hall: Right.

The President, for his entire administration, has used the term "All of the Above." Whether we've necessarily seen execution on that policy or not, is another story. This brings up another topic that you've touched on many times, and that is the energy policy in the United States, or lack thereof. Would you share your thoughts on that?

Pickens: Well, every country in the world has an energy policy, but America. That's it.

Why don't we have an energy policy? I can go back to Nixon. Somebody said further back than that. I said, "probably there, but I can remember Nixon." He was going to have an energy plan. Every President from Nixon forward has said, "Elect me and we'll be energy independent," but none of them ever gave you an energy plan.

The President that was closest to a plan was Carter. Remember, he got in the Fuel Use Act, and he was convinced that America was fast depleting oil and gas reserves, and that we were going to have to rely on the Mideast for our oil.

I can't say I didn't agree with him. I thought kind of the same thing.

Hall: Well, it happened.

Pickens: Yes. We peaked on oil production in the United States in 1970; 10 million barrels a day is what we had, and it declined to 4.5. We're back up to 8.5, and could get back up to 10. That all happened because you had a very aggressive industry that did an excellent job and found, through technology advances, that you could fracture the shale and you could drill the horizontal wells and everything else.

But that was our industry, in America, that developed all that. They should get credit for it. How? Just a pat on the back's good enough. There's no prizes or anything else for them, but they're almost criticized or whatever -- when they have done a fantastic job.

When I got out of school in '51, 90% of all the oil found around the world had been found by American geologists. Then there were some other companies, foreign companies, that were developed over time.

But we're back at the point that the advances that are made, technically, are made by our industry in the United States. You don't ever see anything come out of any other foreign company or anything else. It's the United States that's developed it.

Hall: One thing that's played out over the past several years is that a number of foreign companies have bought interests and agreed to joint ventures with American producers, in the U.S.

Pickens: That's right.

Hall: A lot of my understanding is, it's primarily to try to develop some of that expertise that American energy companies have.

Pickens: It is, but the Ukraine/Russian problem that is very recent ... we have politicians get up and say, "We've got plenty of natural gas. We'll just send it over to Europe. We'll take care of that problem."

Well, no. The first natural gas that will be exported out of the United States will be the Cheniere Energy plant at Lake Charles, Louisiana. It's already under contract. That'll be the first that will go out of the United States, which will be early '16.

Hall: Eighteen months from now, essentially.

Pickens: Yes. But you're talking about two billion a day -- insignificant on a problem for Europe. But Europe? Hey, tell them, "We'll help you technically. We can help you on the horizontal, with the fracking and all, but you have shale too." Europe has shale.

You've got France, that says, "Moratorium. Not going to drill anything."

Okay. "Hey, that's your problem, fellas." We don't need to try to solve the problem for Europe. They have shale. Develop your own shale.

Hall: That's a position that you've stood on for a number of years; as long as the United States is importing oil, especially from countries that don't really like us very much at all, and what we stand for, it doesn't necessarily make sense to export that commodity.

Pickens: None. You have no energy plan, though.

Here we are -- all at once we have an abundance. We have more natural gas than any country in the world, and we are in good shape for 100 years on natural gas. We need to decide how this is going to be deployed -- no plan.

Hall: If you could, talk a little bit about the disjointed way our government functions, when it comes to energy. Thinking of the Keystone XL Pipeline alone; how many government agencies would have an involvement in that? I think that's a good example.

Pickens: Energy in America, there's no office that you can go to and talk to them. You say, "Well, the Department of Energy." Well, the Department of Energy, they spend most of their time managing nuclear facilities in the United States.

Is it a government agency that has a purpose? I'm not sure. If you go back and see the charge for the agency, I believe that the Department of Energy came into existence in '78, in the Carter administration. Their primary charge was to get off of imported oil -- "As best you can, come up with a plan." I've never seen anything come out of the Department of Energy.

But now we come down to the Keystone Pipeline, look who's going to make the decision on the Keystone Pipeline. The State Department, because it's from Canada to the United States. It's an international crossing, so the State Department has the issue. Well, they can't make the decision. They struggle with it.

But now if we export oil, then we're talking about that because we have a lot of light sweet crude, and our refineries have been ... not rebuilt, but they've gone to ...

