Gas Refineries Will Want Subsidies After Delta Deal: Pickens
Texas oil and gas investor T. Boone Pickens has a warning for Pennsylvania now that it is subsidizing Delta Air Lines's purchase of a gas refinery: Keep your wallet handy.
Delta Air Lines is getting a $30 million subsidy from the Keystone State as part of a $180 million deal to buy a Phillips 66 refinery south of Philadelphia.
"The state better get ready because other refineries are going to want subsidies for them, too," he told CNBC's Closing Bell. "How they gonna handle that one?"
For Delta, "buying a refinery is like me buying an airline. Someone's going to scratch their head on that," he joked.
Pickens, head of BP Capital Management, also defended fellow CEO Aubrey McClendon of Chesapeake Energy , saying the company's arrangement giving McClendon a share in each well was known for years.
Pickens saidhe remembers seeing information on the arrangement now under investigation by federal regulators at least five years ago in a proxy from the second-biggest U.S. gas company.
"That's been known forever," Pickens said during the Milken Institute Global Conference in Los Angeles. But, he added, "maybe Aubrey needs to be more transparent in what he's doing."
McClendon has "been pretty successful. He’s had some times when he got pretty close to the edge with financial problems, but always the financial problem has been the price of natural gas," said Pickens.
"Me, too," the longtime energy investor said. "I’ve made some mistakes on the natural gas price and all. I’m not ready to throw Aubrey out."
As for that low natural gas price, "we don’t have to have the government say, 'Use natural gas.' Natural gas is used because it’s so cheap," said Pickens, who has long backed federal legislation that would put more natural gas into U.S. commercial vehicles.
"We have the cheapest energy in the world today," he said, referring to natural gas, oil and gasoline, but "none of these politicians have the guts to say that," preferring to blast oil companies.
"Oil companies are doing a great job. They're employing a lot of people," said Pickens.