jungle

About half of the investors in T. Boone Pickens's energy-oriented equity hedge fund have asked to withdraw their money on the heels of losses of about 60% this year, according to people close to the matter. Mr. Pickens and his investment firm have lost $2 billion since peaking in late June, Mr. Pickens said Sunday on the CBS program "60 Minutes."

His fund, BP Capital, will have about between $400 million and $500 million after expected withdrawals. It started the year with about $2 billion. A few weeks ago, Mr. Pickens moved the fund almost entirely into cash to help ride out the volatility in the energy patch, according to people close to the matter.

Mr. Pickens is expected to personally hold about 20% of the fund after the withdrawals, or about $100 million, after he does some selling along with his investors. He has lost an estimated $400 million or so in his funds this year. . . .

Two weeks ago, Mr. Pickens wrote to his investors, saying he would allow them to make early withdrawals, and they could do so immediately. He was able to offer them that option because Mr. Pickens had moved the fund into cash. The deadline for presenting the hedge fund with a withdrawal notice was Monday. As of late in the day, it was unclear how many investors would remain, though an associate of Mr. Pickens estimated the figure was around 50%. Mr. Pickens's smaller commodity fund, which started the year at almost $600 million, lost 84% through August.

Mr. Pickens has told associates he is gearing up for his latest comeback. "I'll get it back," he told "60 Minutes."



Anyone remember the Ads he was running earlier this year?

MD10PLT

His ads directed you to a web site were he advocated switching cars to natural gas. Not a bad idea but switching to electric is also a good idea. We'll see where the free market takes us. My bet is on electric cars.

HoursHore

I would say electric as well, being that every house in america with a garage is already equipped to handle plug in hybrids. Too much infrastructure lacking for the CNG conversion.

T Boone pitches that plan cause he can make a mint off it. Which isn't a bad thing.

Slice

I've seen a few interviews with the man as well as a C-Span banquette. A very intelligent man for sure. He claims to not be in it for the money. For the most part, I believe him. He has enough of it at his age(80 something) to live another 20 and still live the high life with plenty leftover. I hope oil dropping doesn't lull us back into energy complacency, but it probably will for most.

rotorhead1026

Unfortunately there is also little infrastructure for recycling / overhauling / scrapping high-capacity batteries, which are a nightmare package of pollutants. You pay on the front end with gas and on the back end with batteries (which are also needed for fuel cells). There's no easy solution. These problems ARE solvable, but we need to get to work NOW - on the order of a Manhattan project. In the meantime ... drill like a *************h.

jungle

I like this approach:

Trade aside, no issue is of greater consequence to FedEx than energy policy. FedEx consumes 1.3 billion gallons of jet fuel a year, and is the largest user of energy in the world next to the U.S. military. Mr. Smith sits on the board of the Energy Security Leadership Council, which issued a report a few months ago advocating a huge expansion of domestic energy supply. How do we do this?
"Two things," he insists. "The first is we should maximize oil production in the United States in every respect.

Everything, offshore, Alaska, shale, nonconventional, coal to liquid, gas to liquid, and nuclear. Let the market work.
"Second, and this is where I am an apostate on the free market, and also where I disagree in the main with, with Boone Pickens," Mr. Smith adds. "The United States has only one real way to reduce our dependence on foreign petroleum, in terms of reducing demand while we're increasing our domestic supply, and that is to electrify the short haul transportation system, to go to battery powered cars. The technology that brought us laptops and cell phones has reached a point where these lithium ion batteries can now produce cars like the Chevy Volt and the new plug-in Toyota Prius." Many FedEx trucks are already using this technology, though he admits they aren't yet cost efficient but are 42% more fuel efficient.


Fred Smith


Mr. Pickens seems to have jumped in at a bad time, it is hard to believe his motives were entirely altruistic when he is running a hedge fund, a commodity fund and ads on TV. Even the best make some very large errors.

SpyGlass

I've loosely followed Mr. Pickens in the media and other formats for quite some time. While I am not as enthusiatic as he is for his overall plan to succeed for numerous reasons, I do support his effort and commend him for the risk he undertaken to be "The Point Man" for the push to achieve a new direction in US energy needs. What impressed me most was his recent "60 Minutes" piece. While most are aware of his plan "using wind and other means to help eliminate US dependance on foreign oil", he also honestly stated his motivations which in part, is to make some money off it. He is a businessman and came clean with that, he did not hide behind an illusion that he is some sort of hero out to save America all on his own. While his plan seems to be losing steam, the fact that he is sinking (and losing) tons of his own money into this new energy gamble, gives him to me, a great deal of down-to-earth honest legitimacy. Kinda reminded of Howard Hughes's response before Congress concerning military expenditures concerning the Spruce Goose after WWII. When accused of defrauding the public, he simply explained how much of HIS wealth was rolled up in it. While Mr. Pickens situation is very similair but arguably also different, it's still hard to argue eithers or anyones motives when the risks they assume far outweigh the tradition of conventional thinking...

Pilotpip

For the CNG infastructure issue, it's much more in place than you might think.

I had the pleasure of sitting next to the CEO of Laclede Gas when I was catching a ride back to STL from ORD one day. While stuck on a ground stop at 5pm, we struck up a conversation. This was when oil was around $125/bbl.

I asked him why they weren't persuing this more. In the St. Louis area, 75% of the homes are heated with natural gas, a large number of fleet operators use them (many in the public bus system, city and county public works, etc), the technology itself has been in use for about 15 years and most auto makers already produce CNG cars in small numbers.

His reply, "we've discussed it. However it's hard to lobby when you're going up against the oil companies. Also, people seem more willing to have to buy a charger for a car than a CNG outlet for their garage."

I didn't know that much about T. Boone Pickens, but something didn't sit well with me. Now that I know about his hedge fund it makes a little more sense.

250 or point 65

Like Pip said, nearly every house with a garage in the midwest at least is a compressor away from being its own natural gas station. If the US is truly going to use multiple means (electric, wind, hydrogen, natural gas) to get over its dependence, there is a big market for people willing to run a car on natural gas!

MD10PLT

I've done quite a bit of research on the CNG solution and came to the conclusion it's not as likely as electric. Here's why, it's true you can put a CNG compressor in your house but they cost about $6,000, plus or minus based on size; and they only last about 1,000 hours until they need major repairs. So you had better have a CNG station nearby. Although I hear CNG stations are popping up all over Utah, why there I don't know.

The second big problem is the size of the fuel tank. They are significantly larger than a normal gas tank. Not a huge problem but it does cut down on either space or range.

I still like plug in electric because the infrastructure is already here today with no added cost to the consumer. Other than the added cost of the cars production.

BTW Popular Mechanics said the next big gold rush will be Lithium mining. Apparently there's lots of it out there, but no one is currently ramped up for the potential need.