Hall: They're set up to handle the stuff out of the Middle East, right?

Pickens: Exactly. Heavier crude, dirtier crude. Venezuelan crude comes in, we process it in the United States. So, we have a lot of light sweet that's available and now we're talking about exporting that. Well, that decision, I'm told, will be made by the Commerce Department.

So you say, "Who is it that has the responsibility for managing oil and gas imports, exports, reserves, what have you?" It goes around the curve. There's no plan, is where you find yourself.

Hall: Right. That doesn't even take into consideration our foreign military interests, that exist in a lot of ways to protect oil assets for other countries.

Pickens: If you go to Washington and talk to some of the Senators, I say, "Look, you ought to get on your own resources, and we have an abundance of resources in America -- they just need to be reviewed, looked at, decide how you're going to manage -- but all the heavy-duty trucks should be over to natural gas because, one, it's 20-30% cleaner, it's cheaper, it's domestic ... it's ours."

They say, "No, that's picking winners."

Picking winners? Hey, look at the Mideast. The (U.S. Navy) Fifth Fleet is there, protects the Strait of Hormuz. Fifth Fleet, United States -- you're protecting the oil shipped out of there for a cartel. OPEC is a cartel. Here the Fifth Fleet is, protecting a cartel's oil.

Seventeen million barrels a day comes through the Strait of Hormuz. How much of that comes to the United States? Ten percent -- 1.7 million. Where does the rest of the oil go? China. Europe.

I ask them at the Pentagon. I say, "Gosh, can't we charge them for protecting the oil to go to China and to Europe?"

They said, "Yeah, you can charge them. They won't pay you."

Okay. Why do we do that? Why are we the nice guy -- or the stupid guy, I don't know which -- to do that? Because if you put the cost of the Fifth Fleet on the oil that comes to us from OPEC ...

Now, not all OPEC comes from the Mideast; Nigeria, Angola, Venezuela, are all OPEC countries. But nonetheless, if you put the cost of the Fifth Fleet on there, now we have really expensive oil.

Hall: Right, and that's something that I don't know that everyone necessarily considers, but that's a real cost.

Pickens: It is a real cost.

Hall: It's absolutely a real cost.

Now, you mentioned natural gas for transportation. It seems like, over the past 8-10 months, there's finally started to be some pretty serious momentum in heavy trucking. We've seen some momentum over the past several years, and some public transit and waste removal and that sort of thing.

But it seems that heavy trucking, because of that 25-30 billion gallons of diesel (annually), is a pretty significant thing.

Pickens: That's over 3 million barrels a day of imported crude. Not all of it comes from imports, but you know what I mean. If you did put it to that, and you took out the diesel used for heavy duty trucks, you could reduce the 4 million barrels from OPEC by 75%.

Hall: One of the things about making that kind of transition that people often don't necessarily understand real clearly, if you could speak to it, is the concern that, "Okay, if we increase the demand for natural gas by shifting a lot of transportation to it, it's going to cause the price of natural gas to skyrocket." That's not necessarily the case at all, is it?

Pickens: Skyrocket?

Hall: Yes.

Pickens: What is the superior hydrocarbon? It's natural gas. It is cleaner, and it's a better fuel if you use it in all the ways that you can use the natural gas. But it is superior to oil. Now, compare them on a BTU basis. It's 6:1.

Hall: The actual energy content.

Pickens: That's right. On a BTU basis, 6:1 is what it is, so $100 oil would be $16 natural gas. We have never seen natural gas higher than $13, and that was just for a minute.

Hall: It's when we didn't think we had any.

Pickens: That's right. It ran up to $13. Now, you've been all the way back down to $2 from that point. Today, natural gas is $4.50, so you're still 1/3 of the BTU equivalency, and you're not giving any credit for it being cleaner.

Now, let's look around the world. What is the natural gas price in the Mideast?

Hall: A lot higher than it is here.

Pickens: $15.

Hall: Japan's the same way.

Pickens: Same way -- and it has even been higher. Europe, a little less -- $12/$13 -- but the countries there that have the reserves in the Mideast and all, they will index their natural gas to the oil.

Hall: Right, so it moves hand-in-hand.

