Boone Pickens Homepage           Electronic Publishing Center
	REMARKS TO THE TEXAS ASSOCIATION OF REGIONAL COUNCILS AMARILLO TX AUGUST 25, 1988

25 MINUTES

Welcome to Amarillo, the city with the fourth-lowest unemployment rate in Texas and the strongest winds in the United States.

I can tell you how to reduce the unemployment — move the unemployed out of town just like the Swiss do.

Texas is still having a tough time.
—Tom Brown story; “Damn tired of it.”

There are several good reasons why the outlook is brighter today than it's been in years. . .but my optimism is for a diversified Texas economy, not another oil boom.

The oil industry is slowly improving.

The world is awash in cheap oil. OPEC countries can’t just shut down production to raise prices like they did before because they have economies to maintain. . .The Shah of Iran’s overthrow was the blueprint for what can happen.

There is plenty of cheap foreign oil, and what little domestic oil is left is not economical to find.

So the domestic industry’s future is not oil. . .it’s natural gas.

Natural gas is plentiful in the United States. . .maybe too plentiful. We’ve had a deliverability overhang for the past six or seven years that has kept gas prices depressed.

But the oversupply, the “gas bubble,” is disappearing because gas exploration is not economical at today’s prices.

But why rush to develop your last remaining reserves. Where will we be 10 years from now?

We expect gas supply and demand to balance during 1990. There’s a good possibility of localized shortages this winter, which we believe will push gas prices up.

The only thing that may restrict gas price increases would be the cost of alternate fuels such as oil and coal. . .It’ll be smooth sledding to $2.50, then competition from other fuels will slow the increase unless they move up.

But because gas is a much cleaner fuel than oil or coal, we expect gas to sell at a premium on an energy equivalent basis by the mid-1990s.

All of this is good news to those of us in the natural gas business. . .but it won’t be enough to revive the entire state.

Fortunately, Texas won’t have to count on the return of the oil industry. While the collapse was rough on us all, I believe it will actually improve the underlying health of the state.

A couple things happened when times got tough. First, businesses restructured, became lean, mean and efficient to stay alive. As a result, they’re a lot more competitive today.

This was true in Texas but also nationwide.

We had a hand in starting the movement and we’ve helped America by doing so.

Restructuring is responsible in large part for the country’s record economic expansion.

The second thing that happened as oil profits were drying up is that our economy began diversifying. . .Some people in Texas who used to depend on the oil industry turned to entrepreneurship in other areas.

These entrepreneurs opened their own businesses and succeeded in expanding the state’s economic base.

Texas’ biggest asset is not oil & gas — it’s our entrepreneurs.

Hard to quantify — but we have more in Texas than anyplace in the world.

In addition, Texas has actively attracted businesses from other states.

So what it comes down to is a three-pronged offensive for economic growth.

First, we need to continue restructuring existing businesses to become as competitive and efficient as possible.

I need to regress at this point. . .Restructuring is most often brought on through shareholder pressure on management. . .But an anti-takeover bill is being proposed in the Texas legislature that would protect managements from their shareholders.

We must stop that bill and, in the tradition of Texas leadership, push for the passage of what would be the first shareholders rights law in the country.

Such a law would return corporate democracy and would be an economic boost that would put Texas in the lead of corporate growth. I encourage you all to stay attuned to the situation.

With pro-shareholder statutes we will raid Delaware (explain).

The United Shareholders Association is a 20,000-member group I formed in 1986 to fight for shareholders rights. . .We will be involved in developing a shareholder rights bill in Texas.

Now, the second thing we need to encourage in Texas is entrepreneurship. Our young people are full of ideas and energy.

We need to give them the opportunity to succeed. . .especially the chance for a good education.

Wall Street Journal on Tuesday. . .almost half of the college students surveyed said they thought starting their own business was a good way to succeed. When older people were asked the same question, only about 20% said it was a good idea.

Young people hate the bureaucracy — let’s keep them with that attitude.

So entrepreneurship is alive and well with our young people.

Entrepreneurs are the ones who will work 18 hours a day to make money, create jobs and put cash in the public coffers through taxes.

(Story on “how much is enough” and why you never want to discourage an entrepreneur.)

Third, we should continue attracting established businesses from out of state.

Do a little raiding when we can.

Amarillo never understood what that would do for them.

With our low property costs, lack of state income tax and availability of a highly skilled workforce, we have plenty to offer businesses without subsidizing them with taxpayers’ money.

And again, a pro-shareholder statute would put Texas at the forefront of corporate law.

If we pursued these three avenues, I firmly believe we could be the economic model for the entire country.

But it takes effort. . .it takes involvement. . .and it takes a dedicated commitment to a unified set of goals. . .something you in this room are very aware of.

Texans have demonstrated these attributes in the past, and I know they can be counted on in the future. . .to build a stronger Texas.

Thank you.

QUESTIONS AND ANSWERS