Watch on YouTubeThis book was published in 2008, at the top of an oil market that was about to collapse, by a man who had just turned eighty and was staking his reputation and a substantial amount of his own money on a specific prediction about America's energy future.
He was wrong about almost all of it. He died in 2019 having lost a great deal on the bet.
That makes this a considerably more interesting book than it was when it came out, and the honest way to review it now is to mark the forecast.
What the book actually covers
The life first, because the life is genuinely remarkable. Pickens founded Mesa Petroleum, built it into one of the largest independent oil companies in America, and in the 1980s became the most famous corporate raider of the era — the man who went after Gulf Oil, Phillips and Unocal, and who did more than anyone to popularise the argument that management should be accountable to shareholders.
He then lost Mesa. Pushed out at sixty-eight, in poor financial shape, with a serious drinking problem and a public reputation in decline. He started BP Capital more or less from scratch, and over the following decade made substantially more money than he had made in the first forty years.
That is the "comebacks" of the subtitle, and it is the strongest material in the book. He is unusually direct about the bottom of it.
The second half is the argument: the Pickens Plan. America was importing too much oil, that dependency was a strategic vulnerability, and the answer was to build out wind power across the central corridor to free up natural gas to displace imported oil in heavy transport. He committed to a wind farm in the Texas panhandle at enormous scale and spent tens of millions of his own money campaigning for the plan publicly.
Marking the forecast
Since he made specific, checkable claims, they can be checked.
America is dangerously dependent on imported oil and this will worsen. Wrong, and quickly. The shale revolution — horizontal drilling and hydraulic fracturing at scale — transformed American production within a few years of publication. The United States became a net energy exporter. The premise underlying the entire plan evaporated.
Wind will carry the load in the central corridor. Wrong in the form he proposed. He canceled the Texas panhandle wind project in 2009, partly on transmission constraints and partly because natural gas prices had collapsed and made wind uncompetitive. Wind did grow enormously in the following decade, but not through his mechanism and not because of his plan.
Natural gas should displace oil in heavy transport. Largely wrong on timing and mechanism. Gas did not take over trucking. Where displacement has happened in transport, it has been electric.
Peak oil is imminent. Wrong. He was a persistent believer and the argument did not survive shale.
Management should be accountable to shareholders. Right, and comprehensively so — but that was his 1980s argument, not this book's.
The pattern is worth naming. Pickens was wrong not because he misunderstood the industry but because he understood the existing industry extremely well and did not anticipate a technological change that reset its economics. That is the classic expert failure, and it is instructive precisely because he was not a fool.
Why you should read it
Read it as a case study in confident expertise being overtaken. If you assess forecasts professionally, this is a clean specimen: deep domain knowledge, substantial personal capital committed, a coherent argument, and a technology shift that made the whole premise obsolete inside five years.
Read it for the comeback chapters, which stand entirely independently of the energy argument. Being removed from your own company in your late sixties and rebuilding from there is a story worth having.
And read it for the corporate raider history, which is the part that has aged best. Pickens's shareholder-accountability argument is now simply how public markets are understood to work, and he was among the people who made that happen.
Key takeaways
- Domain expertise does not protect against technology shifts. He knew oil better than nearly anyone and the shale revolution still removed his premise.
- Committing capital to a forecast is not the same as being right. He put his own money behind the plan, which is admirable and did not help.
- The comeback is the real book. Rebuilding after being forced out at sixty-eight is the genuinely transferable material.
- Check what the author staked. He spent tens of millions campaigning for a plan he abandoned within eighteen months. That sequence tells you more than the argument does.
Meet the author
Thomas Boone Pickens Jr. was born in Holdenville, Oklahoma in 1928, trained as a geologist at Oklahoma State, and founded the company that became Mesa Petroleum in 1956. He built it into one of the largest independent oil and gas producers in the United States.
In the 1980s he became the defining corporate raider of the decade, pursuing Gulf Oil, Phillips Petroleum and Unocal, and appeared on the cover of Time. He lost control of Mesa in 1996 and founded BP Capital Management, through which he made his largest fortune.
He was a substantial philanthropist, giving away a reported billion dollars, much of it to Oklahoma State. He died on 11 September 2019, aged ninety-one.
The First Billion Is the Hardest was published in 2008. A revised edition with new material followed.
Get your copy
The First Billion Is the Hardest
Where the proceeds go
Some book links on this site earn a commission. Every penny of it goes to the American Cancer Society.
The American Cancer Society funds cancer research, runs free patient-support programs, provides lodging for patients traveling for treatment, and staffs a 24-hour helpline. You do not need to buy a book to help.
This review contains affiliate links. As an Amazon Associate I earn from qualifying purchases, and all commission is donated — details on my disclosure page.