Pickens: It makes sense.

Here, it's two markets, and that is what people have said. "If we get it over to transportation fuel, the price will go up." Well, yes the price will go up. The price is too cheap, where you are.

But today you say, "Well, it's too cheap. We have all this gas. Let's take advantage of it." You are taking advantage of it. There are businesses moving back to the United States.

Governor Corbett, in Pennsylvania, told me a couple of years ago, "I have companies that have moved back into Pennsylvania I never thought would come back." Why? Because of cheap energy, is why they've come back. You have plastics coming back. Fertilizer is a huge business in the United States because you're using natural gas for the production of fertilizer.

It's interesting to see attitudes and all, and how this all unfolds, but focus on this point. There are 1,850 drilling rigs running in the United States today. They're broken down this way: 350 of them are on natural gas, and 1,500 of them are on oil.

It's because the oil price is $100 a barrel, so the rigs work where they can make the most money. It all makes sense -- 350. What's going to happen is, as your rig count has gone down, your production of natural gas will go down also. As it goes down, the price goes up.

Hall: You were talking about the energy content and the cost -- just to put it in some real-world numbers. It works out, for every dollar that natural gas moves up or down, it's only about $0.12 per gallon equivalent, for transportation.

Pickens: That's exactly right. For instance, you're $4, say, for natural gas today.

Hall: That's about $0.50 a gallon, roughly, is the commodity cost.

Pickens: Yes. You can double that ...

Hall: And it doesn't move the price that much.

Pickens: No.

Hall: Right. I think that's a really important point that most people just don't always necessarily understand.

If we could, I'd like to go back to something that I think a lot of people still don't necessarily know about your history as a business operator, and as an investor. Especially during the late '70s through the early '90s, some people called you a corporate raider. I think probably a better way to describe you is that you were an activist investor, before the term even existed.

I would like to hear your thoughts on, especially in the energy industry -- the differences in management today, versus the things that you saw in terms of management; how they would operate businesses from the view of the best interests of the shareholder. How do you think that's changed?

Pickens: Well, when I started, I did the United Shareholders Association. It was August of '86, and that's after I'd been through years of managements that really did believe they owned the companies, and did not consider the shareholders.

Hall: These were often managements that had very little personal stake in the business, in many cases.

Pickens: Oh, I looked at proxy material and annual reports, and everything else, and you'd see where somebody who was a director of a company owned 100 shares, and 500 shares was pretty common, but thousands was uncommon -- very uncommon -- to see then.


When we tried the Gulf deal in '83, the CEO of the company had been there 35 years, and he owned 23,000 shares. I said, "Please, Mr. Lee, where do you invest? It's not in Gulf Oil. You're putting your money someplace else."

I knew him well, and it infuriated him. He said, "I don't like for you to say that."

I said, "But it's true."

Well, he said, "I don't have much money in Gulf Oil."

I said, "Why not? You're running the company. Does it have a future? Is it a good investment? How can you ask other people to buy Gulf, when you don't buy Gulf?" I'm sitting here with several hundred million dollars invested in Gulf, so I am a shareholder that understands what shareholders want. They want the price to go up.

The value of Gulf Oil on John S. Herold was $80-$90 a share, and the stock had been in the low $30s for 20 years.

When we first started buying Gulf, it was $30, and when the company -- then, we caused it to happen. I wish we'd been able to take it over. I think I could have done a very good job of developing the assets of Gulf and had it go to the market. I think it would be reflected in the market.

Well, we weren't big enough to take it over. It was a $13 billion acquisition, and Chevron made the purchase, so we kind of pushed Gulf to Chevron. We made a lot of money out of it. We made over $800 million, our group did, in it, which was a lot of money at that point. It was a $13 billion acquisition by Chevron; the largest at that point, ever, in corporate America. Gosh, there are $13 billion ones now ...

Hall: Just about every week you hear of something like that.

Pickens: Yes, there's another one -- and again, $100 billion; huge situation.

We think, I do, that we were a part of that transition that developed in corporate America. But to call me a corporate raider -- and they said I was an asset stripper; I was going to take this company and bankrupt it. Really?

