Evidently Boone is about as good at gambling in the market as Tom Kivisto, and it seems that there is no one out there who is willing to question his decisions.

Three years ago Pickens donated $165 million to Oklahoma State’s athletic department in an effort to buy OSU’s way back into contention in the Big 12 Conference. Brand new indoor practice facilities for every sport on campus, a revamped football stadium, press facilities, etc. It was all worth doing, and Pickens was going to foot the bill to do it.

Just to make sure everyone knew he was serious, he allowed the school to take out a $10 million life insurance policy, you know, just in case.

But what’s striking about all this is that Pickens didn’t just donate the money to the school.  He took the money and plunked it down in BP Capital Management, a hedge fund controlled by none other than Pickens himself.

It turns out, BP Capital Management isn’t immune to the current market forces, and has had nearly all of the $165 million in “donation” wiped out by margin calls.

So now the University is stuck with an ongoing project (that has now been put on hold) with no way to fund current development, much less see the project through to completion.  The football stadium expansion was funded with loans backed by what was a $300 million chunk of collateral in BP Capital.  That was when times were good and oil was expensive.

Oh how the times have changed.

The initial gift kept growing and growing as it sat in BP Capital, thanks to the increasing oil prices after the hurricane action in the gulf gave an instantaneous jolt to the oil markets.  But what goes up must come down.

As oil prices started to fall, BP found itself “on the wrong side of the market” so to speak.

So now the stadium project (named after Pickens, naturally) generates over $1 million in interest payments per month.

Hopefully this will serve as a lesson to major institutions that there is no substitute for cold hard cash.

May the common investor take note.

Energy, Finance, Sports donations, hedge funds, Oklahoma State, T. Boone Pickens

To be honest, I’m not really sure what to think of T. Boone Picken’s “plan”.  He’s been showing up fairly frequently on T.V. as of late pushing his plan for energy independence.

A noble cause, to be sure, and I don’t think he’s too far out of line here.  At least on the surface.  But look a little bit deeper.

Mr. Pickens is a business man at heart and he’s certainly done well for himself as an oil man.  Now he’s looking to capitalize on the alternative energy push.

Why does he want you to buy into his plan?  Because he’s got a ton of his own money dumped into wind energy.  And I’m talking billions of dollars going towards wind farm development in Texas.  Then there’s drilling for water in West Texas and shipping it to Dallas via pipeline, all funded by, you guessed it, Pickens himself.  So the real incentive for Pickens plan is to make money.  Naturally.

If he can get you on board, he certainly reaps the benefits.

As I mentioned, PickensPlan (on the surface) is a good step in the right direction, and we can all certainly benefit if we gain an independence from foreign oil.  However, all you have to do is follow the money to find the true incentive behind the message.

Of course, this should all sound eerily familiar.  Remember Sir Al Gore, Nobel Prize winner?

I believe his message went something like this:  Man has caused global warming, global warming is melting the ice caps, will flood the shorelines and cause drought and famine all across the world…

And oh by the way, be sure to see my movie on this topic, buy carbon credits from my company, and try and look past the fact that I consume more energy in one month than you do in seventeen…

Alternative Energy, Energy Alternative Energy, Pickens Plan, T. Boone Pickens

On Friday, legendary oilman T. Boone Pickens predicted that oil will hit $100 a barrel, possibly in the fourth quarter, but definitely by sometime next year.

The reasoning behind is prediction is that he believes worldwide demand has outpaced global output of 85 million barrels a day. Consequently, Boone, as a believer in supply and demand (as am I) says oil prices have nowhere to go but up.

“I think you’ll reach $100 (a barrel) before you go back to $80,” Pickens said before speaking at a gathering of the Association for the Study of Peak Oil and Gas at a downtown hotel. “It could happen in the fourth quarter, but you’ll see it within a year.” -Source

The jury is still out though on whether daily oil output has reached its maximum level. The federal GAO reported in March that most studies have found oil production will reach a peak between now and the year 2040.

In regards to alternative energy, Pickens is big on wind, although he said that any alternative fuel has a chance to offset petroleum.

You can’t discount Boone Pickens, his history in the oil and gas sector speaks volumes.

I think he’s right, oil will probably see $100 before it comes back to $80, however I believe the 100 dollar mark will be a psychological event that could stimulate a bust in the oil industry.

Alternative Energy, Energy, Oil & Gas Alternative Energy, oil and gas, petroleum, T. Boone Pickens, wind energy