Legendary oilman T. Boone Pickens has invested another $30 million in his Seal Beach-based Clean Energy Fuels Inc., a provider of natural gas for buses, taxis and other alternative-fuel vehicles.
The 77-year-old Pickens already owns just less than half of the privately held company, which sells compressed natural gas.
Pickens, who earned his spurs with Mesa Petroleum Corp. and became a corporate raider in the 1980s, has pumped millions into Clean Energy since he founded the business in the late 1980s.
Pickens initially invested $20 million to start the company.
“People didn’t want to make a change then,” Pickens said in an interview from his Del Mar home. “Everybody was somewhat against us. We are making a profit now.”
Clean Energy, which is projected to generate about $100 million in revenue this year, is poised to make its largest acquisition yet, having notched up a handful of buys in the past few years, according to Pickens.
He declined to discuss details of the deal, which he said is set to close in coming months.
Clean Energy also hopes to build a liquefied natural gas plant in Kern County’s Boron, Pickens said.
Annual sales could top $150 million in 2006 should Clean Energy’s latest wheeling and dealing go smoothly, he said.
For now, Pickens said he has no plans to take the company public.
“We don’t need the money. It isn’t on page one with us,” he said.
Other investors include Terasen Inc. and Westport Innovations Inc., both of British Columbia, and New York private equity firm Perseus LLC.
Natural gas is touted as a cleaner alternative to gas and diesel. For now, it’s somewhat cheaper than the $3 a gallon price for gas and diesel. The average price for a gallon of compressed natural gas is $2.49, up about 9% from the prior month.
But costs for natural gas are predicted to surge in coming months. Futures contracts on the New York Mercantile Exchange have hit records recently on concerns about damage done to Gulf Coast gas facilities.
Surging prices could put a crimp into the small market for natural gas for vehicles.
Pickens said he’s thinking long term. Higher prices could force natural gas out of power plants, he predicts, and into the market for vehicles.
Nuclear and clean coal power plants should replace natural gas generators, he said.
“Natural gas has become too valuable to burn in power plants,” Pickens said.
Pickens founded Clean Energy as a tiny part of Dallas-based Mesa Petroleum in the late 1980s and split it off in the late 1990s. Clean Energy bills itself as the largest provider of natural gas for vehicles in North America. The company serves fleets of trash trucks, buses, shuttles, taxis, police cars and trucks.
Pickens hand-picked Andrew J. Littlefair as Clean Energy’s chief executive. Littlefair, a former vice president of public affairs at Mesa Petroleum, worked as an advance planner and scheduler for President Ronald Reagan in 1987.
Some of Clean Energy’s earliest contracts were to sell compressed natural gas and a sister fuel, liquefied natural gas, through a tiny network of fueling stations.
Early users included the Orange County Transportation Authority and Super Shuttle vans at Los Angeles International and John Wayne airports. More fueling stations have been built from coast to coast, including a handful in Orange County, Pickens said.
In September, Clean Energy submitted a bid to build a natural gas fueling facility at the Santa Ana bus depot, Pickens said.
A final offer was due late last week, said Michael Litschi, an OCTA spokesman. The transit agency expects to pick a winner in November, he said.
This summer, OCTA ordered 50 of its first compressed natural gas buses worth $21.4 million. The first bus is set to be delivered in early 2007. It and others are expected to replace older diesel buses, Litschi said. OCTA runs 232 liquefied natural gas buses and 370 diesel buses.
Making deals has run thick in Pickens’ blood for decades.
His story is a business legend, turning a $2,500 investment into America’s largest independent oil company in three decades.
Pickens grew up in a small eastern Oklahoma town and taught himself the street smarts of Wall Street.
To save Mesa Petroleum from impending disaster in 1983, he made investments in mismanaged, depressed companies, including Gulf Oil, Phillips Petroleum Co. and Unocal Corp.
His strategy was to force management to do something for their stockholders. If they refused, he would try to take them over. His countless gambles paid off, adding a number of companies to his corral.
Besides Clean Energy, Pickens also is playing an active role in BP Capital Management LP, a Dallas-based firm that invests in energy futures contracts and other ventures.
Pickens has spoken about the theory of peak oil, which contends that oil production is at or near its peak with an era of decline to come.