I'm going to make a $100-$200 million investment, and bankrupt the company? It doesn't make sense. Look at my record. Did I ever bankrupt anything? No, I never did. Why? But the media picked up on that. The PR that was protecting the corporate management, the lawsuits that came out of that, and everything else ... all of that was good for corporate America.

Hall: Often, it just boiled down to, as you said, managements that weren't particularly focused on what was best for the actual shareholders.

Pickens: Well, I'll tell you a story -- everybody's dead.

Fred Hartley was the CEO of Unocal. Fred was a very difficult personality. I knew him very well. I was on the API Executive Committee with him for a period of time, and he was a pain in the ass to work with. That's the way you describe him -- nobody would argue with you if you said that about Fred.

Fred ran Unocal. Unocal was the Union Oil Company of California. They changed the name to Unocal, but it was founded by the Doheny family in California, and Bill Doheny was the "last of the Mohicans." He was on the Unocal Board.

Bill and I played golf together, were friends, belonged to a club together in California out at Palm Springs. Bill told me, "you know, Fred's very hard to deal with." He said, "Last month, I said to Fred in front of the Board of Directors, that we have the lowest dividend of our peer companies."

Well, now, Doheny is the biggest shareholder on the Board. He said, "Would we consider raising our dividend?"

He said, "Fred, very hostile, looked at me and he said, 'Goddamn, Bill. Why in the hell would we want to give a bunch of people we don't even know, a lot of money?'"

I think that was the attitude of a lot of CEOs.

Hall: Very, very prevalent at that time.

Pickens: I think oil companies today should give greater dividends.

Hall: Yes. One oil company that I think does a great job -- Rex Tillerson at ExxonMobil -- I think they do a pretty good job of returning value to shareholders through share repurchases and a pretty consistent dividend.

Pickens: Tell me about how share repurchase helps the price of your stock.

Hall: I think there are good share repurchases and there are bad share repurchases.

Pickens: Tell me about that.

Hall: It's just like investing in a company, yourself. If you buy a stock that's overvalued, you're not making a wise investment. If a company is able to execute a good share repurchase program over time ... I guess what it boils down to is ...

Pickens: You mean if they're buying it cheap?

Hall: If they're buying it cheap, yes.

Pickens: Okay, well just a second. You're buying it cheap from your shareholders.

Hall: Right.

Pickens: I think you should make the price -- if I look at Exxon or any company, saying it's worth two or three times what it's selling for -- so now I'm buying stock back from my shareholders, cheap. Well, get the price of it up.

Hall: So, you're not a fan of share repurchases, by companies.

Pickens: Why do I want to take advantage of my shareholders, and buy the stock back, cheap?

Hall: Right.

Pickens: If I want to buy it back, buy it at market value. You're working for the shareholders. You're not trying to figure out how to buy the stock back from them cheap -- take advantage of them because you know more than they do?

Hall: Fair enough!

Pickens: I know this game, but to me, the way you move the price of your stock up is increase your dividend. Exxon's dividend is roughly 2.5%.

Hall: Roughly.

Pickens: Okay, 2.5% is not much of a yield for a company that makes as much money as they do.

Hall: That's true.

Pickens: I looked at Exxon -- and I don't think this is the case today -- but several years ago I looked at it, and Exxon had $70 billion EBITDA. They had $35 billion CAPEX, and they had a $7.5 billion dividend, which left them $30 billion.

Hall: A lot of cash.

Pickens: And they did share buyback. Well, to me, why don't you take another $7.5 billion, double your dividend from 2.5 to 5%?

Hall: And there's still a lot of capital left over, after that.

Pickens: But watch what happens to the price of your stock. Okay, Exxon has finally worked up to $100 a share.

Hall: As an oil man, as an energy guy -- which you are -- you've done a tremendous amount when it comes to some environmental causes, and you've done a lot with your property with conservation efforts. I'd like to hear you talk a little bit about that.

Pickens: Some people like to say, "If you're an oil man, you can't be an environmentalist." No. You can be an environmentalist, and I have been a good steward of the land and everything else.

They said, "Oh, OK, your ranch. But that's an isolated piece. Are you a good steward every place else?" Well, of course I am. You don't change personalities when you leave your ranch and go someplace else.

