Fact Sheet

T. Boone Pickens: Oil Tycoon

Drilling Water in Texas
D espite his energy investment funds losing $1 billion during this year’s market
collapse and his personal loss of about $270 million1, famed oilman T. Boone
Pickens still looks to turn his attention from “black gold” to “blue gold.” The billion-
aire tycoon recently supplemented his property holdings in Roberts County, Texas
with 200,000 acres of land atop the Ogallala Aquifer. Under Texas law, this pur-
chase entitles Mesa Water, Pickens’ new company, to take more than 320,000 acre-
feet of water, equivalent to more than 104 million gallons, from the property. Pick-
ens plans to pump the water from his land in the state’s north- eastern panhandle
and pipe it to Lubbock, El Paso, San Antonio or the Dallas-Fort Worth area.
If the venture succeeds, it
will supply more than 1.5
million Texans with water
from the aquifer.2 How-
ever, the Ogallala is already
severely depleted and could
be losing as much as 65
billion gallons of water per
year.3 The U.S. Geological
Survey reported in 2007
that the Ogallala Aquifer
has seen vast water-level
changes due to an imbal-
ance between discharge and
recharge.4 This loss of water
could be devastating to local
agriculture and the environ-
ment — affecting ground-
water availability, surface-
water flow and near-stream
habitats. In spite of these Oil billionaire T. Boone Pickens testifies before the Senate Homeland Security and Governmental
impending consequences, Affairs Committee in July 2008. Photo by UPI Photo/Patrick D. McDermott.
Pickens hopes that his $75
million property investment without years of legal and material preparation by Pick-
will turn into a profit of over $1 billion. 5 ens and his company. Pickens acquired the opportunity
to erect this nine-foot diameter pipe through a succession
Deals are in the works with J.P. Morgan to finance a of property investments, lobbying efforts and collabora-
328-mile pipeline project to supply the Dallas-Fort Worth tions with alternative energy supply efforts.
8

region with water.6 Other private companies have built

a combined total of 323 miles of water pipeline in Texas, Texas’ Rule of Capture doctrine played a key role in this
making this the largest such project to date.7 The enor- business venture. The historical law on pumping ground-
mous construction plan would not have been possible water states that groundwater belongs to the landowner.
Pickens’ mass land investment therefore entitles him
to pump water out of the Ogallala aquifer as long as the
water exists on his property.

Pickens used the enormous wind farm erected on his

property as a means to lobby for the right to pipe the
Ogallala water to a major metropolitan center. He suc-
cessfully passed a bill through the Texas Legislature to al-
low a water-supply district to transport alternative energy
and water in a single corridor. Pickens also successfully
loosened the legal definitions of a water district, allow-
ing him to invoke the right of eminent domain so that he
could build the pipeline through the property of several
neighboring landowners.

Notices sent out to local residents from Mesa Power and

Roberts County Fresh Water Supply District invited land-
owners to informational open houses on the plans for the
pipeline. Jay Rosser, a representative from Mesa Power,
reports that pipeline will not be entirely invasive: “In 95
percent of the cases, the property owner can continue
use of the land” once the power and pipeline has been
laid.9 Although this has caused an uproar among local
residents, many citizens have found it difficult to fight
Pickens’s corporate efforts. Any disputes on the matter
must be taken to court against Mesa Water, which is far
too costly and time-consuming for many residents.

Although the pipeline itself will cost between $1 billion

and $2 billion, Pickens hopes to make a very large profit
off of the distance that the water must travel.10 The project
will make more money the farther the water is pumped.
This means, for example, that El Paso would pay $1,400
per acre-foot and Dallas would pay $800.11 These fees will
create a large profit for Pickens. Further, Texas Water
Development Board predicts that over the next 50 years,
the state’s water demand could rise by 27 percent while
supply drops by 18 percent.12 Mesa Water is depending on
this decline in water supply to raise the price of pumping
water from the Ogallala Aquifer. That, unfortunately, sets
a bad precedent for water as the next high profit industry.
Watersheds are linked, and one state’s water supply
affects another’s. Excessive water extractions in Texas
could harm the wildlife habitat and drinking water sup-
plies of surrounding states. Rather than allowing corpo-
rate extraction and exploitation of our water resources,
the federal government should work with the states to
ensure that water remains affordable, pure and plentiful
for all.
Endnotes
1
Zuckerman, Gregory. “Pickens Funds Down About $1 Billion.” The
Wall Street Journal, Sept. 24, 2008.
2
Berfield, Susan. “There Will Be Water.” Business Week, Jun. 12, 2008.
3
“T. Boone Pickens in Texas.” Public Citizen website. 2008. www.citi-
zen.org/cmep/Water/us/bulksales/texas/
4
McGuire, V.L. “Water-Level Changes in the High Plains Aquifer,
Predevelopment to 2005 and 2003 to 2005.” US Geological Survey
Scientific Investigations Report 2006-5324, Mar. 22, 2007.
5
“Investors Have a Big Thirst for Water.” CBS News, Aug. 16, 2006.
6
“A Surprising Environmentalist.” T. Boone Pickens website. 2008.
www.boonepickens.com/helping/default.asp
7
Milstein, Michael. “Beyond Wind Plan, Pickens Eyes Pipelines in
Drought-Ridden U.S.” Popular Mechanics, Jul. 25, 2008.
8
Landers, Jim. “T. Boone Pickens to Import Water, Wind Power to
North Texas.” The Dallas Morning News, Apr. 18, 2008.
9
Walker, Lynn. “Pickens Send Landowners Letters.” Times Record
News, Apr 30, 2008.
10
Berfield, Susan. “There Will Be Water.” Business Week, Jun. 12, 2008.
11
“T. Boone Pickens in Texas.” Public Citizen website. 2008. www.
citizen.org/cmep/Water/us/bulksales/texas/
12
Milstein, Michael. “Beyond Wind Plan, Pickens Eyes Pipelines in
Drought-Ridden U.S.” Popular Mechanics, Jul. 25, 2008.
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