I've been a great protector of wildlife. Do I hunt? Yes. I have more quail than anybody in Texas, because my land -- I have almost 70,000 acres here; 20,000 I have 400 Angus cows on, and the other 50,000, I haven't had any cattle on it in 20-25 years.

That has been turned back to wildlife, and consequently I have good quail hunting. But we suffered during the drought that we've just gone through. A normal year for me would be 25,000 birds that I would raise.

Hall: On your land.

Pickens: Yes, 25,000. When I went into the season, the first of November, due to my taking care of the wildlife, the quail in particular, I'd have 25,000 quail, and I'd expect to kill 10% of those.

But when I got around to the nesting season in March/April of the next year, after the season, I'd killed 2,500 quail, but -- just through the way quail live, die, and reproduce -- I would go into the nesting season with 6,000 birds, is all.

Hall: Just through the way Mother Nature operates.

Pickens: That's right. I was taking 10%, and I was losing to predators, to others -- and I'm not big on trying to control predators. They've got to live, too. They're part of the ecosystem. I don't encourage them, but I don't spend much time discouraging them, either.

Hall: Right.

I think one of the things that you've also done is -- some of the oil and gas drilling interests that you have on your own property -- at times you've really challenged those producers that were working on your property to live up to their end of their agreements to return the land back to its state.

Pickens: When you're going to have oil and gas production, there is no question you've got to bring in drilling rigs. Then you end up with producing pads, you end up with tank batteries, the whole thing.

In a way, it's unsightly, but the United States is the only country in the world where the minerals are owned by the landowner. Not in Canada, not in Europe, not in Australia. No place else but the United States are there freehold minerals.

If you're going to develop the oil and gas, then you're going to have to take some damage on the surface. But you can minimize that damage. We work very well with the producers on my properties. I'm one of the producers on my property. I have wells on there. We're producing about 4,000 barrels of oil a day, and 25 million cubic feet of gas, and we have three rigs running on the property right now.

That's a lot of activity that you have, but we've worked with the producers. We're not going to drill in the quail country, so we maneuver around. But you're drilling horizontal wells, so it's not a target vertically drilled -- so it's easier to move your pad locations where your rigs work, than it is if you're going to drill vertically.

We scoot them over here 300 feet, get them out of the quail country and all ...

Hall: They can still access those resources that might be a mile that way, or half a mile the other way -- not underneath it.

Pickens: That's right. Here, we're drilling down 8,400 and we start the curve. Then we drill -- 5,000 feet is kind of a normal horizontal. They've gone right under this building, going back north. The rig's sitting back south, but has gone right under the improvements here.

Some people would say, "Oh, my God, I can't stand that." Well, I know what you can do.

Hall: It's almost two miles under the earth, that that's happening.

Pickens: Exactly.

Hall: A lot of bedrock between here and there.

It really seems that, in a way, because of the horizontal drilling technology, environmentally speaking it should be simpler for drillers to be able to access resources with less impact on the environment, in a lot of ways.

Pickens: Exactly. That's the way it works. But you've seen some places where you have wells on 10-acre spacing which is, oh 30 miles southwest of here, at Borger. Those wells were drilled over there in the old Panhandle Field, back in the '30s, '40s, and '50s, through that period of time.

Those were drilled on vertical, with 10-acre spacing. Pretty disruptive to the surface, but a lot of oil was produced.

Hall: I'd like to close with a little bit of talk about philanthropy. You've signed the Giving Pledge, and you've already donate a significant amount of money. Could you talk a little bit about your philanthropy and your view on your long-term legacy when it comes to the wealth that you have accumulated, what you'd like to see happen?

Pickens: I wanted to give so I could see the results. You can't give testamentary gifts and see the results!

I wanted to see what would happen in the giving. Well, I made a lot of money. After I left Mesa in '96, I ran my net worth up until one point it was $5 billion. I was very generous during that period, giving this money away.

I was single at the time, so when it's one person making the decision ...

Hall: It's a little simpler.

Pickens: Yes. If you want to make a decision, it's just you. I can still remember the gift to Oklahoma State (University, Pickens' Alma Mater), to start the construction of the new football stadium. It was $165 million, and it was December of '04 when I gave that.

I was peaking out on net worth at that time. I got up, and then got hit by the '08 deal. But at that point, during that period I gave away a billion dollars -- like this. Not, "When I die, you're going to get it."

Well, when I die, they're going to get it too. They're going to get it again -- and that's the Giving Pledge that Gates and Buffett put together. Half your estate goes to charity.

Hall: You've already given away a massive amount of your total net worth.

Pickens: What happened to me, I ran it up to five and got hit in '08-'09, and I lost two, gave away one, and I've got one left. So actually, I've given away, now, more than my net worth.

Hall: More than you have.

Pickens: But I'm coming back!

Hall: You are.

Pickens: I've got stuff going on that I'll get it back. I probably will never get to the five, but I think I can get it back to two, maybe three.

Hall: Boone, I'm not going to count you out!

Pickens: Oh, don't do that! No, there have been people counting me out before, and that's a mistake.

Hall: Not a good bet.

Pickens: Because I love to make money, I enjoy giving it away, and I love to work. I can't even imagine not going to the office, and just sitting around. That would be a sad day for Boone.

Hall: Here recently, you've turned 86.

Pickens: Eighty-six.

Hall: You're saying here, on camera, you're not planning to retire.

Pickens: No! In a box, is the way I'll retire. No, I really mean that. There's got to be some place that I'm not as productive as I am now. I understand I'm in a game I'm going to lose.

Hall: We all lose this game.

Pickens: Nobody escapes. You're going to die -- but I'm going to enjoy life as long as I can. And life, for me, is to work, make money, and give it away.

Hall: You're an inspiration to a lot of people, and your visionary leadership in energy is definitely going to leave a legacy that outlasts all of us.

Pickens: Well, I hope so. I hope they remember me, 10, 20, 30 -- maybe 100 years from now -- and say, "Yeah, that old guy, he did some unusual things." I hope that's the way you're remembered.

Hall: I think that's going to be the case. Boone, thank you so much. I appreciate you sitting down with us.

Pickens: Sure. Good.

Hall: Thanks for watching, everybody. Fool on!

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Read/Post Comments (8) | Recommend This Article (45)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 17, 2014, at 10:24 PM, TMFRhino wrote:

    How does this still have no comments? Very nice interview, Jason!

    -Eric

  • Report this Comment On June 18, 2014, at 12:22 AM, TMFVelvetHammer wrote:

    Thanks Eric.

    I guess Boone and I said it all...

    -jh

  • Report this Comment On June 18, 2014, at 3:51 AM, kamsmart wrote:

    Great interview! Enjoyed reading it! Thaks Jason for following the oil and Gas industry and writing good articles and conducting eye-opening interviews and being active ont he MF boards as well!

    Regarsd,

    Kamran.

  • Report this Comment On June 18, 2014, at 8:37 AM, DarthWader wrote:

    Jason -

    Soooo good! Thank you for putting in the time and energy.

    Wader

  • Report this Comment On June 24, 2014, at 8:21 PM, mm4AUTigers wrote:

    While share buybacks at a cheap price are a bad deal for shareholders exiting their position, it seems to be a lucrative deal for Fools with a long-term perspective that continue to hold shares.

  • Report this Comment On June 28, 2014, at 12:08 AM, TMFVelvetHammer wrote:

    >>While share buybacks at a cheap price are a bad deal for shareholders exiting their position, it seems to be a lucrative deal for Fools with a long-term perspective that continue to hold shares.<<

    mm4AUTigers,

    First, Go Dawgs. I have to get that off my chest.

    Second, I agree with you. This is one of a number of areas where I disagree with Pickens. If sellers want to sell, so be it. It's not management's job to keep investors from selling, but to improve per-share value.

    Share buybacks on the cheap do just that.

    -jh

  • Report this Comment On July 05, 2014, at 7:53 PM, ronbeasley wrote:

    Great interview. But I think a point is missed on share buybacks. Most companies use them to fund employee benefit plans. If those plans were directly funded with cash, the shareholders would also "pay" through reduced earnings. Instead, the company uses that cash to buy back shares and fund benefit plans with those shares.

  • Report this Comment On July 08, 2014, at 5:36 PM, DavidJZ wrote:

    Thanks for the interview - I learned a lot about TBP.

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